3 ways to have a financially healthy holiday

With travel, presents and parties to attend, it's easy to overspend during December. While you may feel pressured to visit the whole family and stuff every stocking, the worst gift you can give yourself for the holidays is debt, which will turn into chronic financial stress as you work to pay it off throughout the year.

Here’s how one financial expert suggests tackling holiday spending.

1. Budget for holiday expenses like you would any other bills.

The holidays come around every year, so treat them as a recurring expense just like you would a car payment or mortgage.

“When building your household budget, plan to set aside a certain amount each month or paycheck for holiday shopping,” said Zachary Benscoter, budget manager for Baptist Health. “If you put $20 from each paycheck into your savings account and you’re paid 26 times per year, that’s $520. Build your budget to see if you’ll have enough to cover your expenses, and then decide how much money you’d like to try to save.”

If you made the naughty list for not budgeting this year, simply track what you do spend so you can budget appropriately next year.

“If you didn’t have a budget this year, determine how much you spent on travel and gifts, and how much you’d be comfortable spending next year,” said Benscoter. “Take that amount and divide it by the total number of paychecks you get per year so you know how much you need to save.”

2. Make a list; check it twice.                                             

Benscoter says he doesn’t enter a store without a plan, which can lead to browsing and overbuying.

“I decide who I want to spend money on — and who I want to spend the most money on — to determine how much I’ll be spending in the holiday season,” he said. “Obviously kids in the family may be more expensive. But it starts with setting aside money for each person I want to buy gifts for and sticking to that amount.”

If you decide on specific items to purchase your loved ones rather than setting a price limit, there are still ways to save money.

“Say you’re looking for ways to get money back. You can access sites like Ebates, and certain banks offer cash-back rewards you just have to activate online. Log in to your account for a list of various retailers where, if you make a purchase at that retailer with that card, you get a certain percentage back,” he said.

3. If you didn’t budget, don’t go into debt.

While the holidays feel like the time to give, give, give, don’t allow gifting or travel costs to send you into debt.

“If you’re looking for cash around Christmas, one thing you can do is look around your house for items you don’t really use anymore,” said Benscoter. “There are a lot of online resale apps and marketplaces, like on Facebook or OfferUp, which let you sell your things online. This is finding money versus going into debt.”

His biggest piece of advice: be honest with those around you. Most people feel financial stress at this time of year, and by agreeing to no gifts, you may grant everyone some peace of mind.

“There’s no shame in not buying Christmas gifts for people,” he said. “It’s not worth going into debt or taking on a financial burden if you can’t afford it, and there’s no shame in that because, most likely, everyone has been there at some point.”

If the holidays are a source of distress for you, consider using physician-recommended anxiety management techniques to minimize stress.