How to Have a (Money) Stress-Free Holiday Season

October 29, 2018

4 Steps to Having a Stress-Free Holiday Season

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The holidays are an amazing time of year. Lots of food, lots of getting together with friends and family, and lots of food. (Did I say food twice?) What more could you ask for? How about a stress-free holiday season?

It’s a little ironic that the very season that is meant to bring us joy is often accompanied by stress, worry, and anxiety, isn’t it?

That doesn’t have to be the case, though. We know the holidays are coming; they happen at the same time every year. By budgeting and planning ahead, we can have a stress-free holiday season and focus on what this time of year is all about.

Minimize the money stress this year with these steps.

1. Commit to staying within your means

This seems like an obvious statement, but it actually isn’t. Unless you make the firm decision to stay within your means, you could very easily overspend only to regret it later — like in January when those credit card bills start rolling in.

This commitment means you’re not going to spend more money than you have to spend — under any circumstance.

Deciding to stay within your means will require some brutal honesty on your part. We can easily convince ourselves that we can afford something when, in fact, we can’t.

How do you know if you’re spending outside of your means? Here are a few signs:

  • If you have to use your credit card for purchases.
  • If you’re counting on a year-end bonus that you haven’t received yet to help finance the holidays.
  • If you have a general uneasiness about your spending decisions.

Once you’ve made the determination to keep the holidays within your means, all spending decisions should be made with that in mind. This is essential to having a stress-free holiday season.

2. Spend with a plan

Have you in years past spent, spent, spent, only to be shocked by the total amount you dished out after adding everything up? (And that’s only if you were daring enough to add it up. Most of us know we spent a lot but we rather not know just how much.)

If that’s you, don’t spend blindly this year. Holiday expenses can be handled similarly to the way you would manage a regular monthly budget.

Start by deciding the total amount you have available to spend. Ask yourself, is this a $300 Christmas? An $800 Christmas? The National Retail Federation says this year, the average consumer estimates their holiday spending to be just over $1,000.

Once you have your total number, identify the categories you plan to spend on and decide on an amount for each until you have “spent” the total amount down to zero.

Holiday budgeting categories

Here are some categories to plan your spending.

  • Gifts. Make a list of everyone you intend to shop for and assign a dollar amount to each person. Be sure to remember gifts you typically give to neighbors, teachers, and co-workers; any tipping you usually do, and any charitable giving and donations you plan to make.
  • Decorations. Whether you cut down your own tree every year or pull it from the attic, include the cost of tree-trimming and other decorating expenses.
  • Food. This includes meals you’ll be hosting, dishes you will make as a guest, meals out, and any baking or cooking you plan to do as gifts.
  • Entertainment. Build in the cost of holiday shows, plays, and other activities you like to do during the season.
  • Travel + Transportation. Estimate all transportation costs you expect to incur even if you’re just driving a few hours to grandma’s.
  • Clothing. Go ahead, put that ugly Christmas sweater you plan to buy in the budget.
  • Miscellaneous. If you want your budget to work, then set aside an amount for miscellaneous expenses that may pop up. Having this category built into your budget will reduce any money stress that comes with an additional party to go to, a few extra guests at dinner, or a couple of expenses that weren’t on your radar.

Related Reading: Do You Have These Holiday Expenses in Your Budget? 

3. Leverage the time you have

I admire people who have Christmas accounts and save up year-round. That is an excellent approach, and if you already do that, good job! For the rest of us, though, not starting in January doesn’t mean that you cram all your spending into December.

Take the time you have and divide your holiday budget equally by that time. You’ll appreciate saving a fourth of your holiday budget over four months or half of your budget over two months rather than leaving it all to one. This is key if you’re determined to keep the holiday season within your means.

4. Dedicate a separate account for your holiday saving

Consider setting up a separate savings account just for Christmas. An excellent way to do that is with an online bank that allows you to set up several different accounts and attach a savings goal to each one. Usually, you connect that account to your checking account for easy transfers.

Each month, set aside that month’s holiday budget into the savings account. Having it separate will help you stay on track with your spending goal and will prevent you from spending your holiday money on other things.

(Get a $25 bonus with this referral link when you open a Capital One 360 savings account.)

A stress-free holiday season means a stress-free new year

Following these steps will help you have a stress-free holiday season. And don’t worry that taking these steps will zap the fun from the holidays. On the contrary, it will help you focus on the enjoyable parts of the season without the money stress that often accompanies this time of year.

Let January and February be about undoing the damage you did by overeating, not about undoing the financial damage you did by overspending!

Related Reading:

What steps do you take to have a stress-free holiday season?

How to Have a (Money) Stress-Free Holiday Season


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