Whether it comes from sky-high interest rates, the return of student loan repayments or simply the ever-increasing cost of living, there’s a lot of pressure on our wallets these days. Even more bad news? Early trend forecasting reports predict that holiday shoppers are set to spend as much as 14 percent more than last year. So, how do you safeguard your bank account against all this madness? We asked an expert for 3 tips to keep your seasonal spending in check.
Holiday Shoppers Are Set to Be Extra Spendy This Season—Here are 3 Red Flags to Watch Out For
About the Expert
Courtney Alev is the consumer financial advocate for Credit Karma, a personal finance company that offers resources and tools for everything from everyday money management to taxes and even home buying.
1. Beware Black Friday (and Cyber Monday) Promotions on Overdrive
At the exact same moment holiday music starts getting piped into stores, your inbox floods with eager beaver Black Friday alerts, sale prices and BOGO deals. “Consumers are pulled in every direction during the holidays and we can be blinded by the overwhelm of it all,” Alev says. “What seems like a good deal may turn out not to be, but it’s also the number one reason to be intentional about your holiday spending.” Indeed, it’s this last chance mindset that can cause us to upend our budget. “Social media ads are getting smarter every day, so I make it a policy for myself to never mindlessly purchase anything online,” Alev says.
Instead, start the season with a set list of what you want to buy, whether that’s for groceries or Black Friday purchases. Then, if you see an item from your list that’s on sale, go for it. But don’t go off-book just because you see a “good” price.
2. Budget for Inflation
At the current rate of 3.2 percent, inflation is lower than last year, but it’s still making nearly every aspect of the holidays more expensive. “Prepare to make more room in your budget this year for items beyond the gifts like food, entertaining and travel,” Alev says. For example, holiday fixings like sweet potatoes and ham are up by as much as 5 percent this year, and Christmas trees are still facing an increase by as much as 6 to 8 percent. If you notice a higher-than-typical price, factor it into your holiday budget, even if you have to ballpark it. This can help you make adjustments early—say, suggesting a White Elephant gift exchange or adjusting your travel plans to non-peak days . “The more you can anticipate and save in advance, the less of a pinch you’ll feel at the cash register.”
3. Pay Attention to the $$$ You Spend Treating Yourself
According to reports, there are two categories where spending is up: Holiday décor and consumers with the urge to treat themselves. Of course, it can be easy to justify that adorable tree skirt or spiced latte, but the key is to stop and ask if you’re buying something that’s a nice-to-have or a need-to-have. Alev calls this the FOMO Test. “When you’re about to hit ‘buy,’ ask yourself if you’re buying it because you truly want it or if you’re spending on an item because it’s trendy or you’re just trying to keep up with your friends,” she says. “Will you be excited about the item in two weeks, two months or two years from now?” You can also counter over-swiping by creating a dedicated holiday savings account. If the funds in that account run low, you’ll know it’s time to pause.