The invisible costs of holidays

THE INVISIBLE COSTS SERIES RETURNS

Welcome to the fourth edition of our popular series, The Invisible Costs. For our new TJA friends, Heather and I have been exploring hidden expenses that sneak into our everyday lives. So far, we’ve covered the invisible costs of childcare, travel and homeownership. For this edition, we’re getting into The Holiday Spirit: Halloween, Thanksgiving, Christmas, Hanukkah, Kwanzaa, New Year’s Eve…I’m disrupting my millennial sleep patterns just thinking about it; and course, spending will inevitably run hot.

For most Americans, the holiday season is one of the most expensive times of the year. According to Deloitte, the average shopper is expected to spend $1,778 on holiday-related items this December, which is up more than 8 percent from last year. But beyond the obvious costs—gifts, decorations, and travel—the hidden expenses pile high. 

Let’s dive into our overlooked holiday costs. We’ll also share a couple practical tips to help you avoid that financial hangover in January.

Utilities. Between the glow of Halloween inflatables and twinkling Christmas lights, holiday decor delivers sky-high electricity bills along with that holiday spirit. Powering those pop-up zombies and red-nosed reindeers isn’t free. While it certainly depends on the size of your display and the types of bulbs you use (incandescent or LED), holiday lighting can increase your electricity bill from the tens-to-hundreds of dollars this time of year.

Travel insurance. It sure felt like delays and cancellations were at an all-time high this year, with airlines feeling the squeeze from increased travel demand, staffing issues, and cybersnafus like what happened with CrowdStrike. Sprinkle unpredictable winter weather and cold and flu season on top of 2024’s preexisting travel woes, and you've got a recipe for disruption. This might be the season where travel insurance actually pays off. Premiums run from the hundreds to thousands of dollars, depending on the trip and number of travelers. But the goal of coverage is to protect the costs you’ve outlaid for a big trip with your whole family, as well as recoup the costs you may need to spend to pivot quickly in the event of a delay or cancellation for a covered reason. The peace of mind might be worth the extra bucks to prevent a Family World War in the event travel doesn’t go as planned.

Alcohol. Tis the season of toasts, gatherings, and countless last-minute liquor runs. Whether we’re heading to Friendsgiving or holiday parties, we’re often caught running to the store for “just one bottle” so we don’t arrive empty handed. But instead of facing the holiday markup on that one bottle of chilled Champagne left in the refrigerator case, you can be proactive. This is the perfect time to pick up a whole case of your favorite wine or spirit at whatever price point you’re comfortable with. It doubles as a ready-to-go gift and something you can serve guests coming to your house. Many stores offer case discounts, if you ask. Worst case, you’ll have some extra bottles to get you through hibernation.

Specialty foods and snacks. Who’s ready for pumpkin-spiced, peppermint-flavored, and gingerbread-infused everything? During the holidays, we buy things we'd never touch during the rest of the year just because they scream "spirit!” I am looking at you, eggnog ice cream and candy advent calendars! Specialty foods are like holiday kryptonite, turning your grocery list into a whimsical wonderland of unnecessary fluff. One loaf of Trader Joe’s Pumpkin Brioche is fine, but try to resist the urge to go all-in on seasonal treats that bloat your grocery bills. Most of this stuff is terrible for you, anyway. (Sorry, I’m being such a Scrooge.)

Spontaneous giving. Holiday generosity comes in many forms. Donating to charities you want to support is one manifestation of your values, and it’s important to give this time of year. But above and beyond what you’ve allocated for, spontaneous giving adds up when requests for local toy drives, food drives, coat drives, “Giving Tuesday” campaigns, and community-based appeals arrive in your inbox, in your kids’ backpacks, or even in the parking lot of your local grocery store. We think it’s wonderful to give—we give. Just remember to pace yourself and try to weave spontaneous giving into your broader annual intentions for the year.

Black Friday slippage. Black Friday might be marketed as the Superbowl of shopping, but let’s be real: buying things you don’t need at a discount isn’t saving you money. The best strategy for holiday shopping is to make a list, check it twice, and stick to it so you can avoid the temptation to buy something just because it’s on sale. Heather put together a great strategy for shopping, and those rules of thumb will help no matter the time of year.

You don’t need to deny yourself holiday magic to keep a closer eye on these invisible costs that can snowball into a Yeti-sized problem in the new year. Plan ahead, stay mindful of those sneaky expenses, and you’ll glide through the season with your budget—and your sanity—intact. After all, the best gift you can give yourself is starting a new year free from buyer’s remorse.

Readers: what costs add up for you during the holidays? Let us know!

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Gandhi once said, “Be the change you wish to see in the world.” So last Halloween, Heather made our coffee (costumes) at home. Oh, the savings!

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TJA in the News

Heather’s back in this week’s issue of TheSkimm Money Newsletter answering a reader question about whether now’s the time for a dream trip to Disney. Very apropos, since we’ll be making our own pilgrimage to Orlando in two weeks!

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The content shared in The Joint Account does not constitute financial, legal, or any other professional advice. Readers should consult with their respective professionals for specific advice tailored to their situation.