With carols playing on the radio and a New Year approaching, the holidays are a time of anticipation and excitement--but for some Americans, they can also bring about anxiety and depression. During this festive and often frenzied season, some of the most common stressors can be traced back to two sources: family and finances. Research on the lifestyles and financial situations of the New Middle Class reveals interesting trends around holiday pressures that can put a damper on this traditionally cheerful time of year.


The Celebrations and Obligations of Family Gatherings


Family gatherings are the centerpiece of many holiday celebrations. Culture and tradition encourage us to spend quality time with our loved ones and reflect on the blessings of family. And while these get-togethers can be deeply meaningful and fulfilling, they can also create unrealistic expectations.


“We think this should be a perfect time, the food will be perfect, and our conversations will be respectful. But when our realities don’t match that, we get frustrated,” explains says Terri Orbuch, a relationship expert and sociology professor at Oakland University, in a story for Popular Science.


Our research suggests that family is a big part of non-prime Americans’ lives not just during the holidays, but all year round. Non-prime Americans (with credit scores below 700) are 20% more likely to live in households of three or more people. They’re also more likely than prime Americans to be caregivers to elderly parents and are almost twice as likely as prime Americans to have elderly parents living with them. For individuals with complicated or difficult family situations, the gap between expectations and reality can result in feelings of stress. But on the other hand, a close-knit and loving family can bring out the warmth and joy that characterize the “most wonderful time of the year.”


Unwelcome Holiday Surprises: Expenses and Debt


The holidays present a myriad of temptations and triggers to increase spending: there are gifts to buy, parties to host, and elaborate meals to prepare. But stretching a budget too far can have consequences beyond a low bank balance: when holiday expenses rise, the added struggle to make ends meet can bring on stress and depression.


It’s one thing to accidentally overspend a holiday budget by a few dollars, but larger expenditures that arise unexpectedly can be much more worrisome. According to our recently released holiday report, nearly 60% of consumers with non-prime credit scores reported experiencing an unexpected expense last holiday season. For these Americans, an expense that exceeds 31%  of their monthly income can cause a significant disruption to their finances. To look at it another way: in the event of a medical emergency or necessary home or auto repair, on average, a bill for $1,400 or more becomes a crisis (source: Non-prime Americans: The Scourge of Unexpected Expenses).


In addition, we found that about a third (32%) of non-prime consumers incur additional debt during the holiday season, the average amount of which is over $800. These Americans are 62% more likely to take on new debt than consumers with prime credit scores.


The holidays can be complicated, especially for Americans whose financial circumstances or family dynamics create challenges to upholding the traditions and expectations that surround this time of year. Taking the time to slow down, relax, and cope with seasonal stress can help maintain the spirit and goodwill at the heart of the season.