7 Tips for Reducing Holiday Financial Stress

Family with two kids in front of the store window

The holiday season is a time of joy and celebration, but it can also be a source of financial stress for many people. Here are seven tips to help you reduce holiday financial stress and make the most of the season without breaking the bank. 

1. Create a budget for the holidays 

One effective way to manage holiday financial stress is to set and stick to a budget. Start by listing income at the top, followed by expenses like rent, car payments, and bills. Include holiday savings for travel and gifts to avoid a financial crunch in December. 

2. Set expectations 

Talk to loved ones about holiday expectations and budgets. Consider setting a gift value limit or agreeing to only buy presents for the children in your life. Your loved ones might feel relieved knowing they’re not alone in wanting to cut back on their gift budget. 

3. Be sales smart 

Look to save money at every turn this holiday season while still checking off your ‘nice’ list. Use cash back apps (like Rakuten) when shopping online. If you plan to shop in person, search for store coupons before heading to the checkout line. Be strategic with Black Friday sales or other deep discounts, and stick to your list instead of buying things just because they’re on sale.  

4. Keep your receipts 

Many stores have a generous return policy, which you can use in your favor. If you see something you recently bought on sale elsewhere, return it and buy it at the lower price. Receipts are also helpful in case the recipient needs to make a return.  

5. Consider crafting or creative gifts 

Meaningful gifts can be inexpensive. Instead, consider giving crafted items or experiences as a gift. You can bake cookies or even offer your time to a favorite project or charity. There are countless ways to show someone how much they mean to you without spending a lot of money. 

6. Download promotion code tools  

When shopping online, free tools like Honey and Capital One Shopping can help you find the best deals by automatically scanning for promotion codes and coupons and applying them to your online orders. 

To use them, download and install the browser extension to possibly save money on holiday gifts with discounts or cash back. 

7. Set money aside for the next holiday season 

Planning ahead is always a good idea, especially when it comes to holiday shopping. Even if you can only put away $5 a week, start saving small amounts of money now for next season. By next year, you’ll have enough saved for gifts or travel. This way, you can reduce financial stress during the holiday season and focus on enjoying the festivities. 

Paying off post-holiday debt  

The post-holiday season can be financially challenging for many people as Christmas gifts, holiday parties, and traveling expenses can add up quickly. It’s common for individuals to accumulate debt during this time, which can be stressful and overwhelming.  

If you’re struggling with post-holiday debt, there are several options available to you that can help you pay it off.  

  • Monitor expenses: Keep track of your spending to better understand where your money is going. 
  • Start a side gig: Doing freelance work or starting a side hustle can help increase your income. 
  • Consolidate debt: Transferring your high-interest debt to a card that offers 0% APR or consolidating your debt into a single loan with a lower interest rate could simplify payments and save you money on interest charges. 

Whatever approach you take, it’s important to start paying off your debt as soon as possible to avoid further financial strain. 

The holiday season is undoubtedly a joyful time of the year, but it can also lead to financial stress for many people. However, with a bit of planning and smart decision-making, it’s possible to enjoy the festivities without overspending. 

Written by Rose Wheeler

Rose Wheeler manages the writing team and creates content strategy for Prosper. With over 15 years of journalism experience, she has covered business and finance topics, including consumer finance, banking, credit, and money management. Rose was previously Editor-in-Chief for Wealth Hub at Future and Deputy Editor at Forbes Advisor. In her free time, she enjoys exploring new places, reading, and playing video games.

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