While the holiday season is an opportunity to focus on the things that matter most in life, exchanging gifts is a long-standing tradition and a way to share joy with loved ones. Gift-giving is likely to be even more amped up this year, which might bring upon financial strain.
Research shows that many shoppers intend to spend more money on the 2021 holidays due to COVID-19's impact on 2020 celebrations.
In fact, 48% of surveyed consumers said they plan to spend more money during the 2021 holiday season due to the pandemic dampening last year's plans. In addition, due to the shortages on goods caused by the pandemic, we may be tempted to spend more money in order to get gifts that are in short supply.
Regardless of the pandemic, seven in 10 respondents said they typically go over budget during the holidays.
Follow these tips from our friends at GreenPath Financial to avoid going over budget:
1. Simplify the Season
For less financial stress, consider simplifying celebrations and entertaining. Rethink the complicated decorating, holiday cards and other traditions. Instead of costly parties, consider arranging a family hike, visiting a museum, or even volunteering with friends and family as a way to honor the season. After the event, gather for hot chocolate or a budget-friendly potluck. Spending time with people you love is a true gift. Think creatively of how to give memories to each other. They cost nothing!
2. Set Expectations
Year after year, studies show that families with children are more likely to take on debt and go all in on gift spending across the board. With some planning, families can successfully navigate holiday spending expectations by paring down on the "stuff." Get everyone in the spirit by setting a gift limit so expectations are clear. The kids might be better off in the long run! A recent survey shows that small children thrive in environments with fewer toys. Play areas with a only a few favorite toys lead to higher quality of play.
3. Volunteer in Someone's Name
Is there a friend or loved one on your gift list who has trouble getting out and about, yet has a favorite charity that is meaningful to them? Volunteer in their name to honor them and provide a gift to both the organization and the individual. Whether raking leaves at a community center, walking puppies at the Humane Society, delivering Meals on Wheels, or another service, volunteering in someone's name is a win-win!
4. Create a Holiday Spending Plan
Finally, putting together a holiday spending plan helps relieve uncertainty and financial stress. A simple budget can help you figure out how to meet both your short and long-term financial goals - especially during the holidays. The plan can help you get an idea of what you have to work with in terms of income, what your commitments are, and what you have remaining to devote to your goals. Remember, nothing is set in stone, especially during a busy holiday season. You're in charge of your plan and your goals. Review your holiday spending plan and adjust to trim expenses or direct money toward something different.
Through our partnership with the national non-profit GreenPath Financial Wellness, financial wellness experts are ready to start a conversation about your specific situation and explore options to help you manage holiday finances this upcoming season.
Source: GreenPath Financial
Open an Account