5 Financial Boundaries That Will Help You Feel Guilt-Free This Holiday Season

A woman smiles while holding a Christmas gift
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Many Americans are cutting back on spending this holiday season, according to recent surveys.

One study from financial services company Empower found that more than one-third of Americans (37%) plan to spend less than $250 on gifts this year, while just over 10% plan to spend more than $1,000. More than half of Americans (51%) surveyed are not planning to travel for the holidays.

But all this cutting back can create guilt, especially if your friends or family expect you to follow certain traditions — which might include traveling to celebrations, indulging in special events, or spending a certain amount on a gift for each person on your list.

“Between gift-giving, holiday feasts, travel expenses, and decorations (and the list goes on), many of us tend to overspend — it’s no wonder people might feel more dread than enthusiasm about the holiday season,” said Maya Sudhakaran, head of growth and acquisition at the investing app Plynk.

Remember that, come January, you’ll be the one facing high credit card bills or an empty bank account — or both! While making holiday memories is something to treasure, it doesn’t have to come at the cost of your financial peace of mind.

“Thankfully, there are ways you can minimize the financial stressors many experience around this time of year,” Sudhakaran said.

Knowing it’s okay to set financial boundaries can help you celebrate the season with true peace, joy, and goodwill toward all.

Make Your Money Work for You

Set a Holiday Budget

Your budget will be the backbone of your holiday boundaries. If it’s not in your budget, you can say no without overanalyzing or feeling guilty.

“A budget does not limit you,” said Nate Astle, a certified financial therapist for Beyond Finance, a debt resolution company. “It gives you the freedom to spend.”

Make a List — and Check It Twice

Your overall holiday budget will let you know how much you can spend on parties, events, travel, and even clothing you might need for these occasions. But it’s equally important to itemize your gift-giving budget as a separate line item so you’re not tempted by sales, said experts.

“Determine how much you can afford to spend this year, make a list of everyone you plan to give gifts to, and specify the intended gifts (with respective costs),” Sudhakaran said. “Seeing a full list with a cost breakdown can minimize the risk of overspending and help ensure that you allocate funds thoughtfully to each person on your list.”

Give the Gift of Time

“A heartfelt present seldom needs to break the bank,” Astle reminded us. “Aren’t there certain people in your life who appreciate the thought behind something inexpensive or even for free?”

He continued, “There are plenty of ways to show your love that won’t cost money, such as a free night of babysitting or offering to take someone’s pet out for a walk.”

Make Your Money Work for You

This philosophy can extend to holiday dinners or other traditions. Instead of paying per-person to visit a pricey walk-through holiday light show, you can make some thermoses of hot chocolate and drive around the neighborhood with family or friends looking at Christmas lights.

Instead of an expensive dinner out, you can meet for drinks and appetizers. If you’re the one that usually hosts a feast during the holidays, consider making it a potluck. Gatherings where everyone contributes give guests the opportunity to share their favorite foods and traditions.

“Whatever the case, if it comes from the heart, your sentiment matters most. These gestures can strengthen relationships far more than another item someone may only partially desire or need,” Astle said.

Practice Mindfulness Around Holiday Spending

You might encounter some pushback — from others or even from within — when you begin suggesting switching up traditions. Astle suggested that mindfulness and self-care can help address the emotions driving your behavior.

“Whether it is your impulse spending or the desire to express love through giving to others, taking a few deep breaths, checking in with your body and naming the moment’s emotion can help make holiday spending much more manageable and less overwhelming,” he said.

When your heart is telling you to bow out of an activity, there are ways to broach the conversation. First, remember that “No,” is a full sentence.

Often, however, saying no in a way that doesn’t use that word can minimize resistance from others. Try a softer phrase like, “I wish I could, but that’s just not possible.” And leave it at that. You don’t have to explain the reasons.

Make Your Money Work for You

Stay Focused

Whether you’re feeling the urge to overspend or encountering outside pressure, keeping your overall financial goals for 2024 in mind can help.

“Get ahead of saving and investing goals,” Sudhakaran said. “As you prepare for increased spending, this can be a great time to reflect on how you’ve been managing your finances, while also setting a strong tone for the upcoming year ahead.”

You can even begin to ramp up your savings now. Sudhakaran suggested investing in a few dollars in the stock of every company or brand you purchased a present from this year. You can use finance apps like Plynk to invest in fractional shares of blue-chip companies like Amazon and Apple.

“One of the best gifts you can give yourself is taking proactive steps towards a future of financial security,” Sudhakaran said. “It’s a gift that gives the opportunity to grow until next year’s holiday season and beyond!”

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