5 steps to creating financial boundaries during the holidays

By ELIZABETH AYOOLA

Associated Press

Dec. 2, 2023 3 AM PT

Marketing ads, family functions and the holiday gift-giving culture can make it feel impossible not to spend, or for some, overspend. According to a 2023 survey from NerdWallet, 52% of Americans incurred credit card debt when shopping for gifts during the holidays last year, and 31% of them still haven’t paid it off.

Consider setting boundaries when it comes to lending and spending money during the holidays.

Set 2024 money goals

It can be difficult to rein in your spending during the holidays if you don’t have a reason. Begin the process of mapping out your financial goals for 2024 to help avoid shortsightedness while spending. For instance, if you want to make larger payments on your student loan or save for a down payment on a new car next year, overspending during the holidays could set you back.

“Really be brutally honest about what your financial commitments for January and February [are],” said Yvette Murry, a clinical social worker in Princeton, N.J., who helps clients with financial wellness.

Starting your 2024 budget now can help prevent both unwanted debt and regret come the new year.

Practice saying ‘no’ to requests

Prices are high, and requests to borrow money this time of the year might be too. As much as you may feel obligated to play Santa and give cash to everyone who asks, it could put you in a financial bind come the new year.

“Too often we do what others want us to do and then find ourselves in a position that really is not best for us or for our families or our mental health,” Murry said.

When you do get requests beyond your capacity, prepare to say no. For those who aren’t well-versed in ‘no,’ Traci Williams, a certified financial therapist and psychologist in Atlanta, provides an example of how to say it.

“You can say something along the lines of, ‘Thank you so much for thinking of me when you’re planning this. I am unable to do it because it’s outside of my budget,’” Williams said. “Something that is simple and short like that can help to preserve the relationship.”

Consider including a “lending bucket” in your budget, which consists of an amount that doesn’t throw your finances off. You may also want to stick to only lending what you can afford not to get back.

Understand it’s OK to feel guilty

Guilt can come when you say no, whether that’s to requests for money, traveling to see family or buying your partner an expensive gift. When we say no, we may feel guilt because of expectations from ourselves, family and society, Williams said.

“If you can tune in to what actually is important to you, what your actual values are, and you can hold firm to those, you’re less likely to feel guilt,” she said.

To deal with those difficult feelings, Williams suggested first identifying them.

“A lot of people feel things and don’t realize what the actual feeling is,” she said. Once you name the feeling, you can counter it by reinforcing why you made that decision. For instance, if you have to say no to buying gifts this year, remember the importance of creating financial stability for yourself.

Explore your spending motivations

Many of our money habits may be driven by subconscious beliefs or motivations, even during the holidays. To understand why you’re making certain financial decisions, Murry suggested asking yourself the motivation behind lending someone money or spending.

“Am I seeking to right a wrong? Am I seeking to fulfill a need I had as a child? Ask, ‘Why I am making those decisions?’” she said.

Understanding your motivations for spending can help you reinforce boundaries and potentially establish new money beliefs rooted in values you want to emulate. For example, if you realize you overspend on gifts because you were taught by your parents that gifts are the best way to show love, you may decide giving intangible gifts of time or love are more important to you.

Remember holiday pressure is normal

Holiday pressure is real and it can cause us to exceed our budgets. Acknowledging that holiday pressure is normal can help you stay focused and within your budget. Williams said to remember you don’t have to do everything, and expecting that of yourself is unrealistic.

“Recognizing that that pressure exists and that marketing is doing its job can help you to remember that you have to stick to your own goals,” she said.

Ayoola writes for financial services website NerdWallet. This article was distributed by the Associated Press.