Holidays can bring financial stress, here’s how to reduce it

Dec 21, 2022, 10:52 AM | Updated: 11:10 am

NEW YORK (AP) — The holidays are supposed to be a joyful time, but they can also be financially stressful. With gifts, social gatherings and plane tickets home, the costs can start piling up.

With inflation easing but still high, 57% of Americans say it has been harder to afford the gifts they want to give, according to a new poll from The Associated Press-NORC Center for Public Affairs Research.

Compared to the height of the pandemic, “we’re having less stress navigating the things that bring us together during the holidays. What is different from last year is how much financial stress there is,” said Dr. Rebecca Brendel, director of the American Psychiatric Association.

Here are recommendations from experts to reduce financial stress during the holidays:


In many families, the holidays mean going all out with gift giving. But this can quickly become stressful if your finances make it hard to keep up.

Managing expectations is key, according to Sarah Foster, a Bankrate.com analyst.

“During the holiday season, we often feel like not talking about money, not letting individuals know how much the gift we bought for them cost,” said Foster, who recommends leaving aside taboos and talking about how much you can afford to give this year.

For Kathy Colmenares, a Connecticut-based senior caregiver and singer who experienced financial challenges during the pandemic, setting expectations meant choosing to cut down on the amount of money she sends to her family and friends in Venezuela.

“I used to not care if I had no money as long as I could send money to help,” she said. “I have to put myself and my family first.”


Setting a budget can help prevent stress during the holidays, Brendel said.

“Making decisions and sticking to them can really avoid regret and stress after the spending happens, when the January bills start coming in,” she said.

She recommends prioritizing who gets individual gifts and organizing a gift game such as white elephant or gift pool with the rest of your loved ones. Alternatively, if you are planning to give individual gifts, she recommends allowing your family members to say which things they’d really like, since it takes the pressure and stress off of you.

If you are looking for a budget template, Microsoft Office offers a holiday spending-focused version.


There are several alternatives to spending a lot of money. They include:

— Homemade gifts

One of Brendel’s favorite homemade gifts is cocktail mason jars. You put the ingredients for a cocktail in a mason jar and the recipient just has to add water or alcohol.

This year, Lena Liu, 29, a Massachusetts-based resident physician, will give homemade bracelets to some of her friends.

“It can be really thoughtful and it actually ends up not being so expensive either,” Liu said. “They know that you put your work and your energy into designing the bracelet and getting the beads so they really appreciate that.”

— Gift cards

Gift cards can seem impersonal, but Foster argues that they are a great way to stay within your budget since you can plan out the exact amount you’re spending on each card.

— Experiences

When patients approach Karen Lynn Cassiday, managing director of the Anxiety Treatment Center of Greater Chicago, about their financial stress during the holidays, the first advice she gives is to grant experiences rather than items.

“The thing that each person most deeply needs is to be known, heard and seen,” Cassiday said. “Then doing something with them or something for them is priceless.”

You could also gift a photoshoot or framed pictures or digital albums to commemorate happy experiences.

— The gift of time

If you can’t afford to take your parents on a trip or visit them during the holidays, giving them more of your time can be a true gift, according to Eliza Menninger, medical director of the Behavioral Health Partial Hospital Program at McLean Hospital in Massachusetts.

Whether it’s planning weekly video calls with your friend group or calling your grandma every day, Menninger suggests you think of non-monetary gifts that your loved ones will appreciate.


Expectations or traditions you grew up with, such as buying expensive gifts for every member of your extended family, can cause stress during the holidays. Creating your own new traditions can help reduce it.

This year, Valentina Chavez Otero, a 22-year-old resident of Norwalk, Connecticut, is planning to celebrate the holidays by spending a day in New York City.

“I’m not very interested in celebrating Christmas, I just want to spend a day walking and seeing new things,” said Chavez Otero, who has faced economic instability since moving from Cali, Colombia, with her boyfriend.


With inflation making holiday food even more expensive than usual, one way to cut costs is making sure whoever is hosting doesn’t have to pay for the whole meal.

If your parents, grandparents, aunts or friends are hosting in their house, you could propose that everyone brings a dish, Brendel said.

“Potlucks can always be fun, and they take away the stress of preparation from one person and also reduce the cost from falling on the host,” she said. “These kinds of ideas can really reduce financial burden and stress.”


If you are having financial difficulties, it can help to talk about it with your family and friends, Brendel said.

Liu, who was diagnosed with anxiety and depression during her first year as a medical resident, now feels more comfortable talking with her family after keeping her struggles to herself for six months.

“I’m of Chinese ethnicity and, in our culture, it’s very stigmatized to talk about mental health at all,” Liu said.

Her parents and twin sister helped her through the difficult time, and her father shared that he struggled to show emotions when he was growing up and wants her generation to be able to be more open.


While your stress might stem from financial struggles, negative feelings can spill over to other aspects of your life, making it hard to enjoy the holidays.

Menninger recommends taking some time out from social gatherings and Christmas shopping to do something for yourself, such as exercising or meditating.

If you tend to forget to take a second to breathe, Menninger recommends you add an alarm in your phone as a reminder. The best times to have some time alone are between 4 p.m. and 6 p.m., she said.

For Lori Lebson, a 41-year-old mom from Massachusetts, it’s crucial to go for a run at some time during the day, even if it means waking up a bit before her children.

Chavez Otero, who has been having trouble sleeping for the last few months, watches sleeping meditations on YouTube to help her reduce anxiety. Liu’s favorite relaxing activity is doing yoga before or after a hospital shift.

Liu also practices journaling, writing down what she is grateful for in her life.

Getting enough sleep is also critical, so Menninger recommends turning off your electronics a few hours before bed.


If you are experiencing mental health struggles, there are several resources you can use to find professional help.

In the U.S., you can dial 211 to speak with a mental health expert, confidentially and for free.

Other mental health resources include:

Veterans Crisis Line: call 1-800-273-TALK (8255)

Crisis Text Line: Text the word ‘Home’ to 741-741

The Trevor Lifeline for LGBTQ Youth: 1-866-488-7386

The Trans Lifeline: 1-877-565-8860


The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Holidays can bring financial stress, here’s how to reduce it