After nearly two years of living through a global pandemic, those celebrating the holidays — and especially those gathering in person with loved ones — know there’s a lot to be grateful for. But if your wallet has taken a hit, the extra expenses of the seasons can be concerning.
And economic figures would suggest many of our pocketbooks have indeed been squeezed.
Unemployment is higher than pre-pandemic levels, according to the U.S. Bureau of Labor Statistics (BLS). Inflation is surging at a pace not seen since 1990, also according to the BLS. And more than 1 in 4 adults are struggling to cover basic expenses, according to a November 2021 report from the nonpartisan research and policy institute Center on Budget and Policy Priorities.One in six renters are behind on rent, 1 in 13 homeowners are behind on mortgage payments, and nearly 1 in 8 adults with young children struggle to buy groceries, the report found.
“Inflation is making prices go through the roof,” says financial psychotherapist Alex Melkumian, PsyD, a licensed marriage and family therapist and founder of the Financial Psychology Center in Los Angeles.
It’s a problem for all types of earners. Regardless of income bracket, the current financial landscape is making what’s considered “normal” now feel out of reach for many people, Dr. Melkumian says. “Everyone is having to scale down.”
And that scaling down can definitely take its toll on mental health, especially when it comes to the “most wonderful time of the year.” A lot of us have high expectations when it comes to the holidays. If you have to cut back on gift-giving or other seasonal festivities, Melkumian says: “This may bring up feelings of shortcomings and being ‘less than.’”
There may not be an easy fix for inflation or low wages. But according to Melkumian: “It helps to pause and understand that the whole world is going through it.”
Here’s more on why you might be feeling so stung by the current economic realities and how to cope.
COVID-19 Uncertainties Make Money Worries Worse
Money stress is no new phenomenon. U.S. adults ranked it as the biggest source of stress in pre-pandemic times, according to a 2015 report from the American Psychological Association (APA). More than 1 in 4 adults said then that they felt stressed about money all or most of the time.
But money stress has become more acute for many during the pandemic. Income loss and concern about financial security have been associated with increased depression, regardless of how much money people made before the pandemic or their level of anxiety related to the coronavirus itself, according to a study published in August 2021 in the Journal of Affective Disorders.
That research suggests it’s not only income loss or financial hits that cause financial stress; worrying about potential financial hardships causes stress, too.
Uncertainty around the course of the pandemic and the future of the job market can certainly trigger anxiety, says Megan McCoyMegan McCoy, PhD, a licensed marriage and family therapist and personal financial planning professor at Kansas State University, who researches the relationship between financial planning and mental health.
“Unfortunately, despite advancements with COVID-19 treatments and vaccines, we still do not know when the pandemic will truly be behind us,” Dr. McCoy says.
Money Trouble at the Holidays Delivers a Unique Sting
For many of us, gift-giving is a way of reinforcing social ties with friends and family. We can feel a deep sense of shame when we’re not able to give gifts or feel upset if we don’t receive gifts from people we’re close to who we’ve
exchanged gifts with in the past, says Ed Coambs, a certified financial planner and financial marriage and family therapist who is the author of
The Healthy Love and Money Way, and has developed financial psychology courses for couples and individuals.
“When we are wrestling with shame, we are wrestling with our sense of acceptability,” Coambs says. We fear that our relationships with loved ones will be damaged if gifts aren’t exchanged, and our sense of shame only increases when we can’t afford to give a gift that seems big enough to express how much we value the relationship.
On the flip side, we can also feel like our relationship isn’t valued if we don’t receive a gift or receive a gift that’s smaller than we expected, Coambs says.
Some people see money as a magic salve for emotional distress. So when they don’t have the funds to create the perfect holiday experience (whether it’s buying gifts or other goodies of the season), they feel distressed instead of appreciating the potential to celebrate in less expensive ways, McCoy adds.
Others equate their net worth with their self-worth, and feel any inability to afford holiday activities is a personal failure rather than a temporary financial setback, McCoy says.
In other instances, people may feel so anxious about the potential for their finances to take a turn for the worse that they cut spending too drastically and miss out on opportunities to connect with friends and family.
Especially because so many of us missed seeing family or exchanging presents because of the pandemic last year, we’re putting even more pressure on ourselves to make the holidays and our gift-giving special this year, says Debra L. Kaplan, a licensed professional counselor and financial therapist based in Tucson, Arizona.
“The feeling of ‘not enough-ness’ is prevalent for many this year. It’s as if people need to make up for lost opportunities to show love and affection,” she says. “And the holidays are already rife with emotions and family expectations.”
Tips for Coping With Financial Stress This Holiday Season
You may not be able to change your financial circumstances in time for the holidays, but there is a lot you can do to manage the stress you may feel around your spending this time of year, financial therapists say. Some things include:
- Watch out for avoidant behavior when it comes to money trouble. Refusing to take about money or open bills this time of year will only make your holiday financial stress feel worse, McCoy says.
- Reflect on (and talk about) past experiences about unmet gift expectations. Talking to someone about how you’ve felt in the past when you couldn’t give gifts or you didn’t receive gifts can help you build “financial
empathy” into your relationships, Coambs says. - Set boundaries to limit financial stress. Don’t be afraid to limit gifts you will give and what celebrations you will join this year if you can’t afford to do as much as you might like, Kaplan says. Consider how to
reinvent how you celebrate to save money. - Focus on experiences not things. Think outside the box and try a gift-making party, bake things for people, or throw a potluck instead of hosting a huge meal and footing the entire bill yourself, Melkumian suggests.