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Key Signs You Can’t Afford Christmas

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It’s supposed to be the most wonderful time of the year, but the Christmas season can also be very pricey. In fact, consumers are gearing up to spend an average of $967.13 during the 2017 holiday shopping season — including $478.38 on gifts for family — according to a survey conducted by the National Retail Federation.

Flashy, expensive gifts are nice, but that’s not what the season is all about. If any of the 10 signs below hit too close to home, tailor your holiday strategy around thoughtful, cheap Christmas gifts or just skip the entire gift aspect altogether.

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Paying for Christmas Makes You Feel Stressed

Christmas is a time for giving. But it can also be a time to feel pressured to give beyond your means.

“When you hear the word ‘Christmas,’ perhaps the very first thing you think about is having to buy gifts for all those people, and you think, ‘How am I going to afford it?’;” said Jamie Pomeroy, a financial advisor in Winona, Minn., and founder of Financial Gusto.

Many Americans actually feel this way. Credit reporting agency Experian surveyed consumers before the 2016 holiday shopping season and found that 55 percent felt stressed about their finances during the holidays. Nearly half — 43 percent — of respondents revealed the extra expenses makes it hard for them to enjoy the season.

“If just the thought of Christmas stresses you out, it might be a clear sign that you can’t afford it,” said Pomeroy.

That’s probably not what you want to hear. After all, who wants to forgo celebrating Christmas? But it’s hard to get in a jolly mood when you’re feeling anxious about all the extra bills you’re racking up.

Stay on Target: How Target, Costco and Other Stores Can Help You Afford Christmas

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You Don’t Have a Holiday Budget

That anxiety you’re feeling about the holidays might be due to the fact that you haven’t taken the time to figure out how much you can afford to spend.

“Show me someone who is stressed about Christmas, and I’ll show you someone without a budget,” Pomeroy said.

However, you still have time — especially if you haven’t started buying gifts yet — to calculate how much you can afford to spend. You might find that you have enough to pay for the holidays without relying on credit. But if you’re going to come up short, you can pinpoint discretionary expenses to trim, such as restaurant meals, happy hours and movies at the theater.

Figuring out how much you can afford to spend on gifts sooner rather than later will also give you time to talk with friends and family about gift-giving expectations.

“Make it clear to your family or significant other how much your budget is for each,” said Brandon Hayes, a certified financial planner with oXYGen Financial in Atlanta. Do this as soon as possible so that everyone is on the same page and won’t feel compelled to one-up each other by spending more, he said.

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Your Expenses Exceed Your Income

“If you don’t have money to pay your regular bills, you can’t afford Christmas this year,” said Holly Johnson, a frugal living expert and co-author of the book “Zero Down Your Debt.”

You might have time before the holidays to cut some of your bills and regular expenses — such as groceries, wireless phone service and cable TV — to have a little more cash for gifts. But, you might just have to take a step back this year, Johnson said.

“Tell your family and friends you’re on a tight budget and opt out of as many gift-giving opportunities as you can,” said Johnson.

You can also consider small gifts or those that don’t cost a thing. Some excellent ideas for free gifts include an offer to babysit friends’ and family members’ children or coupons your kids can cash in to spend one-on-one time with you doing an activity of their choice that doesn’t cost money, such as playing a video game they already have.

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You Need to Use Credit to Buy Gifts

It’s one thing if you shop with credit cards to earn rewards points and then pay down your balance. But it’s a red flag if the only way you can afford to buy gifts is by charging them, said Johnson.

However, it’s an even bigger problem if you have to open a new credit card to fund Christmas, said Renee K. Collins, founder of RKC Tax & Financial Services in the Chicago area. After all, opening a new card often means existing ones are maxed out. You don’t want to add more debt to what you already have in order to buy gifts.

Results of the Experian survey revealed that 31 percent of people have gone into debt from unexpected holiday purchases. This holiday season, prioritize paying down your debt over paying for Christmas gifts.

“Be creative,” said Collins. “Make gifts instead. You will feel much better once the holidays have passed knowing you can start the new year without the burden of holiday debt.”

