What to say to family, friends and yourself when the holidays cost more than your budget allows
The best way to say no to holiday expenses you can’t afford is to decide on your priorities and your total holiday budget before the season starts. Then say no early, name what you’re saying yes to instead and offer a cheaper alternative. A short, kind, specific no protects your budget, and it usually protects the relationship too.
Spending boundaries are decisions you make in advance about what you will and won’t spend money on during the holidays, and why. They protect the financial priorities you’ve chosen, so that in the moment someone else’s expectations don’t make the choice for you.
Key Takeaways
- Decide your top financial priorities and your total holiday budget before the season starts. Setting spending boundaries in advance is one of the most effective ways to stay out of debt during the holidays.
- Every no is a yes to something you’ve decided matters more, whether that’s a down payment, a college fund or paying your credit card bill in full.
- Say no early, lead with your priority instead of “we can’t afford it,” and offer a less expensive alternative.
What My Daughter Taught Me About Saying No
I’ll never forget when my daughter shared some of her strategies for saving for a down payment on her apartment. One of the most powerful was simply saying “no.” She would explain to friends, with no apologies and total confidence, that she wouldn’t be joining them for dinner at insert name of trendy NYC restaurant here. She was saving for a down payment, and the dinner didn’t work with the numbers in her budget. She was firm. She didn’t make excuses. She was, in fact, proud to say no. She would make another, less expensive plan with them for another time, and she valued their friendship and their support of her goals.
The unexpected result: several of her friends didn’t just support her, they asked for her financial advice! One sadly confessed she was afraid she would live with her parents forever given the state of her finances, despite having a really well-paying job. She didn’t know where her money went.
Keep this story in the back of your mind this holiday season. Use it to reframe how you think about your spending decisions, and how you share those decisions with friends and family. Your goal may not be as specific as hers, but choosing not to spend is something you should never feel shy about. Your money, your priorities.
Saying no during the holidays, sometimes to other people and sometimes to yourself, can be one of the most caring things you do. It’s caring toward the people around you, and toward the future version of you who has to open January’s credit card statement.
How Do I Stop Feeling Guilty About Saying No to Holiday Spending?
Every no is really a yes to something you’ve decided is more important. That reframe is the fastest way past the guilt.
The holidays, and the marketing around them, are designed to make spending feel like the best way to show you love someone. We’re urged to find the perfect gift, throw a bigger celebration and make everything extra special. Saying no can feel like letting people down. In many ways, the hardest no is the one you say to yourself.
So when you pass on the more expensive gift, think of what you’re saying yes to: the down payment that has been a goal for years, your child’s college fund, or paying your credit card bill in full and on time.
Here’s what I want you to do before the holiday season gets going. Write down your top one or two financial priorities, the ones you want to protect. It doesn’t have to be an exhaustive list. Focus on goals that will move the needle in your financial life, especially any that have been making you anxious because you haven’t made the progress you wanted.
When you’re tempted, look at those goals and ask yourself: Is this a better use of this money than my priority? Then choose between the short-term dopamine hit of saying yes and the satisfaction of staying on track. Think of it as an act of self-care.
How to Tell Family You Can’t Afford Holiday Gifts
Saying no to the people you love is hard. It’s a very human thing to want to splurge on people we care about during the holidays, and that’s where most of us get stuck. We worry about how it will be received, and in most cases we really do want to give to them and support them.
Five things make it easier:
- Say no early, and kindly. The easiest time to bow out of an expensive gift exchange or holiday trip is before anyone is counting you in. Tell people as early as you can, before anyone has booked or bought anything. Waiting is more hurtful, and it can cost others money they weren’t planning to spend if they have to pick up the slack.
- Lead with your priority, not the shortfall. Instead of “We can’t afford it,” try something like “We’re putting everything toward our home renovation this year, so we’re keeping gifts small.” You don’t have to explain further or share your numbers. Naming your priority, the way my daughter did, invites support. It also gives others permission to do the same.
