Whether it’s due to a lack of money or a lack of creativity, holiday budgets easily get stretched. During the 2021 holiday season, consumers plan to spend an average of $998 per person, according to the National Retail Federation.

Given that such a high amount can wreak havoc on budgets, how can you know what you should be spending? How can you shop for the holidays without breaking the bank? Here’s what you need to know.

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Know How Much to Spend

Before you whip out your wallet, ask yourself: How much have you spent this year?

If you’ve done a great job all year navigating the money cycle, then let the end of the year be a celebration of your accomplishments. If you’ve been able to stick to your budget so far, the holiday season should make you proud.

Contrary to D.H. Lawrence’s poem “Money Madness,” money doesn’t bring with it a cruel game of win or lose. That is, unless we let it.

In typical years, many people travel, take unpaid-time off work, eat out more often, buy gifts, and party as the year winds down, though Covid-19 has put a damper on those plans. All of these activities can subtract from a person’s bottom line, and many of them are understandably discouraged this year.

One way to justify holiday budget adjustments is by determining whether they also add to your quality of life.

During the holiday season, we often allow money and people to bring us to our knees in shame if we can’t keep up with the Joneses. It’s our responsibility to counteract this pressure with peace. Otherwise, we can feel not just money madness, but also money sadness.

How to Avoid Fear of Missing Out

This Holiday Season

Financial coach, public speaker, and entrepreneur Karen Ford provides insight into how to silence that money-spending voice in the back of your head.

  • The first thing to do is tell yourself that you don’t have to keep up, but that you’ll purchase gifts for the folks who matter.
  • Make a list of the people you plan on giving gifts to, and beside each name write the amount that you plan to spend on that person.
  • Now, add up the total amount. That’s your holiday budget.
  • Divide that amount by how many weeks are left until next Christmas. That’s how much you need to save each week.
  • Both brick-and-mortar stores and online retailers have deals right before Christmas as well as online. Take advantage of them.
  • Let the fun begin.

Keep in mind that this is a time of giving and love. The amount you spend on each person doesn’t reflect how much you love them. The act of giving a gift at all shows that you care.

Don’t Stress the Small Stuff

More than six in 10 Americans — 61 percent of the country — would prefer cash to presents, according to a study by Intuit, so theres no need to spend time stressing over which expensive gift your loved one would prefer.

Take comfort in the fact that if gift shopping stresses you out mentally or financially (or both), you’re definitely not alone.

Plus, 21 percent of people prefer spending time with friends and family during the holidays, rather than gift-giving, according to a survey by Coinstar.

A further 35 percent are riddled with anxiety over Secret Santa office gift exchanges, feeling pressured by the expectations involved, according to the same survey.

By focusing on the big picture — the family and friends that are with you during the holidays — you can avoid some of the stress that comes with this time of year. Talk to your loved ones and see if you can’t all agree that the gift-giving tradition is more of a hassle than it’s worth. Giving the gift of your time and affection can be more than enough.

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Keep an Eye on Your Holiday Budget

Conquering holiday money madness starts with creating a personal standard, budget, and purpose. Reducing stress and anxiety comes down to taking control with one hand and letting go with the other.

Take control of your holiday budget, your emotions, and your time. Let go of shame, expectations, and pressure to perform or conform. Instead, do the best with what you have. Be creative and passionate, and others will reciprocate.

If you find yourself struggling to find gifts, know that your family will appreciate a thoughtful, personal gift more than they will an expensive one, so don’t feel pressured to spend on gifts you can’t afford.

Shop Early and Carefully

Actions like early shopping for food and gifts, clipping coupons ahead of time, and saying no when that is the best answer are good ways to keep money issues and other stressors in line. You can also use tools like PocketSmith and Digit to help set your holiday budget and save up money.

Keeping an ongoing list of to-dos and checking them off as completed tasks can help you feel productive rather than overwhelmed.

Also, if you can, try to pay in cash when shopping for the holidays. While it can be easy to go over your budget when using a credit card, it is much more difficult when you can physically see the money disappearing as you shop.

Lastly, remember everything that has to get done does not have to get done by you.

Delegate tasks to loved ones and take the madness out of your holiday budget and your brain.

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The Bottom Line on Holiday Budgets

Understanding that there is only so much that you can control is a powerful and peaceful way to approach the season. Letting go of expectations reduces stress and anxiety, and also lessens your disappointment.

On the other hand, there are things that can’t happen without proper planning and execution. Finding that balance is where peace lies.

Additional reporting by Kelly Meehan Brown.