This holiday season, money is tighter for many Americans than it has been in the past. After a year of rising prices, everyone is feeling a little more stressed about our bank accounts.
With inflation at its highest point in four decades, everything really does cost a little more these days. You’re spending more at the grocery store, putting more money in your gas tank, and forking over extra cash for everyday necessities like electricity, water, and housing.
As you’re wrapping up your holiday shopping and preparing for the gift exchange season, you’re probably feeling a little extra anxiety this year.
It might even feel tempting to skip gift giving traditions. But nobody wants to bah humbug their way through the holidays. So, here are a few practical tips to help stretch your dollars so that you can still be merry and enjoy the 2022 holiday season.
1. Make a Plan
While some plan every detail, carefully budgeting funds and making price comparison lists–others just head out to the store and throw things in their cart that give them a certain ‘feeling.’
We’re not saying that you’re wrong to be a bit spontaneous. But if money is tight, every dollar counts, and you’ll be far more likely to cover your Christmas budget if you at least set a dollar limit ahead of time.
2. Bills First, Please
Once you have a plan–more specifically, a budget, you have an idea on how to plan for the rest of this month. If you need to make sacrifices, there are some do’s and don’ts to keep in mind.
First of all–don’t skip a bill to buy a gift. It’s incredibly difficult to catch back up, plus you might be adding late fees, compounded interest, and additional stress to your holidays.
Second, don’t risk your credit score. One late payment can hurt your score. Similarly, racking up new credit card debt without a way to pay it off can cause your score to plummet further. Think beyond the holidays – even if it means being a bit less generous than years past!
3. Remember that the Best Gifts Can be Frugal Traditions
During tougher economic times like these, it can be worth rethinking the commercialization of Christmas gift-giving traditions. Consider the so-called retail holiday–Black Friday. This spectacle of an event designed to inspire shoppers to spend big has been the ultimate kick-off to a commercialized Christmas since the 1950s.
It’s been about 70 years in the making, but honestly, before big department stores like Macy’s and JCPenney began luring shoppers with festive Black Friday deals, gifts were more often handmade and heartfelt. Consider if it’s time to get back to those more frugal roots. In fact, sometimes a thoughtful frugal gift will be better received than a costly but commercial one.
Don’t be afraid to have an honest, open conversation with those closest to you. Frame the conversation around choosing new traditions to begin together rather than talking about how little money there is to spend.
Here are some ideas for new traditions to get you started:
- Holiday Movie Night
- Swap Matching Family PJs for Matching Socks
- Enjoy Free Christmas Light Tours
- Host a Cookie Decorating Party
- Gift Homemade Baked Goods
- Prepare a Special Breakfast for the Holiday Mornings
- DIY Your Advent Calendar
- Volunteer Together as a Family
- Pick Up a New Craft
- Take Pictures & Gift Them in Handmade Frames
4. Avoid Credit to Stick to Your Budget
With all the emphasis on budgeting during the holidays, that plan is just that–a plan. Your reality can be drastically different, especially if you feel pressured to meet gift-giving etiquette expectations. Running up the balance on your credit cards is just another way of overpaying for Christmas gifts. Skip the high-interest debt and subsequent negative impact on your credit score by sticking to the money you have on hand for Christmas shopping. If your employer offers benefits like Earned Wage Access, you may consider getting early access to pay to help ensure you are not dipping into credit.
5. Set & Enforce Healthy Gift-Giving Boundaries
Buying gifts for your immediate family is a given. But beyond that, how many people should you really spend on during the holidays? If it’s more than a handful outside of your immediate family, you probably have room to cut back.
Reconsider whether you need to buy gifts for your close friends (or their kids). If you have a good relationship, chances are that you both do plenty for each other throughout the year. There’s likely no need to make that friendship a source of financial stress.
Similarly, reassess whether you need to participate in elaborate gifting schemes with extended family. It’s okay to opt out or suggest a frugal alternative like a White Elephant gift exchange.
6. Focus on Perceived Value, Not Dollar Value
Similar boundaries are a good practice for giving gifts within your immediate family. How much are you currently spending per person? Is that number realistic given your annual earning ability?
It’s healthy to be realistic about what you can reasonably afford–not just now, but as part of your bigger picture approach to the holidays.
The national average in US households for Christmas spending per kid is $200-$300. That’s a big number–and can quickly get out of control. Try using an intentional gifting structure like:
- One gift you need
- One gift you want
- One gift you read
- One gift you wear
- One gift to experience
Final Tips for a Financially Successful 2022 Holiday Season
The holidays are meant to be a time of glee and relaxation. Especially during tough economic times, however, it can feel a bit more stressful than relaxing. And over the better part of the last century, we’ve learned to celebrate by participating in elaborate gift-giving traditions that come with big price tags.
But cheerful holidays and gifting don’t have to come at a steep price. Instead of overstretching your budget, consider finding new ways to approach the holidays. That might mean a new budget, new traditions, or an all-together new approach to celebrating Christmas.
To help you spread out the financial impact of gift giving traditions, Juice Financial offers flexible, convenient ways to get paid. We make it easy for your employer to offer your payroll, on-demand access to pay, and flexible perks on reloadable debit cards, backed by an easy-to-use app. Share the good news with your employer–and start getting paid the way you want.