- Offer a less expensive alternative. Instead of gifts for everyone, suggest a Secret Santa or a gift exchange with a spending limit. Instead of dinner at a fancy restaurant, suggest a potluck. Odds are you aren’t the only one feeling the pressure.
- Keep the explanation short. The longer the explanation, the more it sounds like an apology, and the more room it leaves for negotiation. Be brief and kind.
- Talk to your kids before the wish lists arrive. Kids can handle more honesty than we give them credit for. You don’t need to share dollar amounts, but you can explain that you’re focusing on a few meaningful gifts this year and let them tell you what matters most to them. Learning about boundaries and choices puts kids on the path to becoming financial grownups.
What to Say: Scripts for Saying No During the Holidays
If you aren’t sure how to phrase it, you might say something like this:
- To opt out of a gift exchange: “I’m sitting out the gift exchange this year. We’re putting everything toward our down payment. Could we do a potluck instead?”
- To turn down a holiday trip: “I love that you thought of me. It doesn’t fit our plan this year, but I’d love to do a weekend together in the spring.”
- To scale back gifts with family: “We’re keeping gifts small this year so we can focus on a goal that matters a lot to us. Can we do one gift per person, or a family Secret Santa?”
- To explain a smaller holiday to your kids: “This year we’re picking a few gifts that really matter. Tell me your top two.”
- To say no to yourself at checkout: “Is this a better use of this money than [my priority]?”
How to Back Out of Holiday Plans You Already Agreed To
As much as we all do our best, this can happen to anyone. Maybe months ago you said yes to a trip that’s going to cost much more than you expected. Or your finances or priorities have changed since then.
The best path is honesty. A clear, firm update in a calm setting you’ve planned ahead of time will soften the disappointment. Nothing is more awkward than silence and resentment. Consider saying something like:
“I’m looking at our plans and I need to scale back on what we were planning. I wanted to tell you now, before anything else gets booked.”
That’s better than going quietly, resenting it, and putting the trip on a credit card you can’t pay off. And the trip won’t be fun if you can’t stop thinking about the financial consequences.
FAQs
Is it rude to back out of a holiday gift exchange?
No. Opting out kindly and early is completely acceptable. Others in the group may be feeling the same pressure and will be glad someone said something first.
How do I tell my family I can’t afford Christmas gifts this year?
Tell them early, lead with what you’re prioritizing instead of what you can’t afford, and suggest an alternative, like a Secret Santa, a spending limit or a shared meal. You don’t need to share dollar amounts.
How do I explain a pared-down holiday to my kids?
Keep it positive and simple. You don’t need to share dollar amounts. Explain that your family is focusing on what matters most rather than spending for the sake of spending. Helping kids understand that every dollar should be spent intentionally is a financial lesson that will serve them well, and it can bring your family closer.
How much should I spend on the holidays?
It depends. The right number depends on your income, your fixed bills, your savings goals and any debt you’re carrying. The truth is there isn’t one number that’s right for everyone. Start from what you can pay in cash or pay off in full on your next credit card statement, and work backward from there.
Is it okay to put holiday gifts on a credit card?
It can be, if you pay the full balance when the statement comes. If you can’t, interest starts building on what you carried over, so those gifts end up costing more than the price tag.
How do I stop overspending during the holidays?
Choose your priorities and your total holiday budget before the season starts, and use them as a filter for every purchase. Saying no in the moment is easier when you’ve already decided what you’re saying yes to.
What if I’m already carrying debt from last holiday season?
You are far from alone, and owing money is a financial circumstance, not a black mark on your character. The first step is to face the numbers. List every balance, its interest rate and its minimum payment. If the total feels unmanageable, a judgment-free conversation with a debt specialist can help you understand your options.
The information on this site is provided as a general resource and does not constitute legal, tax, or financial advice. For guidance specific to your situation, we recommend consulting a qualified professional.