We've all felt it before- the Holiday Season rolls around and so does a wave of financial stress and anxiety. 

Your head is spinning as you begin to create the list of everyone you need to buy for this year: Family members, friends, your boss, your children's teachers, the 3 gift exchanges you've been invited to, maybe a significant other.... and obviously your dog needs a gift. 

If you're anything like me, this list above is very LONG even when being conservative and cutting out the unnecessary gift to Aunt Fran this year. Where are my big family friends at?! Or children of divorce? My husband and I are both #childrenofdivorce and within our immediate family, we have 26 people/gifts to buy for in December (2 December birthdays in there, too!). 

You quickly realize this list equates to a considerable amount of money that you're about to shell out on material items. STUFF your loved ones may or may not love... it might get put in a closet and end up in a landfill before next Holiday season even rolls around. 

And then your mind races... "how much do I spend?" ... you're thinking about how your sister-in-law, who is in a very different financial position, and always goes above and beyond with a $150+ gift and you've got pressure to match it. 

OR maybe you just loosely think about what you are spending, because you don't want to face the stress, and purchase on your credit card thinking - oh I'll pay it off in January and deal with it then. 

^^^ ALL OF THIS IS STRESSFUL. Unwanted and unnecessary stress during the Holiday season when at the end of the day - we just want to feel good. We want to absorb the reason for the season and be able to spend quality time with loved ones, minus the anxiety. Am I right?!

Oh, and I didn't even mention the fact that you have to wrap all of these gifts. Can we talk about how much gift wrap costs?! IT LITERALLY GETS TORN UP AND THROWN AWAY. 

Now let's dive into why you're likely here - my tips & strategies for how to avoid and curb the financial anxiety and gift-giving pressure this time of year.

I have experienced Holiday stress beyond measure and a few years ago I decided I was fed up - I was going to do something about it so I didn't have to dread the month of December ever again. 

I'm breaking these tips into 2 buckets: 

1) How to Reduce Financial Anxiety during the Holiday Season

2) How to Reduce Gift-Giving Pressure 

How To Reduce Financial Anxiety during the Holiday Season

Tip #1: Create a (realistic!) spending plan 

Sit down and make a list of each person/gift you need to buy a gift for and assign a max spend for each person on the list. Be realistic about your list! Don't buy a gift for people just to buy a gift for people - some gifts feel more necessary, like for your mother perhaps, but do you need to buy a gift for the neighbors if doing so even as a small gesture will add stress? It's probably not worth it. You can be a great neighbor in other ways like grabbing packages and letting neighbors know when they left their garage door up. 

The max spend should be something that YOU feel comfortable with and one that doesn't set you back (i.e. into credit debt that you have no idea when you'll be able to pay off). This may require budgeting out your expenses for the next month or 2 factoring in all upcoming bills, etc - and don't forget - student loan payments are due again in February if you have them. Do not feel like you have to "match" what you spent on each person last year - you're not going to have financial anxiety this year, remember? Some of the most meaningful gifts are not expensive - and an act of service + a nice Christmas letter can be completely free. 

Tip #2: Stick to the Spending Plan + Shop Sales!

Now that you have your spending plan in place - stick to it! This is honestly the hardest part - and if you're anything like me - it's easy to go overboard! I love giving gifts! Remind yourself why you set the spending plan to begin with and stick to it. 

Shop sales & gift based on the value of the item! What I mean by this is - if your spend plan is $50 for your Brother and you find his favorite $50 Nike shorts on sale for $35... snag those for $35 and call it a day! The value of the item is $50 and you don't need to spend more. This practice can help you come in under your spend plan and feel great about it - leaving extra $$ to throw down on financial goals this month. 

Tip #3: Create a SINK FUND for Holiday Gifting

I realize it is December 2nd and this isn't a super applicable tip RIGHT NOW - but highly recommend setting up a SINK FUND for Holiday gifting in 2022. 

