The holiday season, including Christmas, New Year’s, Hanukkah, and Kwanzaa, is typically a time of gift-giving, dinners, parties, and celebration, but all of this can bring added financial stress, particularly during the continuing cost-of-living crisis. Recent research reported has found that the inflation fueled cost of living crisis has even changed the way we plan to celebrate this year, including parties at home and alternatives to the traditional Christmas dinner.
This time of year can have benefits for our mental health, but it’s important that we approach the season in the right frame of mind and consider our finances. If we approach the holiday season with the right plan, it’s a great way to set us up for the new year and beyond. For the upcoming holiday season and beyond, we’ve compiled a list of tips and advice for saving money.
Second hand presents
It might seem odd to give somebody a second-hand gift, but charity shops often include new and unused items and used items in good condition. Vintage items can make for great gifts. Buying from charity shops means your money will go to a worthy cause. You might have to put a bit of extra time and effort into finding a second-hand gift, but focusing on a task can be really good for our wellbeing, so you might even find this helps your mental health.
Gift or care vouchers
Handmade gift vouchers are a fun alternative to expensive gifts, allowing you to do something nice for somebody without spending money. For example, you can create a voucher for a homecooked meal, a walk in the park, chores. Anything you can imagine. These can be as simple or as complex as you like. Written simply on a piece of cheap card, or hand-designed and artistic. Giving to others is one of the ways to wellbeing so a gift like this might also improve your mental health.
Consider not giving presents
We often feel bad for not giving somebody a present during the holiday season, but with large families and circles of friends, it can be difficult to be able to afford to buy everybody a present. Consider having a conversation with loved ones about the cost-of-living crisis and propose that you mutually skip presents this year. A mutual agreement ensures nobody will feel bad for overspending or underspending, and it allows you to propose an alternative like spending quality time together.
Agree to spending limits
If skipping presents isn’t possible, you can agree to mutual spending limits that are within your shared means. This way, you can feel safe in the knowledge that you’re not overspending or underspending compared to your loved one. Having a limit can also help direct what you purchase. You might feel anxious or worried about having a conversation about money, but you can prepare yourself ahead of time.
Homemade presents
If you’re crafty or you love to bake, homemade or home-baked presents are a great way to save money while also giving a truly special present. Whether you love to knit, crochet, paint, or bake, use your creative skills to the fullest and give something you can’t buy on the high street. You might also consider sharing these skills with loved ones, perhaps combined with the homemade gift vouchers above to provide lessons for a loved one in your chosen skill. You might even want to try to learn a new craft to make a gift and learn a new skill to boot.
Work out a budget
We often want to go above and beyond at this time of year, giving our loved ones a truly magical time even when it might not be within our means. It might help to work out a budget using a budget planner and read about ways to manage your money and mental health. Once you’ve calculated your budget, you can prioritise who to buy presents for and who you might be able to skip.
Save money on Christmas dinner
If you’re planning a family meal, look for ways to save money. The highest food waste happens at Christmas with people saying they spend more money on food than they should during this time of year. Not only is this an environmental concern, its possible to save money purely by buying only what we need. Consider how many guests you expect to have, consider their dietary requirements, and only buy what is truly necessary. This might feel like a big task that could make you feel worried or anxious. If you feel overwhelmed, try breaking it down into smaller tasks and take each small task on one at a time. There are other ways to save money. You can also keep an eye out for deals or consider chicken as an alternative to expensive turkey.
Sell unwanted items
Not only can selling unwanted items help to fund the purchase of Christmas presents and Christmas dinner, but it might also help others find presents. Take a look through your house and accumulate anything you aren’t using. Sites like eBay and Facebook Marketplace make it easy to sell online.
Think twice about borrowing money
You might be tempted to borrow money in order to fund the Christmas period, but debt can create added stress on your mental health. As much as we might want to borrow money and deal with the consequences later, think about ways you can save money instead while still making the season memorable.
Take advantage of the January sales
If you’re able to do so, ask loved ones if they would mind having a gift-giving session in January. That way, not only are you able to extend the fun a little past the new year, but you can also purchase presents in the January sales and save a little money. Even if you don’t do gifts in January, how about making plans to meet up with loved ones anyway? Connecting with people we love is great for our wellbeing and we shouldn’t need to wait for an excuse to spend time with friends and family.
Look out for discounts and freebies
Once you’ve set a budget, keep an eye out for deals and freebies that might help you stretch your money further. For example, websites offering free photo prints can make for a great personal gift for your loved ones. Keep an idea open for ideas.
Organise a Secret Santa
It can be difficult to shop for large groups of people if you’re on a limited budget, but suggesting a Secret Santa can be a great solution. Everybody agrees on a budget, adds their name to a hat, and then pulls one name at random. Then, you keep whose name you pulled a secret. Secret Santa takes the practice of setting a fixed budget and adds a little fun mystery to the festivities. And, this way, nobody feels the pressure to overspend, and everybody gets a gift of approximately equal monetary value.
Join a supportive community
This time of year can be particularly stressful for many reasons. If you’re struggling, you can join a community of understanding people. A supportive and moderated space where you can talk with like-minded people in similar situations. Just talking through your worries, whether financial or otherwise, with someone who understands can really help lighten the load.
The bottomline
Ultimately, though, we understand the pressure to please loved ones and give children the perfect Christmas, which can lead to overspending and debt. That’s why we recommend some general tips that apply not just to this time of year, but to the whole year. It might be helpful to know that the average household Christmas budget is around $2,400 including food, decorations, presents, travel, and so on. Knowing this, you can use a budget planner to work out how much you need to save. This way, you can enter the holiday season with your budget already set.
It might feel uncomfortable but try to talk openly to loved ones about any financial worries you might have. At the very least, use these conversations to set a mutual budget you feel comfortable with following. Debt can happen to anyone, but it can be avoided. Don’t take out unnecessary loans, even if you’re intending to use the money for Christmas presents. If you’re already in debt, get some assistance on how to deal with debt. Your financial advisor is a good resource. We have these conversations with clients every year.
We hope our tips for saving money at Christmas and New Year’s help you to manage your finances at this time of year. No matter what your plans are, we wish you a happy, healthy, and restorative holiday season while ensuring you are Keeping Life Current.
