Why Parents Feel Pressure to Overspend on Holidays – TIME NextAdvisor
- November 23, 2020
- By: Greenpath Financial Wellness
TIME NextAdvisor looks at holiday spending pressures, with practical advice from GreenPath Financial Wellness.
A sense of “COVID-guilt” could be leading us to overspend this year.
After a year defined by its disruption of normal life, parents are feeling the pressure to maintain family traditions this holiday season — and the spending that comes with them.
Parents with kids under 18 are most likely to feel pressure to spend more than they can afford this year (23%), compared to parents with adult children (10%) and non-parents (15%), according to the latest survey from NextAdvisor.
“We feel bad that our kids have been cooped up in the house all year or that we’ve had to do away with some of the usual traditions like summer camp and vacations,” says Farnoosh Torabi, contributing editor at NextAdvisor. “The holidays may feel like the final chance to make 2020 feel like it wasn’t a total bummer — especially for our kids who missed out on the normal childhood experiences.”
More broadly, Americans are responding to this unusual holiday season by reining in their spending, and rethinking the financial tradeoffs they’re willing to make to keep up traditions. Overall, 39% of Americans are planning to spend less on holiday shopping this year and 66% of shoppers do not intend to rack up credit card balances because of their holiday purchases.
FIGURING OUT YOUR HOLIDAY FINANCES?
It’s a holiday season like no other, with pandemic-related changes in income and other uncertainties. Let’s start a conversation about reducing financial stress not just for the holidays, but for your future.
Holiday spending pressures are not just affecting parents. Young people are twice as likely as older age groups to feel pressure to overspend. Twenty-eight percent of respondents ages 18-34 felt pressure, while just 10% of those 35 and older reported the same.
Overcoming that pressure starts with establishing boundaries. Take time now to determine your own financial limitations and where your spending values lie this season. Factor for your monthly costs — debts, rent, groceries, etc. — as well as contributions to savings or retirement to help set a budget.
Nearly a quarter (22%) of Americans are already expecting they’ll carry debt into the new year due to holiday shopping. An additional 12% aren’t yet sure whether their shopping will result in credit card debt heading into 2021.
It’s important to get ahead of debt, Torabi says. “If you need to scale back spending this season, do it … unapologetically. Talk to your family and close friends about it. Surely you’re not the only one who wants to save.”
Set your spending limits, and then stick to them, says Dusti Young, partner relations specialist at GreenPath Financial Wellness. Plan your purchases and stay away from impulse buys.
And if you’re working on debt payoff or other financial goals, don’t let the holidays derail your progress. You want to make those goals top of mind. “List out all of your spending, keep track of what you have coming in and what you have going out,” Young says. “Make sure you continue that system of paying your expenses on time and focus on paying off your debt.”
How You Can Save This Season
Whether you’re feeling pressure to keep up normal holiday traditions, or you’re worried about taking on debt going into the new year, planning ahead can help you enjoy the season without financial regrets.
“I think a lot of people feel guilt around spending, and they feel like they have to buy gifts or they have to host a party,” Young says. “One of the things we have learned through this pandemic is that it’s more about connection. You just want to be able to spend time with people, you want to be with the people who mean the most to you, and that doesn’t require money.”
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