The holiday season is here, but so is inflation.
For some, this is the most wonderful time of year. But if you’re like 89% of consumers polled by Numerator, you’re bracing for the impact inflation will have on your spending and gifting.
With soaring costs, worrying about how you’ll pay for presents or whether you’ll be able to afford a nice Christmas dinner can take the fun out of the holidays.
My husband and I have basically skipped Christmas for the last few years because we couldn’t afford it. Since we don’t have kids, it’s pretty easy for us to opt out of celebrating. We don’t exchange gifts, we don’t entertain, and we don’t travel to see family.
So what can you do if you’re like me and can’t afford Christmas?
If you’re struggling, there are a few things you can do to help ease the stress without ruining the holiday.
Having a small or non-existent budget probably means you can’t afford to travel, buy gifts for everyone, and say yes to every get-together this Christmas season. But that doesn’t mean you have to opt-out of the celebrations entirely.
Keep it simple. Who is most important to you? What traditions are you not willing to give up?
Once you determine that, spend your money accordingly.
“We are transitioning back into the meaning of Christmas, focusing on providing instead of receiving, and challenging the kids to brainstorm ways we can serve our community,” says Nicole Graber of Gracefully Abundant.
Overspending at Christmas is extremely easy and common. Whether you have a lot of money to spend or only a little, you need a budget. Figure out how much you can afford to spend on holiday shopping without getting into debt or financial trouble.
Consider all potential holiday-related expenses, such as gifts, cards, gift wrap, shipping, decorations, food and drinks, entertainment, travel, donations, family photos, etc.
Then taking your priorities into account, start assigning the amount you can spend on each category, person, or activity. Make sure your total doesn’t exceed what your budget allows. If it does, take another look at what’s important to you, and try again until you can make it work.
Stick to this budget!
Check where your budget stands before making any purchase, and update it afterward so that it stays up-to-date.
If you’re concerned about overspending during the holidays, take out what you can afford to spend in cash or use a pre-paid credit card for that set amount. Once it runs out, you’re done. No more spending!
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3. Start Early
It’s not uncommon these days to walk into a store and see Christmas items on the shelves next to Back to School and Halloween items. There’s even a term for this, called the “Christmas Creep.”
As soon as you see those aisles of green and red, you start thinking about Christmas, whether you want to or not.
Of course, companies start promoting the holidays early to get you to spend more. Especially on “Black Friday” and “Cyber Monday.”
And it works. 38% of consumers surveyed in the 2022 Deloitte holiday study say they will be shopping earlier this year.
It doesn’t have to be a bad thing, though. You have a better chance of finding the perfect gift at an affordable price if you have time to look.
Keep an eye on deals and promotions on the items on your Christmas list. Are there any great sales you can take advantage of?
Sign up for newsletters from your favorite stores to take advantage of the discounts they offer to new subscribers. (And then maybe unsubscribe in the new year to avoid any future impulse buys?)
You can also browse the store’s clearance sections and stock up if they have what you need.
Another bonus is that it’s easier to manage your spending by spreading it out over a few weeks or months.
Starting early also gives you more time to make extra money if that’s what you need to do.
4. Skip the Gifts
It’s okay to have a giftless Christmas and not feel guilty about it. After all, the holidays should be about togetherness, not material things.
Sending handwritten cards to friends, family, and other important people is an affordable way to show that you care and are thinking of them. If money is tight, you can do this for free online.
Do fun, free things with your loved ones, like going to winter carnivals and parades or meeting Santa Claus. Host a pot-luck dinner or a Christmas movie marathon. Drive around looking at the lights with your loved ones. Go sledding. Volunteer together at a soup kitchen or food bank.
“Many museums and cultural institutions have special holiday programming or, at the very least, have festive decor,” suggests Monica Fish of Planner at Heart. “The best part? You can check out admission passes just like books from your library for a no-cost.”
If gifts are essential to your celebration, hold a Secret Santa or gift exchange with a set dollar limit. It will reduce stress and keep your spending within your budget.
“Due to increased inflation, we have decided to modify our family gift-buying tradition,” says John Dealbreuin of Financial Freedom Countdown. “We will only be buying gifts for children instead of buying gifts for everyone.”
5. Get Creative
Gift-giving doesn’t have to include spending (a lot of) money. Remember, it’s the thought that counts.
If you’re crafty, handy, or artistic, why not put your skills to use and make handmade gifts? Bake cookies, upcycle those mason jars, knit a scarf, build a wooden bench, or put together a gift basket. Pinterest is a gold mine for do-it-yourself ideas!
Or if you’re more like me and lack those DIY skills (or you simply don’t have the time), why not offer to do something for your loved ones instead?
The good old coupon book of “one free massage” and “one breakfast in bed” is a tried and true gift idea for your significant other. But that same concept can work for other people in your life. Instead of buying gifts, you could always offer to babysit for a loved one on a Friday night or give your child a pass to stay up an hour later.
There are still some costs associated with any DIY gift, but they are often a more affordable option. And people will appreciate the personal touch.
6. Celebrate Late
If you’re struggling to afford Christmas, celebrating late will allow you to stretch your budget further.
Retailers want to sell their leftover inventory (especially Christmas items) and offer significant discounts in the days right after Christmas. Take advantage of these sales or stock up on anything non-perishable to use next year, like gift wrap and cards.
Boxing Day (December 26) has become a “shopping holiday” for those of us living in the UK, Canada, and Australia. Similar to Black Friday, retailers offer significant discounts on Boxing Day that are often extended into Boxing Week.
The holidays are also busy—90% of those surveyed by Deloitte plan to travel in November and December. Postponing your trip until January makes it easier to get together and avoid crowds. You can also take advantage of cheaper flights and accommodations.
According to Hopper’s 2022 Holiday Travel Outlook, airfares between Thanksgiving and Christmas will be the highest in the last five years. They suggest traveling on less popular dates (such as after the holidays) to save as much as $300 on domestic flights.
7. Be Honest
The best piece of advice I can give to someone who can’t afford Christmas is simply to be honest about it.
You don’t have to share the details of your finances, but don’t put yourself into debt because you’re being polite or too shy to speak up.
Your loved ones should be understanding and respectful of your situation.
Deloitte found that more than a third (37%) of respondents say their finances are worse than last year. Many people are not working right now. There’s a good chance that money is tight for your loved ones too. You’re doing them a favor by offering to celebrate differently.
No matter what you do, remember that Christmas is about more than just gifts and money. It’s about spending time with the people you love, creating memories, and feeling grateful for what you have.
In short, if you can’t afford Christmas, you absolutely can still enjoy the holidays without getting into debt. Have a plan. Set a budget. Be creative. And focus on the non-material side of Christmas.
YOUR TURN: Do you have any advice on how to save more or spend less during the holidays? Please leave a comment and let us know!
Amanda Kay, an Employment Specialist and founder of My Life, I Guess, strives to keep the "person" in personal finance by writing about money, mistakes, and making a living. She focuses on what it’s like being in debt, living paycheck to paycheck, and surviving unemployment while also offering advice and support for others in similar situations - including a FREE library of career & job search resources.