Yahoo Finance How To Financially Survive the Holidays When You Live Paycheck to Paycheck
Hanging by a financial thread is more common than you think — and not just for low-income earners.
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According to a new survey by GOBankingRates, of 1,039 Americans aged 18 and older, 49.18% of respondents of all ages and genders said they are living paycheck to paycheck.
The holidays make this especially tough as the pressure to buy gifts and host parties mounts.
How People Are Struggling
When we break down the survey data by gender, more women than men are struggling in this way, at 51.36% to men’s 45.91%.
Interestingly, though you’d imagine that older adults would be more stable than younger adults, the 18-24-year-old set and the 65 and older set are actually the least of those struggling to make it until their next paycheck.
It’s the 35-44-year-old age group and the 45-54-year-old age group struggling the most at 58.42% and 57.05% respectively. Of all survey respondents, 18.86% said they were doing “significantly worse” financially than last year.
Given these stark numbers, GoBankingRates spoke to experts about some tips to financially survive the holidays when you’re living paycheck to paycheck:
Budget Wisely
If you’re living paycheck to paycheck, you probably know exactly how your money is allotted (unless part of the problem is that you’re not paying attention and overspending). Either way, making a holiday budget, no matter how minimal, will ensure you don’t overspend, said Jeff Mains, a financial expert and CEO of Champion Leadership Group LLC.
“Set a realistic budget for gifts, meals and festivities, and stick to it,” Mains said. “Consider homemade gifts or thoughtful gestures that don’t cost much but hold significant sentimental value.”
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Track Your Spending
Once you have a budget, stick to it as best you can. It can be helpful to track your spending, according to Liz Hunter, a finance expert at Money Expert, which she said could include “[S]etting up a spreadsheet or using a spending pot that many banks now provide their customers to make sure you’re not going over your budget.”
Tis the Season for Coupons
Additionally, Mains urges you to take advantage of discounts, coupons and cashback offers while shopping to stretch your budget further.
Prioritize Experiences Over Things
The essence of the holidays often lies in spending quality time with loved ones rather than lavish gifts, Main pointed out. So, instead of buying gifts, he recommended “Host potluck dinners or organize game nights, creating memorable moments without spending excessively.”
Other things to do can include exploring free or low-cost local events and activities offered during the holiday season. “These can add joy and festivity to your celebrations without straining your finances,” he said.
Make Agreements
Most likely friends and family will understand if your budget is tight, according to Rachael Burns, a CFP and certified divorce financial analyst with True Worth Financial Planning. She suggested, “Make a no-gift pact with friends or family members with whom you usually exchange gifts.”
If you really do want to give gifts, she recommended you set a dollar limit on family gift exchanges, or agree to give only handmade or secondhand items.
Stock Up
Holiday gifts don’t need to be purchased in one fell swoop, Burns said. “If possible, stock up on gifts throughout the year so you can spread out your spending across several months and take advantage of mid-year sales.”
Think Before You Splurge
If you’re a generous person, it’s easy to give in to the urge to shop first and think about your debts later. Burns cautioned, “Don’t let generosity overpower common sense. If a particular item is not affordable, don’t splurge just because it’s a gift.”
This can also mean buying your kids fewer gifts, she said. “You may initially get some pushback, but getting your kids accustomed to receiving fewer gifts will help them focus on the non-material aspects of the holidays.”
Shop Around and Compare Prices
Don’t leave your shopping to chance, stopping at the first place that catches your eye, suggested Hunter. “When it’s time to tackle the [holiday] shopping, don’t just settle for the first gift you see, take your time and shop around by comparing prices to make sure you’re getting the best deal,” she urged.
Additionally, consider buying gifts online, as there are often better deals available there than in stores.
Shop Early
Early shoppers are also likely to get better deals, Hunter said. “The earlier you start shopping, the more time you have to find the best deals and avoid the last-minute rush.”
If you’re buying gifts online, it’s especially important to factor in shipping time, as some retailers have cut off dates and might also increase shipping prices the closer to the holidays you get.
“You may also be able to cut back on delivery costs by shopping ahead of time and therefore taking advantage of free delivery, rather than having to pay for express shipping,” Hunter added.
Make Your Own Gifts
Handmade gifts can be both personal and cost-effective, said Josh Michaels, a financial advisor with Money4Loans. “Utilize your skills in baking, crafting, or art to create thoughtful presents,” he suggested.
Take advantage of stores like Dollar Tree or Dollar General to buy affordable supplies. A beautiful frame with a memorable photo, or a thoughtful decoration for a home can have a great impact.
Gift Exchanges
Instead of purchasing gifts for a large number of people, Michaels recommended, “Implement a Secret Santa or gift exchange system within your family or friend group.”
Not only does this reduce the number of gifts you need to buy, it allows you to put more thought into the gift you do purchase.
Overall, focus on finding joy in good company, limiting impulse shopping and make memories instead of just giving in to consumerism.
Methodology: GOBankingRates surveyed 1,039 Americans aged 18 and older from across the country between November 9 and November 13, 2023, asking nineteen different questions: (1) How much do you plan to spend on flights/hotels this holiday season?; (2) How much did you spend on flights/hotels last holiday season?; (3) Are you taking any of the following steps to save money on travel?; (4) How much do you plan to spend on holiday shopping?; (5) How much did you spend on holiday shopping last year?; (6) How would you compare your overall financial situation this holiday season to last holiday season?; (7) How much do you plan to donate this holiday season?; (8) How much credit card debt do you have right now?; (9) How much credit card debt have you added in the past six months?; (10) What is the minimum salary that would allow you to live comfortably in 2024?; (11) How concerned are you about layoffs?; (12) Do you live paycheck to paycheck?; (13) What do you believe is the likelihood of a recession in the next year?; (14) How much do you plan to spend on your next house?; (15) What is the highest mortgage rate you would be willing to pay for your next house?; (16) How much do you think mortgage rates will fall over the next year?; (17) Have you relocated to a different state in the past two years to find more affordable housing?; (18) Which of these states would you consider relocating to for more affordable housing?; and (19) What percent of your take home (after taxes) pay do you spend on your mortgage (or rent)?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: How To Financially Survive the Holidays When You Live Paycheck to Paycheck
