A Guide to Holiday Spending
It’s the holiday season–that magical time when money flies out the door.
Every year, millions of Americans spend hundreds of dollars on holiday gifts and goodies. It is easy to get overwhelmed with a season centered on heightened spending.
Overspending inevitably leads to the common New Year’s resolution to cut spending and save money.
But celebrating during the most festive time of the year doesn’t mean emptying your bank account or leaving your credit cards maxed out.
Consider these 5 financial tips this holiday season and get a step ahead on your resolutions:
- Write A List Before Going Shopping
While keeping track of your spending is vital, this importance grows during the holidays.
The holiday season can be a stressful time of year without a shopping list. You want to avoid filling your shopping cart with too much stuff.
- Hunt for Deals
Visit the clearance section of the store for crazy deals.
But sales aren’t the only way to get great deals on gifts. Look for discount coupon codes and make price comparisons to find the best deals.
- Build and Stick to A Budget
Budgets are an essential tool to avoid overspending. And while a budget can feel limiting, it can also open your mind to opportunities you didn’t consider.
The holiday season can bring about unforeseen expenses, so it is always smart to set aside some extra funds in your budget for things that may pop up.
The money you’re splurging on gifts and activities is money that isn’t going to bills. A good rule of thumb is to spend no more than 1 percent of your annual salary on holiday travel and gifts.
- Spend on Experiences, Not Things
Buying gifts for too many people is the quickest way to go broke.
While holiday gifts are nice, they’re quickly forgotten.
Science has shown that quality time and experiences make us happier both in the moment and in the long run.
Give the gift of your time and talents–deliver groceries to neighbors in need, volunteer at a food pantry, or make care packages for friends and family.
- Use Cash-Back Reward Cards
More than half of consumers have already begun holiday shopping to get a head start.
If you haven’t shopped yet and are planning to use your credit cards to pay for holiday purchases, get the biggest bang for your buck.
A cash-back rewards card can be a great way to do that by giving you 1–5 percent cash back on various purchases. You can use that money to pay for more gifts or help pay off your next credit card bill.
Conclusion
This year-end, keeping financially healthy is especially important because of many economic uncertainties related to inflation and rising interest rates.
Following the above tips to help keep your holiday spending under control, you can effectively avoid a spending hangover that could follow you into the new year.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.