As the holiday season approaches, so too does the busiest shopping season of the year—with shoppers expected to spend big.
The National Retail Federation (NRF) expects record high consumer spending this year—with people spending an average of $902 per person across gifts, food, decorations, and other seasonal items this holiday season—$25 per person more than last year, and $16 higher than the previous record set in 2019. A survey from debt.com found that 66% of holiday shoppers plan to take on debt for holiday shopping this year.
Experts say that it is possible to shop without breaking the bank—it just requires a little planning.
“You’re giving your future self a gift by not overspending because of the financial stress that comes with that self-inflicted expectation that you need to do more or spend a lot on a particular item,” says Julia Lily, founder and wealth advisor at Ryerson Financial.
Here are some tips to make holiday shopping more budget friendly this year.
1.Set a budget
It’s helpful to be mindful of your spending habits year-round, but making a budget can be particularly useful around the holidays. “Create a spending plan to make sure that you have the right resources to allocate across all of those different gifting goals, versus doing what I call the close-your-eyes and swipe-the-credit-card shopping experience,” says Lily.
2. Make a list
Before you start shopping for yourself and others, write out a list of who you’re shopping for and what you really need—and stick to it. “Just like going to the grocery store with a list makes grocery shopping so much easier, going into holiday shopping with a plan will make things easier,” says Sarah Paulson, certified financial planner and owner of Valkyrie Financial.
3. Shop deals intentionally
Don’t let the temptation of a good sale pull you into an unnecessary purchase.“The first question that I always encourage you to ask is, ‘Would you still buy this if it wasn’t on sale?’” Paulson says.
Instead, use sales as an opportunity to buy items that were already on your list, and keep an eye out for price-matching services that many retailers offer.
4. Look at your holiday spending patterns
According to a NerdWallet survey, 28% of shoppers who used credit cards are still paying off last year’s holiday expenses. If you found yourself overspending last holiday season, Rosario Chacón, certified financial planner and founder of Wealth-Source Financial, recommends thinking back to your purchases to get a sense of what may have caused you to go overboard. “Was it a necessity, or was it something that [you] didn’t think through?” says Chacón. “This is the time to think it through.”
5.Reframe expectations
Experts say that it’s fine to be upfront about what you can and can’t afford during the holiday season. “Having more honest and frank conversations around finances would help alleviate a lot of the stress around people feeling like they need to kind of keep up with the Joneses,” says Lily.
For young kids, instill the idea that the holidays are about traditions and not just about gifts , says Charcón. “I think that could go a long way to teach children that is not about consuming, consuming and consuming,” she says.
California shoppers last year aggressively used their plastic to keep on shopping.
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