For Michigan mom Jessica Secrest, holiday shopping is an annual exercise in financial conservation. Giving herself a $200 hardline budget, she shops the practical route: purchasing only small, common-sense gifts, thrifting holiday decorations, cutting costs wherever she can, and staying home for the holidays.
Featured in a recent article by Bankrate, Jessica has a lifetime’s worth of experience sticking to a budget, having been raised in a family where funds were typically tight. Even now, her extended relatives stay home while focusing on “white elephant” gift exchanges. Jessica has never actually traveled for the holidays and doesn’t throw extravagant Christmas parties simply because she can’t afford it.
Unfortunately, Jessica is not alone. In 2023, 52 percent of adults in the United States are not traveling overnight for any of the winter holidays – Thanksgiving through New Year’s – according to a Bankrate survey.
“If staying home during the holidays means saving money, it’s a financial decision you won’t regret, especially at a time when the economy feels so uncertain,” says Alex Gailey, a Bankrate senior reporter. “Any money you’re able to save up from not traveling can help you reach your emergency fund goal or allow you to pay off any high-interest debt faster.”
Increasingly rising costs keeping families financially earthbound
Several economic factors have many Americans just like Jessica Secrest foregoing the idea of visiting loved ones this yuletide holiday, citing financial concern over their holiday budgets. Even as the U.S. Bureau of Labor Statistics shows inflation rates currently set at 3.1 percent – lower than the historic average of 3.28 percent – underlying price pressures like apartment rents, restaurant meals, car insurance, and many other services, remain stubbornly high, according to the Associated Press.
While most economists forecast the rate of price increases to keep slowing down early next year, that prospect doesn’t – and shouldn’t – satisfy those who are seeing their rental rates, among other items, gradually increasing anyway.
But it appears families are responding with moderation this December. A new study by Forbes Advisors and featured in The Hill found that seven of 10 Americans who live paycheck-to-paycheck said they expect to spend the same amount or less during Christmas than they did last year. Another 30 percent of those Americans living paycheck-to-paycheck, whose income barely covers their expenses without anything left over, expect to spend more during this holiday season.
Regardless, stubbornly high prices for such items as gifts, travel, and decor are keeping families scrambling to rearrange their budgets.
“I’m in several moms’ groups and I can’t tell you how many posts (there are) right now with people saying, ‘I’m not going to be able to afford a lot for the holidays. What are you doing, what suggestions do you have,’” says Erin Voisin, a certified financial planner and managing director at EP Wealth Advisors. “People are definitely experiencing it and (are) looking for resources and ideas to help in any way they can make the holidays or summer breaks.”
Tips for families cutting back on the coming holiday
For members who need a few tips on cutting back on holiday gifts, there is no shortage of advice to offer. Feel free to take a few of the following ideas from Mydoh to the benefit of those in your community who need them:
- Start saving money earlier in the year
So you’re noticing the holidays stress out your members. Take some time to work with them throughout the year on setting aside a set amount for the next holiday they’re aiming for. This effort can also be a teachable moment for the member to work with their children to do the same.
- Help members achieve stability with a small-dollar loan
According to a Bankrate survey, 54 percent of holiday shoppers expected to feel financially burdened this season. In fact, nearly a quarter of holiday season’s shoppers claim the shopping season will strain their budgets, while 13 percent expect to feel pressured to spend more than that with which they’re comfortable.
It doesn’t need to be that way. Steering members to your credit union’s small-dollar loan program is a common-sense solution for your members to afford the holidays without adding strain to an already hectic season. Giving them the financial flexibility – especially with QCash’s Holiday Specialty Loans – to afford the gifts and festivities enables members to enjoy the holidays without the overwhelming stress of, say, paying off a predatory payday loan in just two weeks.
- Consider accounting for all their holiday season expenses
It’s not just gifts your members may have to account for. Other, more expensive items like travel plans, get-togethers, family dinners, food, decorations, gift wrapping, stocking stuffers, or teachers’ presents may influence your budget. Some great ideas or alternative holiday options include: hosting a potluck instead of dinner cooked entirely by you; or “Secret Santa” gift swap instead of gifts for extended family.
- Manage your kids’ expectations (with tact)
As kids, we ourselves may have secretly harbored fantastical hopes and dreams each and every Christmas. If this year is going to be on the leaner side, ask the kids to pick a few gifts they really want and help set some expectations early on in the season.
- Shopping for deals
Stretch that budget a little further by searching for the best deal. Take advantage of sales opportunities. Many brands have discount opportunities on their websites at various times throughout the year. Either way, when you’re shopping online, take into account shipping prices.
- It’s a DIY holiday!
Cut down on expenses and DIY on everything, from a wreath for the front door to a centerpiece for the dinner table. Short on ideas? Social media platforms like TikTok and Instagram serve as great idea generators for sparking that Christmas spirit around members’ houses.
The best thing members can do is maintain a positive mindset during this time of economic recovery, even if they find themselves staying home for the holidays.
Interestingly enough, Jessica Secrest exhibits that very quality:
“We’re all on hard times right now,” she says. “2023 is the year that we should all be understanding that it’s rough out there. And if that means making your gifts at home or thrifting your decorations or buying things off Facebook Marketplace . . . really, what’s the difference?”