The holiday season often brings joy, but it can also bring financial stress. Here’s how to approach Christmas with a more balanced financial mindset and reduce stress.
The Impact of Financial Stress
Financial stress during Christmas can be overwhelming. A study on sugarcane farmers found that preoccupation with money problems can cause a decline in cognitive function equivalent to a 13-point drop in IQ or losing an entire night’s sleep. This phenomenon is often referred to as the “poverty mindset.”
Three Steps to Financial Peace
1. Adopt a Grateful Mindset
Instead of striving for an “abundance mindset,” focus on gratitude. Take time to appreciate what you have:
- Friends and family
- Your job
- Small blessings in life
For those who find gratitude challenging, start small. Even a tiny seed of gratitude can grow into something wonderful. As a Christian himself, Elson reads passages in the Bible like Psalms 23 when he feels the stress.
2. Prioritize What’s Important
Have honest conversations about your priorities:
- List your financial priorities
- Review your budget
- Evaluate expenses like dining out and streaming subscriptions
Remember, marketing aims to create perceived needs. Ask yourself: “Is this a want or a need?”
3. Practice Giving
Christmas is about giving, but give within your means. Start small, even with just 0.1% or 1% of your income. People who actively give often develop good financial habits over time. They understand that giving is a choice, not an obligation, and it helps prevent money from becoming a controlling force in their lives.
The Relationship Between Money and Happiness
A 2010 study found that for salaries above $75,000 (equivalent to about $100,000 today), happiness starts to decline. While higher income may improve life evaluation, it doesn’t necessarily correlate with emotional well-being. In fact, more money often brings more stress and concerns.
Practical Tips for a Financially Stress-Free Christmas
- Start a Christmas savings bucket early in the year
- Use an offset account if you have a mortgage
- Set a clear spending limit for Christmas
- Avoid buy-now-pay-later schemes
- Initiate family conversations about what’s truly important
- Question the necessity of traditional expenses like festive socks or excessive alcohol
Remember, the true spirit of Christmas isn’t about how much you spend. By focusing on gratitude, prioritising what’s important, and giving within your means, you can enjoy a more meaningful and less stressful holiday season.