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5 Steps for Millennials to Set Financial Boundaries this Holiday Season

52% of Americans surveyed by NerdWallet in 2023 reported incurring credit card debt while purchasing holiday gifts the previous year; 31% of these individuals have yet to repay the debt.

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5 Steps for Millennials to Set Financial Boundaries: For some, holiday gift-giving culture, marketing advertisements, and family gatherings can make it impossible to refrain from spending, if not overspending. 52% of Americans surveyed by NerdWallet in 2023 reported incurring credit card debt while purchasing holiday gifts the previous year; 31% of these individuals have yet to repay the debt.

Although philanthropy may be admirable, it is prudent to establish limits on lending and spending money throughout the holiday season.

5 Steps for Millennials to Set Financial Bound

1. Develop your goals

Without a valid reason, it can be difficult to rein in your expenditures during the holidays. Commence the process of outlining your financial objectives for 2024 in order to prevent spending with shortsightedness. For example, if you intend to save for a down payment on a new automobile the following year or make larger payments on your student loan, overspending during the holidays could be detrimental.

“Be brutally honest about your financial obligations for the months of January and February,” advises Yvette Murry, a clinical social worker specializing in financial wellness who resides in Princeton, New Jersey.

Beginning your budget for 2024 in advance can help you avoid regret and unnecessary debt come the following year.

2. Put into practice declining requests.

There may be an increase in requests for loans during this time of year, when prices are already elevated. Giving cash to everyone who requests it may make you feel like Santa Claus, but it could place you in a financial bind come the following year.

“All too frequently, we find ourselves in situations that are not in our best interests, the best interests of our families, or our mental health because we do as others desire,” murry asserts.

If requests exceed your capacity, be ready to decline them. Assisting individuals lacking proficiency in the word ‘no,’ certified financial therapist and psychologist Traci Williams, based in Atlanta, Georgia, offers an illustrative instance of its usage.

“You may express gratitude in the following manner: ‘I appreciate your thoughtful consideration of me during the process of organizing this.'” “I am unable to do it due to financial constraints,” Williams explains. “A brief and straightforward statement such as that can aid in maintaining the relationship.”

Incorporate a “lending bucket” into your budget, consisting of a sum that does not significantly disrupt your financial situation. Additionally, you should only lend money that you are able to repay.

3. Recognize that it is acceptable to feel guilty

Declining certain requests, such as extravagant gifts for one’s companion, traveling to visit family, or making financial commitments, can induce feelings of guilt. We may experience remorse when we say no, according to Williams, because of the expectations that society, family, and ourselves have of us.

“One is less likely to experience guilt if they are able to identify and adhere to their true values and what is truly significant to them,” she advises.

Before attempting to confront these challenging emotions, Williams advises identifying them.

“Many individuals feel things without being cognizant of their emotions,” she explains. She further states that after identifying the emotion, one can combat it by reinforcing the rationale behind the decision. For example, if you find yourself unable to purchase gifts this year, bear in mind the significance of establishing one’s financial stability.

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4. Get You Inspiratons right regarding you spending

It is possible that numerous financial behaviors, including those observed during the holiday season, are influenced by subconscious motivations or beliefs. In order to gain insight into one’s financial decision-making process, Murry proposes engaging in introspection regarding the motivations underlying expenditures or loans to others.

“Am I attempting to rectify an error? Am I attempting to satisfy a desire that originated during my childhood? “Inquire, ‘Why am I making those decisions?'” advises her.

By comprehending the underlying incentives that drive your expenditures, you can strengthen your control over your finances and potentially develop fresh financial convictions that are founded on ideals you aspire to emulate. As an illustration, should you come to the realization that your excessive expenditure on gifts stems from your parents’ insistence that gifts are the epitome of affection, you might come to the conclusion that more valuable contributions are time or love in nature.

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5. Remember that holiday pressure is normal

The actual strain of the holiday season can lead to budget overruns. Recognizing the typical nature of holiday pressure can assist you in maintaining concentration and adhering to your financial plan. Williams emphasizes the importance of not expecting oneself to accomplish everything, as doing so would be impractical.

“Being aware of the pressure that is present and the effective functioning of marketing can serve as a reminder that you must remain focused on your individual objectives,” she advises.

The Associated Press received this column through the personal finance website NerdWallet. Elizabeth Ayoola is a NerdWallet writer. You can reach [email protected] via email.

The NerdWallet survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Aug. 17-21, 2023, among 2,069 U.S. adults ages 18 and older, among whom 1,762 plan to purchase gifts this holiday season. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.7 percentage points using a 95% confidence level.

“Holiday season” refers to the period from Aug. 17 to the end of 2023.

We used U.S. Census population estimates and survey responses to calculate the total number of Americans who plan to buy gifts this holiday season, as well as the total gift spending and the total gift spending charged to credit cards.


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