Reducing Financial Stress This Holiday and in 2022


By Eric Souders, AWMA®, CSRIC®

The approaching holidays mean different things for each of us, but the journey toward the festivities can often be stressful. As January approaches, for some, work can become burdensome as end-of-year goals are pushed forward and prioritized. Gift buying, making travel arrangements, and entertaining family have their own deadlines. This year, factor in the complications of a lingering pandemic and the squeeze of  rising inflation, and the stress could be, shall I say, lead us to not be the best version of ourselves.

Reducing stress is always important, but it becomes even more crucial during the holidays when budgets are stretched thin. Money can cause a lot of problems in relationships and there’s no reason to add additional stress during the holidays. Having a financial plan goes a long way toward reducing holiday stress, but you need to remember to take care of your mind and body as well as your wallet.

Chapter 1

What is Financial Stress?

Financial stress is a condition of anxiety or fear over money concerns and it’s often exacerbated by the holiday season. Anxiety over financial issues isn’t just a mental state either. Physical symptoms can often manifest as well, such as insomnia, headache, fatigue, and weight gain or loss. Additionally, financial stress can make us irritable, depressed, and unsatisfied.

Money is one of the most commonly cited causes of stress in America. But unfortunately, most of us don’t have many options when it comes to increasing income. Unless you can switch jobs, get a raise, or win the lottery, you won’t be able to ease your money worries by bulking up your bank account. Moonlighting might be very popular right now, although finding time for another responsibility around the holidays could create more unnecessary stress. You may want to wait until the new year.

If you can’t increase your income, you only have one other option – spending less. We all probably have the goal of spending less and saving more, but vague goals are easy to put off and forget about. Spending less requires discipline and specificity. You’ll need to create a budget, find areas to cut back, and then stick to your plan. It’s that third part that trips most people up.

Chapter 2

Controlling Your Holiday Spending

The holiday season comes with additional burdens this year. Shortages and supply chain delays will make many popular gift items hard to come by. Inflation will create extra pain at the register for the gifts you can find. You’re going to need a game plan for holiday spending this winter. Here are a few ideas to consider:

–       Create a Holiday Budget

First and foremost, you’re going to need a holiday budget. This involves not just a gift list, but food, travel expenses, and items like decorations and cards. Set limits for each category and try to avoid impulse shopping. If you struggle to avoid temptation, take cash with you and leave the credit cards at home when shopping.

–       Pitching In For Family Meals

Hosting family for holiday dinners can be a rewarding experience, but cooking all day is taxing and food costs this year are high. One way to lighten the stress load is by asking friends and family to pitch in with a dish of their own. With multiple people cooking and bringing food, you’ll save time and money while also adding a little variety to the meal.

–       Consider a Gift Exchange or Pollyanna

Getting a gift for everyone in a large family is a major source of stress. A quick way to break your budget is by feeling obligated to buy gifts for every last aunt, uncle, and cousin. Plus, big families need to coordinate gift buying so no one gets the same thing twice. A pollyanna exchange is an easy way to keep your spending in check while being fair with gift-giving. Everyone draws names, sets a spending limit, and purchases a gift for their specific person.

Chapter 3

Using Financial Checklists

As the end of the calendar year approaches, you’ll probably have to tie up plenty of loose ends at work. Creating checklists is an easy way to cover your bases and complete your work responsibilities, so why not create something similar for your personal life? You’ll want to create two different financial checklists: one for the end of 2021 and another for the start of 2022.

Year-End Checklist

Getting your finances in order for the end of the year helps at tax time, but also ensures you meet your annual goals. Check off the following items before 2021 comes to a close:


  • Review Your Retirement Plan – Is your asset allocation on target? Are you utilizing all the tax-advantaged accounts you can? Your retirement plan is a malleable thing and you should adjust your savings rate, risk tolerance, and asset allocation if you find yourself off-target.


  • Manage Any Payroll Deductions – Did you max out your 401(k)? What about contributions to a Health Savings Account (HSA)? Converting your payroll deductions into qualified accounts can reduce your tax burden significantly.


  • Check on Taxable Accounts and Consolidate Investments – How about your non-retirement accounts? Do you have stock investments scattered across various brokers? The end of the year is a good time to consolidate investments for tax-loss harvesting.


  • Review Your Estate Plan – An estate plan is an important part of your financial health. Are your affairs in order should something happen to you? Make sure you have a will and/or trust to dictate your final wishes.


  • Fund Investment Accounts for Dependents – Getting kids started early with investing is always a good thing. Many brokers have custodial accounts that parents can Manage in their children’s names, as well as 529 Plans and Coverdell ESAs for education expenses.

