The holiday season is a time for togetherness, family, and joy. However, it can also bring about financial stress, with significant expenses for gifts, food, and bills piling up before January. How can one avoid the most common financial pitfalls during the holiday season?
According to Nordea’s private economist, Anders Stenkrona, planning is key. Be proactive, carefully plan your purchases, and shop online to find the best prices.
“And if you can’t put in the time and effort – then you’ll pay the price for it.”
Setting aside a portion of your savings in an “inaccessible account” now is the best way to avoid the financial hit during what is colloquially known as the year’s poorest month.
Adjust Expectations
Stenkrona advises discussing the family’s expectations for the holiday season.
“Sit down together and talk about what you really want to get out of Christmas. Maybe no one even likes Brussels sprouts? Then you can skip them,” he says, adding:
“It’s about adjusting expectations based on what actually matters, rather than striving for a ‘perfect’ Christmas.”
Reduce Consumption
A common mistake is buying too many and too expensive gifts.
“Think about what will matter the most in a year? What will my children remember? What will I remember, what will be most important?”
Avoid Credit
According to a survey by Nordnet, one-third of small families with children have at some point taken out a loan to afford Christmas. It often involves consumer loans, something Stenkrona strongly advises against.
“That bill comes in January. And then you’re there, after all the Christmas expenses, plus a big fat bill to deal with in January.”
Stenkrona concludes with a reminder:
“At the end of the day, the best Christmases don’t have to be the most expensive.”
Ultimately, it’s important to prioritize what truly matters during the holiday season and to avoid unnecessary financial strain. By planning ahead, adjusting expectations, and being mindful of spending, you can enjoy a fulfilling and stress-free holiday season without breaking the bank.