How to Avoid Holiday Spending Stress
Thankfully, there is more and more evidence that our economy is slowly recovering. For example, according to comScore, online Black Friday sales alone increased 26 percent from last year, coming in at a whopping $1.042 billion.
While rising consumer confidence and spending is good news for all of us, it’s important to employ a healthy dose of common sense during the holiday shopping season. The spirit of giving, combined with a potential newfound comfort level about your finances, is a wonderful and powerful motivator, but you don’t want to start the New Year with unnecessary debt and money stress.
With some simple planning, however, you can make the most of holiday gift giving and protect your financial health at the same time. Consider these great tips from the American Bankers Association:
Develop a budget. Before you start shopping, develop a realistic budget. Consider your income, subtract your normal monthly expenses, and then add any savings to whatever cash is left over. Don’t forget costs beyond gifts, like postage, gift wrap, decorations, greeting cards, food, travel and charitable contributions.
Make a list and check it twice. Keep your gift list limited to family and close friends, noting how much you want to spend on each. In most cases, others will appreciate not having to reciprocate with a gift.
Spend carefully. Avoid shopping while rushed or under pressure, which can lead to hasty decisions and overspending. Make sure to comparison shop online first, or download an app that lets you compare prices before you head to the cash register.
Avoid traps. Finding a spectacular sale on something you’ve been wanting can easily throw you off course. Stay strong and stick to your budget. And don’t apply for store credit cards you don’t need just to get a one-time discount.
Use credit wisely. Limit the use of credit for holiday spending. If you must use credit, use only one card, preferably the one with the lowest interest rate, and leave the rest at home. Pick a date when you can pay off your holiday credit card bills, and commit to paying off the balance by that time. Be sure to check statements for unauthorized charges and report them immediately.
Save your receipts. Not only will you need them for possible returns, you’ll need them to keep track of what you’ve spent and to compare with your credit card statement. Knowing how much you spent will help you plan for next year, too.
Be creative. Consider simple, hand-made gifts instead of store-bought ones. Send greeting cards or handwritten notes of appreciation for those outside of your list. Remember, home-baked goods and simple hand-made gifts are what truly exemplify the spirit of the season.