Checklist for 2022


  • Review Your Budget – With a new year comes a new budget. Will you have any extra expenses to prepare for in 2022 like college for kids or a long put-off vacation? Review your 2021 budget and make tweaks to accommodate any expected changes for 2022.


  • Save More for 2022 – Did you meet your savings goals in 2021? If not, you’ll need to save more in 2022. But saving extra money requires specific action, so find areas of spending to cut down, like eating out or traveling.


  • Review or Assign Beneficiaries – Did you set a beneficiary for your various retirement and investment accounts? If something happens, you don’t want the courts deciding who gets your assets, so set a beneficiary for each account you’re able to.


  • Create an Emergency Fund – Expect the unexpected. You’ll want to build an emergency fund with at least two months of expenses that you can tap quickly. Savings accounts may provide less than stellar rates, but an emergency fund needs to stay liquid.


  • Request a Free Credit Report – Each of the credit reporting bureaus will provide a free copy of your report annually, so use the calendar flip to pull a copy from one of them. You’ll still be able to access your full credit report twice more during the year if need be.


  • Pay Off Credit Card Balances (and Don’t Enroll For More) – Credit card debt is a financial killer. Credit card rates are astronomical and carrying balances on your cards each month can get out of hand. Credit cards are great tools when used correctly, but if you have debt, put the cards away and consider a personal loan if you can’t pay off your balances.


  • Get Identity Protection – Not a month goes by anymore without a news story about some kind of data breach at a major business or institution. There are companies that consistently fail to protect your data, so getting some form of ID protection is a must to protect yourself.

Chapter 4

Reducing Stress and Staying Healthy

Addressing financial worries is only one part of the process. Physical and emotional health is just as important. Like the financial checklists above, you’ll want to keep certain factors in mind when fighting stress.


  • Diet and Exercise – It’s easy to put off the gym and gorge on sweets and carbs during the holidays, but don’t ignore your daily routine. Keep steady with your exercise routine, especially if you get extra time off from work. And it’s okay to treat yourself to some delicious food, but don’t overdo it.


  • Proper Sleep Schedule – You’ll often read articles about CEOs who claim to sleep three hours a night and work 12 hour days. It’s important to ignore any advice that doesn’t preach the value of a solid night’s sleep. Lack of sleep can increase anxiety, disrupt our biological clocks, and create a litany of health problems down the road.


  • Manage Your Work / Life Balance – The office gets busier around the holidays, but don’t neglect your health in pursuit of a few extra hours on the job. Work/life balance is a huge part of managing stress and overworking yourself in the name of financial security often backfires. Take time for self-care.


  • Meditate – Take 10 minutes a day to observe your breath, what you see and hear, how you feel, and the random thoughts that come and go. Short daily meditation practice has been shown to lower stress, anxiety, and blood pressure, improve emotional health and sleep, and enhance self-awareness. Give it a try, you might be surprised.

Chapter 5

Building a Financial Safety Net

Safety has been one of the main themes of American life since the start of the pandemic, but you need a safety net for your finances as well as your health. Protecting yourself and your family from financial stress means saving AND spending must be balanced.

Saving money in an emergency fund is a must for anyone. Having two months of expenses put away in a liquid savings account is a good place to start since you don’t want to be forced to sell invested assets to meet any unexpected expenses. With interest rates as low as they are, the price of liquidity is a minimal return.

Another crucial aspect of financial safety is insurance. Insurance can be a frustrating topic since it can appear confusing, and expensive, yet we hope to never use it. But insurance protects us from accidents, health problems, and the unexpected. Car, health, and homeowners/renters insurance are three must-haves for every individual and family. But you also may want to consider disability insurance if your family would lose income if you lost your ability to work. If you have a family who depends on you for financial security, you can no longer put off getting some form of life insurance. Consult with your financial advisor on the best (and most cost-efficient) ways to ensure your family’s financial future.

The holidays will come and go, but it’s important to manage financial stress at every time of the year. 2022 will be a challenging year of recovery for all of us, but having the right plan and coping skills to manage financial stress can lead to a healthier and happy new year.

Ascendant Financial Solutions, Inc. is an independent SEC Registered Investment Advisory firm serving clients in the Flagstaff and Phoenix, Arizona areas. With more than thirty years of experience in the financial industry, we partner with families, business owners, and retirees to ascend to greater financial heights on their journey to financial freedom. No matter how complex your financial goals are, our team will rise to the challenge to help you meet your goal.