What is a SINK FUND? A SINK FUND is a pool of savings set aside for something specific, in this case, holiday gifting. 

My husband and I start our SINK FUND in January - we create our spend plan at the beginning of the year knowing how many people we need to buy for and we add in a little cushion of course because there is always someone or something that pops up. We take the total of that spending plan, divide it by 12, and set aside that number each month throughout the year on the 1st of the month. Then - you guessed it - by December you have a full pool of money ready to cover all of your holiday gifting without a lick of stress. 

For example- 

$1,000 Holiday Gifting Spend plan set in January = $1,000 / 12 = set aside $84 each month and BOOM your set in December

OR

$1,000 Holiday Gifting Spend plan set in July = $1,000/6 = set aside $167 each month on the first of the month until December

How To Reduce Gift-Giving Pressure During the Holiday Season

Tip #1: Acknowledge & Communicate the Pressure with family/friends and present an alternative

Chances are, they are feeling it too!! Be the one to acknowledge it and bring up an alternative that is meaningful but reduces the financial burden. 

It goes like this "Hey (friend group, siblings, you name it) if you're anything like me, the holiday season can be a lot - instead of everyone giving everyone a gift this year, what about drawing names instead? 

^^ Mostly likely everyone will nod their head. I highly doubt anyone you care about will be like "NO I need to get 5 gifts total and I want to buy & wrap 5 gifts still!!!"... and if they do, there are deeper issues with this person, and I am sorry. But likely, the other 4 people in this group will agree with you and this person will snap out of candyland.

Other suggestions aside from Drawing Names... 

1. An outing or experience instead of any gifts - simply go out for a nice dinner & quality time! Or maybe you go to the local Nutcracker play or drive through a light tour. 
2. White Elephant Gift or Ornament Exchange with a limit set - like $20 for example. 
3. Simply no gifts at all - this might work well for say, step-siblings or nieces/nephews for example. Chances are they might be cool with omitting gifts entirely and just being present with you for the annual Christmas day shenanigans with the fam.   

Tip #2: Discuss your Financial Goals/Situation with your family

You don't have to get into the nitty-gritty details, but this can REALLY help, I promise! 

This is a good tactic for those people in your life who you exchange gifts with.. but they are in a very different financial situation than you are... and you feel pressured to match their spending. OR even if you simply put a burden on yourself to match what you did last year - think "I gave my sister a $150 gift last year... I can't give her a $75 gift this year (this has been me in the past.. I get it)! 

Yes, money is a taboo subject in our society and this can feel like a gut punch. Did you know that 39% of Millennials would rather disclose an STD than their debt?! 

^^ don't be so ashamed of your debt or financial goals! Your loved ones, family, and friends (hopefully) want you to be the best person you can be. 

This one goes like this...

"Hey (sister, sister-in-law, friend, parent, whoever) this year I took a step back and began prioritizing my personal finances. I am working on improving my money habits and spending thoughtfully as I attack (insert X financial goal like paying off your student loans, building your emergency fund, increasing your retirement investments, etc) therefore this year I'm thinking of spending $X on your gift. Does that sound okay and can you give me some gift ideas around that price point? Also, please do not feel like you need to spend more on me - I am simply grateful to be in your life and the price of my gift doesn't matter". 

This one can relieve a lot of stress and even create a cheerleader for you as you march towards your goals! My sister and I had this exact same conversation years ago. 

To wrap it up (pun intended)!

Financial stress and anxiety during the holiday season is something the majority of Americans feel.

You are not alone. Money is just such a taboo subject which is why we continually feel this pressure year after year - so many do not acknowledge it and address the stress head-on! 

I hope that these tips and tactics can be applied to your situation or situation(s) and reduce any load of pressure/anxiety you're feeling this year and in the future!

No gift is worth the financial anxiety and high interest that comes with credit card debt. 

Cheers & Happy Holidays - I cannot believe it is December!

Mallory