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You’re Still Paying Off Last Year’s Gifts

“This might be surprising to some, but some consumers can’t afford Christmas 2016 because they are still paying off Christmas 2015,” said Leslie Tayne, financial attorney and author of “Life and Debt.” “Before making any additional purchases, focus on paying down your debt.”

Create a plan to tackle your debt by either paying down the smallest balance first to generate momentum or paying the balance with the highest interest rate to reduce the amount of interest you pay over time.

“If you are struggling to pay your debt off, then you might want to consider meeting with a debt attorney or financial counselor to put you in the right direction,” said Tayne. “Your debt and essential expenses are the most important. Plan to put any extra money toward your debt first before you do your holiday spending.”

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You Have a Bigger Gift List — but the Same Budget as Last Year

Problems arise when the size of your Christmas budget doesn’t increase along with your gift-giving list, said Tayne. But if you act now, you still have time to prepare.

Find more cash for your holiday budget by identifying non-essential expenses that you can cut, said Tayne. Or, just buy cheap Christmas gifts.

For example, if you had a budget of $300 to cover 10 people last year and spent $30 on each but now have to buy gifts for 15 people, you’ll have to limit spending to $20 per person. If you gave several gifts to certain people, opt to limit giving to one present per person to ensure you don’t fall into debt, added Tayne.

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You’re Saving for a Big Financial Goal

You might be saving for a big expense this year, such as a wedding or down payment on a house.

“This leaves you with a lower Christmas budget — or no budget at all,” said Tayne. “Don’t fret. Your new home or wedding is a priority right now, and your family will understand.”

Don’t let holiday spending derail your big goals. If you feel compelled to buy gifts, look for other expenses you can cut so you don’t jeopardize your savings, said Tayne. Or, suggest to your friends and family that you draw names so that you only have to buy a gift for one person.

Better yet, suggest that you enjoy a shared experience together that’s free — such as volunteering or caroling.

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Inexpensive Gifts Aren’t Your Style

If your gift-giving strategy involves sparing no expense on your loved ones, this can wreak serious havoc on your bank account — if it hasn’t already. Your heart is in the right place, but if you don’t have the deep pockets to support your spending, it’s time to cut back.

There’s nothing wrong with giving inexpensive gifts. In fact, presents with a low price tag can be even more meaningful to your friends and family, because making a splash with modest means requires extra consideration.

The size of your holiday budget shouldn’t set the tone for your holiday happiness. Well-thought inexpensive Christmas gifts will mean the world to those who deserve to be on your list in the first place.

Read More: The Best Christmas Gift I Ever Bought For $20 or Less

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You Don’t Have a Stable Income

It’s easy to get caught up in the holiday hoopla, but when the season comes to a close, you’re going to need money to live. You might have an influx of cash right now, but if you’re working a temporary job or rumors of pending layoffs are circulating around your office, spending money on Christmas probably isn’t the best move.

Even cheap gifts can add up fast, so it isn’t wise to burn through funds you really don’t have. Resisting the desire to spend the cash in front of you is never easy, but becomes even more challenging during the holiday season.

Avoid the temptation to spend money by finding free ways to enjoy Christmas. Take a drive to look at beautiful holiday light displays, check your community calendar for free holiday concerts and volunteer your time at a local charity where you can have a positive impact on those in need.

If you need a holiday side gig, make sure you find out the best and worst side jobs for extra holiday cash first.

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You Have Zero Savings in the Bank

Having a financial cushion to fall back on is a must because there’s no way to predict when your car will need a pricey repair or your hot water heater will break. If you don’t have any savings put aside, you can’t afford Christmas.

When you don’t have the funds to cover unexpected expenses, you’re forced to either borrow money from a loved one or pay the bill with credit. Your friends and family don’t want you to go into debt, and they definitely would rather not get a gift from you, than have to lend you money in a month or two.

If you have to choose between buying a few cheap Christmas gifts and putting money in the bank, you know which move is the right one.

The Ultimate Guide: 50 Tips for Saving Money During the Holidays

Laura Woods contributed to the reporting for this article.