Tis the Season: Managing Personal and Financial Stress During the Holiday Season

Behavioral FinanceBudgeting & CashflowFinancial PlanningMoney MindfulnessWomen and Finances

Nov 30

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Tips on managing financial and emotional stress amidst the holiday season.

Holiday Fun Can Lead to Stressors

This time of the year, there's a lot going on.

Last month, I spent some time with my husband's side of the family. We took advantage of the Thanksgiving break for the kids and a few days off work for the adults to get together from different parts of the country. We had good meals, laughing and fun experiences, and most of all I felt surrounded by love.

In a couple short weeks, there's the end of the year Christmas holiday with my family, New Year's plans, and an extended winter break from school for my son. It's a lot to plan for, being out of a routine, and it's hard to get everything done yet still enjoy the special traditions like decorating homemade cookies with my nieces and nephews. I'm trying to take care of myself throughout by doing things I love - like hot yoga and spending time outside.

Being out of a routine can wreak havoc on our mental state - when we're not rested and taking care of ourselves, all the excitement can lead to some of the heavier emotions like stress, anxiety, grief and anger. In turn, this can lead to poor decision making and less emotional regulation because we're not feeling our best and perhaps not thinking as calmly and clearly as usual.

Being out of a routine can also create some challenges in the area of personal finances. At this time of the year, we tend to spend more money than usual on dining out, big meals prepared for guests, travelling, gifts, babysitters or kids' activities, and maybe an ugly holiday sweater for the contest at work. Plus, heightened emotions can sometimes trigger more regrettable and unnecessary spending.

A study by TransUnion found a 6.9% increase in bank card balances in Q3 2024 vs 2023. The average credit card balance is $6,380. Over 171 million consumers are carrying a balance on their cards from month to month. And this time of the year, it's easy to add to the credit card without considering for how the purchases may or may not fit into what we know we can afford.

Here are a few suggestions to navigating the season. TLDR: Be mindful when making a purchase, and take care of your emotional health.

Balanced Budgets Can Still Create Joy

It's easy to overspend at this time of the year - buying a gift for every niece or nephew, plus a couple extra for your partner. Agree with your family on how you plan to celebrate holidays between yourselves. If budgets are tight this year:

Make a game out of the most creative gift you can give for under $25.

Instead of buying a gift for every adult in my family, we buy just one gift for $50 or less, wrapped, and play the Switch, Steal game. The game has become so fun that the kids (who traditionally each get a gift from every adult) have been clamoring to participate even though it means they get less gifts.

Little ones love unwrapping best of all. My friend did all her holiday shopping for her little ones at a thrift store and toy exchange sponsored by a nearby church, and spent a fraction of what she would have spent buying new.

Instead of going out to eat, offer to host a potluck where every attendee brings something they love and shares what they love about their dish. Even young ones can participate, with a little help.

Another idea is to pause for a moment, and think about your future self. Are you making a choice right now that helps your future self?

The Gift of Memories

Are there older folks in your life (and by older, I mean older than you!)? Don't buy them a gift. Instead, write them a letter expressing how they have impacted your life. Think about a specific story that illustrates their impact on your past, present or future. I promise you, they will appreciate this gift more than a trendy kitchen gadget.

Are there memories and traditions you can create with your own kids that don't cost a lot? Ice skating at the park district pond, putting up holiday lights outside as a family, or making cards to hand out at a retirement community can all be new traditions.

The Joy - and Stress - of Travel

Are you planning to travel over the holiday season? If you're buying a plane ticket or staying at a hotel, check whether there are lower rates for off-peak travel times such as late night or early morning. Check your credit card rewards or loyalty points or miles to see if you can get any deals. Maybe it's too late to do this year, but if travel is important to you, set aside some cash each month for a Travel Budget. When it comes time to do the trip, you'll be more prepared with the cash you need to cover the travel.

Also plan for your emotional well-being. Shorten the trip by a day if holidays and family visits feel stressful or overwhelming for you. Get enough sleep, even if it means being the first one to leave the party. Say no to one last drink. Take a walk after dinner instead of lounging on the couch. When your body is taken care of, you set up your mind for being able to make healthy and mindful choices.

Charitable Causes

This is the time of year when many folks consider donating to a charitable cause. Can you make a contribution that still fits within your budget? If not, consider making a little less of a contribution this year, and see tip above: going into next year, set aside something from every paycheck for the charity of your preference. Check with your employer to see if they offer a charitable contribution match - many large companies offer this benefit which is seldom taken advantage of.

Give Yourself Some Grace to Reflect

Did you slip up, and spend more than you planned? Don't judge yourself with shame. Instead, look at the situation with curiosity: what happened, and why did I make that choice? Notice the other circumstances that led to making this decision which you now regret. Were you tired, stressed out, in a rush, feeling pressured?

Reflecting on your financial health can give you a moment to consider what worked and what didn't work related to your personal finances this year. As you head into the new year, are there changes you can implement to start the new year off right? Learn from your mistakes, and choose to keep doing what's working.