Will the Holidays Cost You More This Year?

Inflation could really drive your costs up.

Many people love the holidays -- the gift-giving, the family gatherings, and the lights that adorn homes and brighten up neighborhoods. But if there's one thing people tend not to love about the holidays, it's the expense involved.

From travel to decor to presents galore, celebrating the holiday season can be a major budget-buster. And this year, you may find that your holiday-related costs are even higher than usual due to inflation. In fact, you may need to rethink the way you celebrate the holidays this year -- and also rethink the way you save for them.

Pump up your cash reserves

Let's get one thing out of the way -- if you want to enjoy the holidays to the fullest without cutting back, then you'll need to boost your cash reserves. You don't want to charge your holiday expenses on a credit card and carry that balance forward into 2023. 

Now, if you're willing to cut back on non-holiday spending and take on a side hustle, then you may be able to celebrate the holidays as usual -- even with everything costing more. Similarly, if you have a nice amount of money in savings, you may be able to dip in so you can uphold the holiday traditions you've come to enjoy.

But if you don't expect to have access to extra money this holiday season, then you may need to take a more budget-conscious approach to your celebrations. That doesn't, however, have to mean enduring a miserable December. 

How to spend less when everything costs more

If inflation is forcing you to rethink your holiday plans, first, know that when it comes to coping with change, your attitude is everything. If you take the attitude that the holidays will still be awesome no matter what, then chances are, they will be.

With that in mind, if you need to cut back on holiday spending due to inflation, your first move should be to set priorities. Think about the elements of the holidays that are most important to you. If you can't bear the idea of not seeing family, then you may not want to cut back on travel. But in that case, the whole "my presence is your present" notion might have to come into play. 

There may also be traditions you can uphold without spending as much money as usual -- or any money at all. If you love sending good wishes to friends and family during the holidays, an e-card achieves that goal just as well as a custom card in the mail you have to pay for. And this way, you create less waste.

Similarly, if you typically host a big party for friends but can't swing the cost this year, don't cancel. Instead, make it a potluck and BYOB. 

The holidays are supposed to be a time of joy. And they still can be, even if you need to make adjustments due to inflation. The reality is that the holidays are likely to cost more than usual since the price of just about everything is up. But if you're willing to roll with some changes, you can still make the season as magical as ever.