How to stretch your budget during an unconventional holiday season

The coronavirus pandemic has taken a toll not just on American's health but also on their wallets. According to a survey by the National Endowment for Financial Education, eighty-eight percent of consumers say the COVID-19 crisis is causing stress on their personal finances.

While consumer confidence is rising, it remains below pre-pandemic levels. And as we move into the holidays, you may be looking at ways to stretch your budget while still enjoying the season.

"Fortunately, holiday shopping doesn't always have to mean big spending and major financial consequences," says Blake Street, founding partner and chief investment officer for Warren Street Wealth in Tustin, Calif.

Here are some tips on how to stretch your holiday budget.

Set expectations and make a plan

The first step is to talk to your family and friends about gifts so that everyone is on the same page.

"One of the easiest ways to limit overspending is to set gift-giving expectations upfront, so there is no unintended social pressure to reach or exceed certain thresholds," Street says. "In the vast majority of my experiences, most people are happy to hear some guidelines for gift-giving."

Niv Persaud, certified financial planner and founder of Transition Planning & Guidance in Atlanta, suggests estimating how much you can afford to spend. "List all friends and family members you intend to buy gifts for during the holiday," she says. "Set a 'not to exceed' amount for each person or family on your list. Then start early to take advantage of discounts such as Amazon's deal of the day."

Buying gifts is just part of holiday expenses, adds Nadine Marie Burns, a certified financial planner with A New Path Financial in Ann Arbor, Mich. She includes all of the holiday activities in her spending plan.

"We make a list with a baking plan, decorating plan, meal plan, and a plan for each person on the gift list," she says.

Stretch your dollars

With a plan in hand, look for ways to make your money go as far as possible by looking for holiday season deals.

"Utilize things such as credit card points, cash-back offers, free shipping, or buying items through alternative means such as online peer-to-peer marketplaces," Street says. "If you're able to receive additional cashback for using a certain credit card at a certain vendor, make sure that is the credit card you use. If you're able to get a discount by paying cash, which is more common at small businesses, than you would think, ditch the credit card altogether."

And watch those "nickel and dime" charges that come with the holidays, such as paying for gift-wrapping or expedited shipping when you wait until the last minute to order gifts or other holiday necessities, Street adds.

Get creative

More than three-quarters of consumers would rather spend their money on experiences than on material items. Consider this in your gift-giving, and look for ways to give of your time, Persaud says.

"Create gift certificates for services you can offer, such as dog walking, car washing, house cleaning, or cooking dinner," she says. "The value of this gift is your time, which is priceless."

If you're crafty, search Pinterest and Instagram for gifts you can easily make, such as holiday masks or ornaments. "Or show off your refined baking skills and give mini banana bread loaves or anything else you mastered during the pandemic," Persaud adds.

Remember: It's the thought that counts. While this is a cliché, it's truer than ever for the 2020 holiday season. Investing time upfront could save you money and give you peace of mind. Consider it a gift you give yourself this holiday season.