News » Features

Holiday Price Tag: What Are the Holidays Actually Costing You?

From your finances to your health, the season can take its toll

by

comment

Amid the din of espresso machines and the crowds perusing tables brimming with handmade wares, Angel O'Brien sat quietly, a small cup of hot chocolate in hand. While much of the crowd at Nampa's Flying M Coffeegarage was searching for the perfect unique gift, O'Brien had no designs on shopping.

With the news that her job had just been cut to part-time, O'Brien was facing a new reality.

"I'm just thinking about survival, let alone figuring out Christmas," she said, a good-natured smile playing across her face.

But "survival" isn't supposed to be the benchmark for holiday success. The holidays are supposed to be a happy, joyous time filled with family, friends and frivolity­--look at all those pop culture images of sweater-clad families gathered around the fire singing carols. But for many of us, those idealized images aren't cutting it, and our celebrations are more likely to be reminiscent of National Lampoon's Christmas Vacation than It's a Wonderful Life.

Unrealistic expectations of the "perfect" holiday are what drive most of us to do things that we either shouldn't or normally wouldn't do. They are also the impetus for the true costs of the holidays--be they financial, emotional or physical.

Even in good times, the holidays--and everything that comes with them--can add up to a whole lot of stress, but these days, tight budgets, extended unemployment and an overall doom-and-gloom outlook can seem overwhelming.

While the loss of income heaped on top of the normal holiday trials might send many people into a stress spiral, O'Brien takes it all in stride.

"I should be stressed more, but I'm not," she said. "I love the holidays."

Keeping a good attitude despite the stress and pressures of life is sage advice for those who find the holidays more taxing than magical.

In the Wallet

For many, the most ominous cause of holiday stress comes when trying to figure out how to pay for all that cheer. From the social pressure to buy fantastic gifts for everyone you know, to the desire to make holiday celebrations bigger and better, Christmas often comes with a hefty price tag.

According to the Conference Board Christmas Spending Survey, the average American will spend roughly $384 on the holidays this year, up slightly from 2009. However, those of us living out West spend less on average than those living in other regions of the country: New England tops the list, where residents spend $473. Comparatively, the Mountain region spends an average of $404, with the Pacific region coming in at $343.

While that amount may be well above what you actually spend, the pressure to buy gifts can drive many to outspend their limits. Of course, those limits have drastically changed in the last few years. As the economy tanked, many Americans' habit of living on credit came back to bite them. And while recent consumer confidence indexes have shown an improvement, many have had to make some serious changes in their financial mentality.

"To state the obvious, although we might have reached the bottom of the recession, we're still in the recession," said Don Holley, visiting professor of economics at Boise State. "We're nowhere near where we were before."

Lavish spending on gifts just isn't an option for many, especially those who are unemployed. Nationally, unemployment is hovering around 10 percent, while in Idaho, the rate is roughly 9 percent. But what makes those already sobering numbers even more so is the fact that more than half of the people in that category have been out of work for more than six months. That prolonged duration of unemployment is the worst since the 1940s when records were first kept, according to Holley.

"People are unsure about their jobs and insecure in terms of their income," he added.

On top of employment shakiness, household net worth has plummeted. Between 2007 and 2009, American households lost more than $14 trillion in wealth, largely from the daunting combo of the burst of the housing bubble and the decline of the stock market.

National estimates for holiday spending projected that consumers would spend more than in 2009, and early numbers seemed to support that, although the ultimate tally won't be seen until 2011.

But Holley looks at those numbers with a grain of frugal salt and a reminder that those estimates are in comparison to a year that was a dramatic decrease from previous years.

"These are some very uncertain economic times," he said. "[Businesses] can't expect to have a record-breaking year.

"We'll spend like we spent before when our jobs and incomes are secure and our wealth is back to where it was growing at a comfortable rate."

That change in income has brought with it a whole new realization of the weight of unsecured debt, and more people aren't willing to overextend themselves like they did in the past.

Holley pointed to the fact that between 2006 and 2007, the savings rate was roughly 0 percent, and many people were using the value of their home and the stock market as savings accounts. Now national savings rates have increased to roughly 5.5 percent, a jump that Holley calls huge.

"People are assuming less debt and spending less," he said.

So what's the answer for not getting yourself into too much financial trouble when trying to make it through the holidays? How about not spending more than you can afford? Revolutionary? Not really.

Experts from across the board have been weighing in on just how best to tackle holiday spending without getting sacked by the bills. One piece of advice nearly all of them offer is to make a list of exactly who is on the gift list and how much you're going to spend on each one, and then stick to it. Additionally, try to spread your buying across the year. Or simply take the importance off gifts.

"Give more and spend less," said O'Brien of her approach to holiday gift-giving. Rather than focusing on buying material things, her family will continue its tradition of volunteering around the holidays.

"It helps put [things] in perspective," she said.

Comments

Comments are closed.