Avoid Holiday Debt
It is the most wonderful time of the year, but holiday expenses can trip up even the savviest shoppers and savers. With supply chain shortages, shipping delays and inflation driving up the cost of holiday goods, it is important for consumers to be mindful about their spending to avoid a post-holiday debt hangover.
Holiday spending can add up quickly. Thirty six percent of people took on holiday debt in 2021 (an average of $1,249 per person). Here are steps you can take to help you plan your holiday gifting and avoid the stress that comes with overspending.
Set a Budget
Help prioritize your spending and make it predictable with holiday specific budget categories (gifts, travel, food, décor, charitable giving). Start saving as early as possible and consider setting up a separate savings account ahead of time. If you have kids, involve them in the spending plan and budgeting process to help inspire their learning around the topic of holiday giving.
Make a List
Make a list (and check it twice). Check in with friends and relatives to find out what their needs may be. Perhaps you choose to cover the cost of a shared experience together, or buy them something they truly need, rather than a gift you may be unsure about. Once you’re clear on the spending plan, making a list of gifts, estimating the cost per item, and sticking to the plan will help you remain within budget.
Get Creative
Give a meaningful gift without breaking the bank by adding a touch of creativity. Consider homemade or handmade gifts, special recipes, pictures, cards or mementos. The most memorable gifts might not cost anything at all and might mean the most to your recipient.
Avoid Impulse Buys
Don’t be fooled by Black Friday and other deals designed to get you to impulse buy. Often these sales aren’t what they seem and are offered throughout the year. Be clear about what you need to buy, how you plan to pay for it, and don’t feel pressured to buy an item just because it’s a good deal.
Track Your Spending
The best way to remain on budget this holiday season is to track your spending. You’ve made a list of what to buy, now keep track of what you’ve spent (as you go). Periodically checking in on the total cumulative spend will help avoid the unpleasant reality of exceeding your budget.
Give Back, Be Present
Create meaningful moments with friends and loved ones over the holiday season. Seek out ways to give back and help those in need. With all the hustle and bustle over the holidays, let your presence be the best gift you give.
By Rachel Caballero | TruWest Credit Union
