Financial worries can affect our mental health at the best of times, but festive spending can have a particularly negative impact. The thought of how much Christmas might cost can feel overwhelming.
We consider how Christmas can have an impact on your finances and how this affects your mental health, as well as ways to ease the burden.
Mental health
Each year, one in four people in England will experience some sort of mental health problem. Mental health problems can be caused by many different things, including loneliness, past trauma, poverty and long periods of stress.
Sarah Murphy, Senior Health Lead at the Money and Pensions Service (MaPS), explains why Christmas can put extra strain on our mental health: “It’s a stressful time, from the pressure to spend money and time with family to the loneliness that some people experience.”
Money worries at Christmas
With the pressure to spend on presents and parties, the festive season will no doubt affect our finances. In 2020, the Bank of England found that UK households spend over £700 more than usual in the month before Christmas.
This year’s festivities threaten to be costlier than before, with the rising cost of living pushing up prices of essential goods and services.
So the possibility of increased spending over Christmas threatens already squeezed budgets.
How can money affect our mental health at Christmas?
Money problems can cause guilt or anxiety. At Christmas, thinking about your finances can be stressful, especially if you have seen an increase in your spending but a decrease in your income this year.
Each year, you may feel pressure to make this Christmas better than ever. However, trying to live up to such high expectations can pose a threat to both your finances and your mental health.
Research from the debt charity StepChange in December 2022 found that concerningly, a quarter of survey respondents (25%) felt they would struggle to afford Christmas. What’s more, almost a third of people (30%) were planning on cutting back on everyday spending to fund the festive season.
Even the thought of financial strain can harm your mental health, potentially leaving you stressed or anxious about how to afford Christmas without overspending or getting into debt.
The season can hit those who already experience mental health issues even harder. Over four-fifths (86%) of people with mental health issues say that their finances had made their problems worse, according to research from the independent charity Money and Mental Health Policy Institute.
5 ways to cope with money and mental health this Christmas
The financial and mental burden of Christmas can be difficult to deal with, so looking after your mind and money is crucial. Ways to do this include cutting back on spending, setting a budget, and reaching out for support if you need it.
Feel comfortable saying no
Saying ‘yes’ to everything can put unnecessary strain on your finances during the festive season, as you stress about where the money for everything will come from.
Choosing to only buy presents for those closest to you or deciding to cut down on socialising could save you money and help with financial anxiety.
Work out your budget
Creating a budget that sets out how much you want to spend at Christmas can help you keep in control of your finances and avoid Christmas spending turning into New Year debt. There are many free planners online that you can use to track your spending.
Be realistic about what you can afford
Retailers have made it easier than ever to buy expensive gifts throughout the festive season, with many now offering Buy Now, Pay Later (BNPL) options automatically at the checkout. BNPL schemes come with high interest rates and can harm your credit score if you miss repayments. It may seem tempting to put off paying for presents, but you can end up spending more than you can afford this way.
Be realistic and make sure you can afford what you buy. Stick to the budget you have created; consider cutting back on some presents; and only buy items on credit if you know you will be able to afford the repayments.
Try buying secondhand
Another way to limit your spending is to think about how you can go secondhand this Christmas, saving you money as well as helping the planet.
Regifting – giving someone a previously unwanted present – can work too, but be careful not to give something back to the person who gave it to you!
Talk to someone
If things get too much over the festive season, it can be helpful to talk to someone about how you are feeling. This could be a friend or family member, or a charity which helps people cope with their financial or mental health troubles.
MaPS’ Murphy says: “If you’re struggling with money and mental health, it’s really important to seek help as soon as you can.By reaching out you let someone you trust share the burden and start your road to recovery.”
If you find yourself struggling with debt this Christmas and need support or advice, there are many debt charities which can help.
The Mental Health & Money Advice website contains articles about managing your money and caring for your mental health.
You can call Samaritans on 116 123. This free, 24/7 telephone service is available every day of the year, including Christmas Day.
Image source: Getty Images
About the Author
Dive even deeper
Autumn Budget 2024: What Tax Rises Mean for You
by Sam Bromley
What is TransUnion? How to Get Your Credit Score and Credit Report
