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The Stress of Holiday Spending

The holiday season can be a wonderful time to enjoy festivals, spend time with friends and family, take part in traditions, and more. However, it can also be a very stressful time of year. On one hand, you likely have a very full calendar during the holidays, and this can leave you feeling frantic and hurried. However, another major cause of holiday stress is holiday spending.

There is a lot of pressure to spend, spend, spend at this time of year and this can lead to financial troubles. According to a recent survey by Manulife Bank, 60 percent of holiday spenders are willing to go into debt by spending during this holiday season. In addition, only 40 percent of those surveyed say they have a holiday budget and 60 percent of those who do say they’ll likely overspend anyway.

Spending more than you can afford during the holidays can lead to many serious troubles. Most people who break their budgets on holiday season spending do so by taking on credit card debt. This can be a big problem as credit card debt is very difficult to pay down. Most cards have very high-interest rates and, if you only pay the minimum payment each month, it could take many years before you eliminate the debt. Not only that, but you’ll spend a lot of money in interest.

Financial Stress Increases During the Holidays

Of course, financial troubles lead to stress. The Manulife survey found that four in 10 Canadians say that they get anxious or stressed in the lead up to the holiday season. The same percentage say that the holidays cause greater financial stress than any other time of the year. This stress can have very serious negative impacts. One quarter of Canadians who will spend money during the holiday season say the financial stress of the season negatively affects their mental health. Debt can lead to several health issues, including difficulty sleeping, anxiety, and much more.

Of course, stress and anxiety isn’t what the holidays are supposed to be about. Unfortunately, this often becomes the case.

About 80 percent of those surveyed say that the holiday season has become too focused on spending money. With “Black Friday,” “Cyber Monday” and the overall trend of increased advertising during the holiday season, it’s easy to see why people feel this way. Many retailers go all out to pressure people into spending. This leads to the fact that about half of holiday spenders feel pressure to buy gifts for their loved ones.

Hiding Spending During the Holidays

Perhaps the most troubling finding from the Manulife survey is that one in 10 indebted Canadians admits to have hidden the cost of a purchase from a loved one. In fact, about 18 percent of men and eight percent of women have hidden the cost of a vehicle! Other purchases where the true cost is sometimes hidden include clothing, electronics, and entertainment.

Hiding costs (especially very significant costs, such as a vehicle) can be problematic for many reasons. One major reason is that it can lead to one family member making financial decisions based on incorrect information. For instance, if a husband hides the true amount of his debt from his wife, she may go on spending as if the family does not have a serious debt issue. Of course, since the reality is that debt is definitely a problem, not focusing on debt repayment can lead to trouble with creditors in the future and even potential bankruptcy.

Of course, not telling someone the true cost of an expense can also lead to a serious breakdown in trust in the relationship, which can be a huge negative going forward.

Dealing with Financial Stress During the Holidays

It’s natural to feel greater stress before and during the holiday season. The survey shows that a large percentage of the population feels this way. However, there are tactics people can use to cope with these pressures.

  • Planning is critical. Before the holiday season arrives, write out expected costs and work them into a budget.
  • Take your shopping list with you whenever you shop and don’t buy anything that isn’t on the list, no matter how tempting it may be.
  • Make cuts as necessary. Some expenses won’t fit into your budget, so work to fit the most important ones in. Spend time prioritizing expenses. For instance, buying a gift for your child could be a top priority while getting new decorations for your home could be farther down the list. If you need to make cuts, eliminate the least important expenses first.
  • Find ways to spend time with friends and family that are not too expensive. For instance, get everyone together to watch movies at your home, go for a walk to look at holiday lights and decorations in your area, or participate in free holiday events in your community.

If you need help with your financial situation, consider speaking to a licensed professional. You can always contact us for a free consultation.