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How To Stop Overspending this Holiday Season

Carrie Casden  |  November 2, 2021

Want to ensure your loved ones have the best ever holiday season? Here’s how to celebrate in a way that doesn’t put your budget at risk.

If you’re like me, 2021 is just starting to feel normal again as November arrives. And while our masks are still on, we’re more apt to get out and about while finding some semblance of our pre-Covid normalcy. The airports are crowded, people are planning vacations, and it is once again difficult to get a dinner reservation (particularly in LA where I live!). 

With the holidays upon us, we may have a heightened desire to treat ourselves after such an extended period of restriction. However, this inclination to seek out indulgences can trigger financial overspending, ultimately resulting in unnecessary financial stress. I like to call this the “holiday slide” – it starts with overindulgence around the turkey and ends with the gift-laden Christmas tree, or 8 nights of over-the-top Hanukkah gifts, or expensive New Year’s parties. The list goes on. And with the holiday season always comes a variety of emotions, and many tend to overspend to compensate for feelings of loneliness, loss, or inadequacy. We’ve all been there and felt these things. The trick is controlling them, and getting to a better place with our money this holiday season. 

In order to help my clients start the new year feeling financially empowered, I ask them to give some extra thought to their holiday budgets, and truly plan their shopping in a thoughtful way. I wanted to share a few tips my team and I have found helpful for staying on track with financial goals. My hope is that they help you find holiday joy this year. 

Make a list of your family values

Are these values reflected in your gift-giving habits? Keep these principles in mind when purchasing presents so that you only buy items that are meaningful and in alignment with your values. 

Make a list of everyone you plan to buy presents for

Spend a few minutes asking yourself why you are buying a gift for that person, and why it’s important to do so. Then, establish a budget for each person and keep these numbers on hand whenever you’re shopping. 

Think of creative ways you can “gift” family members

By performing tasks you’re good at, such as cooking a meal or organizing their closet. Your time and skills are valuable and appreciated just as much as a material item. 

Put together a holiday budget

For items like decorations, meals, travel, holiday cards, and postage (or instead of expensive holiday cards, send e-cards or post them on social media)! When you add together your budget for gifts and general holiday expenses make sure this amount doesn’t exceed 1.5% of your annual income. If you’re hosting or cooking big holiday meals, plan your menu and food items ahead of time so you can look for specials or sales on some of those items (or buy in bulk at places like Costco). 

Use the internet to help you find the best prices

On the items you plan to buy. Now, more than ever it is easier to price shop; besides, it’s both safer and easier to shop online, so why not use this to our advantage and save some money.

Look at how you plan to pay

If you plan on charging everything to a credit card that you won’t be able to pay off in full, this is a red flag that you need to spend less. If this is your only option, then at least try to find a credit card with no interest or very low interest for a period and then make a plan to have it fully paid off by the end of the introductory period. This way, your $50 gift doesn’t end up costing you $80.00 with monthly interest.

Keep a gratitude journal 

This is just helpful any time of the year but for some, it is even more useful during this time when you might be feeling overwhelmed and comparing yourself more to others.

It goes without saying that 2020 and 2021 have been difficult for so many of us – we’re tired of the uncertainty and I know there’s a common feeling of, ‘what the heck, I’m just going to live my life and spend what I want to this year.’ But there’s a lot of risk in overcompensating to make up for the lost experiences of Covid. 

After our period of “holiday zeal” come the January bills, which often leave people in debt with a resounding feeling of shame and regret, vowing not to repeat the same mistake next year. And yet so many people repeat this cycle over and over again. But this year, I wanted to remind us all to remember how little we needed to survive during Covid. In many ways, it was a time for people to reevaluate their priorities and become more mindful and attuned to our wants versus our needs.

I hope you’ll use these pointers to stay in control and focused. Mindful breathing, meditation, and a holiday budget can really help you stay focused on what matters. And at the end of the day, it’s important to remember that the most important person to care for during the holidays is yourself. If money is tight this year, your loved ones will understand – and you’re far better off finding something less expensive (or free!) that still lets them know how special they are to you.


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