It’s the most wonderful time of the year — unless you’re one of the 48% of consumers dreading the price tag that comes with holiday shopping, that is.
A new survey from Lending Tree found that nearly half of consumers are filled with more holiday fear than cheer due to the anticipated costs of making merry this year — especially since many Americans are still dealing with the financial fallout from the COVID-19 pandemic.
And the gift-giving pressure is high, with 40% of people in the survey feeling obligated to purchase a present for at least one person.
In fact, stress levels are so high that nearly a quarter of respondents said they’re losing sleep over how they’ll pay for the holiday season’s gifts and festivities. And that number jumps to 36% of parents with children under 18.
Worse, as holiday shopping kicks into full gear, 13% of consumers are still paying off the debt that they racked up during the 2020 holiday season. And 41% expect to go into debt over holiday spending this year.
That could be because people are trying to make the holidays extra bright during what’s been a rather dark couple of years.
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“An awful lot of people are willing to go a little bit overboard in big occasions to make up for just how crummy the last year and a half has been,” Matt Schulz, chief industry analyst at Lending Tree, told MarketWatch.
“And when you consider how expensive the holiday shopping season is anyway, the idea of people going overboard to kind of make themselves feel a little better is scary,” he said. “Then you factor in inflation, and it makes it an even scarier proposition for a lot of consumers.”
And that inflation is expected to last through at least the end of the year.
Read more: Americans will have to get used to high inflation at least until the end of 2021
But Schulz has some tips on how to keep from ending up in even more debt this holiday season.
The biggest thing you can do to stay out of debt is to set a holiday budget and stick to it, he said. That may sound obvious, sure, but it’s still crucial.
And impulse buys can really get you into trouble and blow your budget, so “give a little forethought before you go out shopping, [and] have an idea for what you are looking to buy,” Schulz said. In other words, make a list, check it twice — and stick to it.
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Another tip, which might seem counterintuitive, is to open a new credit card for your holiday spending, Schulz said.
“The truth is that a lot of cards come with cashback sign-up bonuses of $100 or more,” he said. “And if you use them wisely, and pay that balance off at the end of every month, that extra $100, $250 can really be impactful to your holiday budget.”
Of course, you can always get creative with your gift-giving to save some dough. Homemade gifts, or giving low-cost, sentimental items, can be more memorable than the latest tech gadget it seems like “everyone” is getting, after all.
Lastly, communication is key. Let your family and loved ones know if your money is going to be a little tighter this year, Schulz said.
“We’ve all been through these past two years. We all know that things have been difficult,” he said.
“Chances are you’re going to feel kind of awkward having that conversation,” he added. “But chances are your friends [and] your family members aren’t going to mind. They’re going to understand — even your kids, if you’re open and honest with them about what’s going on.”