Four Tips to Reduce Your Financial Stress During the Holidays

In a year that never felt like it would end, we are rapidly approaching the most wonderful time of the year. However, with the COVID-19 pandemic still raging across much of the United States, many have found themselves out of work due to no fault of their own even as we approach the season of giving. And while the holidays are always a magical time of year for people, they can put a lot of pressure on people's finances.

While it can be easy to lose sight of what's really important and run up the balance on your credit cards while finding the perfect gifts for your loved ones, it's important to remember that the price of a gift isn't always the most important thing. With that in mind, here are four tips that can help you have a great holiday season.

Make a budget for the holidays

The earlier you begin saving, the easier it will be. Christmas is a few weeks away, but there's still plenty of time to set up a new budget that can help you save up for all those unexpected costs. There are several apps on the market that can help you save money with every purchase you make and many banks offer a similar kind of program. Make a list of everything you plan on buying for the holidays - including food, gifts, decorations and even money for traveling to grandmother's house, and begin putting money away specifically for those expenses. Writing everything down will help give you a better idea of how much you want to spend this year and can even help you avoid spending money on 'impulse purchases' while you're out shopping.

Don't let people's expectations set your budget

People appreciate it when you tell them the truth. The worst thing you can do is allow your giftees to believe they're getting a big present when all you can afford is one or two smaller presents. If the new PlayStation 5 isn't in the budget for your kids' or significant other's Christmas, don't set them up for disappointment. Communicate with them clearly about what your financial situation is and why sometimes the latest iPhone isn't all its cracked up to be.

Make a list and check it twice!

Your loved ones are going to be high on the list for people you want to give gifts. But sometimes, kindness and the sense of obligations might prompt you to purchase something for someone you don't really need to. With so many friends and relatives, gift-giving can become overwhelming even as you want to show them how much you appreciate them. One way to keep your spending from getting out of control is to take a page out of good ol' St. Nick's playbook. Make a list of all the people in your life and assign a dollar amount to each person. Sure it's a bit impersonal, but when you're making a budget, you have to make choices. Setting boundaries with those you love is important and they'll appreciate the honestly.

Homemade gifts are a great way to show someone you care

One thing that goes a long way with many people is when you make them homemade goodies like fudge, muffins, or candies. But if you aren't a great cook, another great gift is to spend quality time with those you love in your life. Despite COVID-19 reducing the number of holiday activities, there are still lots of fun things happening out there you can do with them. Homemade gifts that have thought and care put into them can also become far more beloved than any fancy new electronic device you might have otherwise given them.

Most importantly, it's good to remember what the holidays are really about. After dealing with so many challenges in 2020, we all deserve quality time with those we love. Ten years from now, that new iPhone/PlayStation 5 will be obsolete and probably forgotten - but the memories of the 2020 holiday season will remain.

Photo: Getty Images

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