Holiday shoppers plan to spend nearly $ 1,000 this year, survey finds: 3 tips to avoid overspending
The holiday season is a happy time of year, but it can also be a time of added financial stress for many consumers. Americans plan to spend an average of $ 998 this year on holiday gifts, food, decor and other expenses, according to a new investigation conducted by the National Retail Federation (NRF).
With supply chain issues and inventory shortages threatening to drive up the prices of consumer goods and even groceries, celebrating the holidays can be even more costly than expected. The good news is that major retailers are taking steps to reduce inventory shortages and increase product availability, according to NRF President and CEO Matthew Shay.
“The retail industry works diligently with ports, labor, shippers and transportation providers as well as government officials to overcome supply chain challenges and ensuring that consumers have access to the gifts they want to give and, just as importantly, receive, ”said Shay. .
Still, it’s important to be diligent with your holiday shopping budget to avoid stepping into the New Year burdened with holiday debt.
Read on for tips on holiday spending, including how to consolidate debt at the end of the holiday season. Visit Credible to compare rates on a variety of financial products, including debt consolidation loans, without affecting your credit score.
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3 holiday shopping tips to keep your spending under control
It’s possible to buy the perfect gift for everyone on your Christmas list without emptying your wallet. Use these tips to keep your vacation spending in check so you can enjoy this special time of year without additional financial stress:
- Make a gift budget
- Keep track of your spending
- Use credit card rewards
Learn more about each buying strategy in the sections below.
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1. Make a gift budget
It’s easy to lose track of your spending while on vacation. This is why it is so important to budget before you start shopping, according to Lindsey Bell, head of markets and monetary strategist at Ally Bank.
“The best way to limit impulse buying and last-minute spending is to create a gift list ahead of time and allocate a budget for each person,” Bell said. “Since no plan is perfect, put some money aside in a buffer fund for the perfect gift that doesn’t exceed your budget. “
Having a holiday shopping strategy can help you stay responsible and reduce financial stress, she added.
However, gifts aren’t the only vacation expense. You also need to consider other ongoing vacation costs, said Joe Buhrmann, senior financial planning consultant at eMoney Advisor.
“Remember to include items such as decorations, ingredients for meals and baking, and parcel post postage in your vacation budget,” said Buhrmann. “Also, if you are traveling, don’t forget gas, hotels, and plane tickets to visit your family.”
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2. Keep track of your spending
Budgeting is only helpful if you can track your progress. There are many free budgeting apps that connect to your bank accounts to track your spending. Some of these apps even offer push notifications so that you can receive an automatic alert if you’re about to hit your spending limit.
“Tracking expenses is now as easy as clicking a mouse or opening an app,” Bell said.
However, budgeting apps aren’t for everyone. If the technology is too overwhelming for you, consider withdrawing a lump sum to save yourself from overspending.
“It can be easy to overspend if you use plastic,” Buhrmann said. “Paying cash can force you to be a little more creative when shopping and finding more meaningful and personal gifts. “
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3. Use credit card rewards
Rewards credit cards allow you to earn cash on your daily purchases and even airline miles that you can redeem for vacation travel. If you plan to stay put during the holiday season, you may be able to sell your bonus points to purchase gifts for loved ones.
“Check to see if you have credit card reward points for hotel stays,” Buhrmann said. “Are there any Airline Points that you won’t use or accumulate enough to receive a free flight? Many of these can be redeemed for merchandise or gift cards to help you spend during the holidays.”
Visit Credible to compare rewards cards that can help pay for holiday expenses this year. It’s free to browse the offers to find the right credit card for you.
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How to consolidate debt after overspending on vacation
It’s easy for frugal consumers to overspend in the Christmas spirit. But putting vacation expenses on a credit card can be an expensive financing option if you don’t pay off your debt on time.
According to the Federal Reserve, credit card interest rates are near all-time highs, hitting 17.13% for all accounts rated at interest in the third quarter of 2021. This means your credit card balances overdue during vacations can be more expensive than ever.
If you have accumulated credit card debt over the holiday season, consider paying it off at a lower interest rate with a debt consolidation loan. This is a type of personal loan that you pay off in fixed monthly payments over a set period of months.
Unlike credit card rates, personal loan rates are near their all-time low. The average rate on a two-year personal loan was 9.39% in the third quarter of 2021, reports the Fed.
If you are considering using a personal loan to consolidate your vacation debt, it is important to compare the offers of several lenders to make sure you are getting the lowest possible rate for your situation. You can find your estimated rate on Credible and use a personal loan calculator to see your potential savings.
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