‘Tis the season of gifting! We all know that it’s better to give than to receive . . . but many times, we can go a little overboard on our holiday spending. Giving out of the goodness of your heart is a beautiful thing. But what happens when holiday spending takes us above and beyond what we can actually afford?
Last year, 35% of Americans went into debt for their holiday spending averaging $1,549.1 According to PYMNTS, almost “one-third of shoppers used credit cards, point-of-sale loans, or installment plans to pay for their Black Friday buys this year.”2 And 45% of people who live paycheck to paycheck used these methods to pay for 60% of their Black Friday deal purchases.3
Four Ways to Keep Your Holiday Spending in Check
Don’t let your holiday spending be a reason you’re living beyond your means (or send you into debt). You can still spread holiday cheer without breaking the bank. We’ve got some tips that will help you keep your spending in check this holiday season:
1. Have a plan.
One of the best ways to make sure you don’t overspend this Christmas is by creating a budget (and sticking to it). If you’ve been setting money aside in a Christmas fund, you know exactly how much you have to spend. And if you’re new to the idea of saving funds, that’s okay. It’s not too late. But before you start spending, make sure you budget for it. Decide how much you want to spend on gifting before all those great deals start hitting your inbox. You’ll be glad you did!
2. Find an accountability partner.
If you’re married, your spouse is your built-in accountability partner. And if not, find someone you know you can trust with your finances to hold you accountable to your budget. Tell them how you want to be held accountable and what should happen if you break the budget. Then, give them your plan and ask them to check in each week through the holidays. Remember, the only way this relationship works is if you’re fully transparent and honest about how you’re spending your money.
3. Spend with cash or debit.
With the increasingly popular installment payment options on the rise, it can be tempting to buy something now and pay for it later. But that can get dangerous. It’s easy to assume that you’ll have the month to pay for that item in a few months, but you never know what life might throw at you. The best way to ensure you can pay for that purchase is to spend with cash or a bank/debit card. Plus, when you know it’s coming from your bank account, you’ll be more likely to stick to your budget.
4. Get creative.
Not everyone wants something tangible for Christmas—and that’s okay! There are plenty of other creative ways to show a loved one that you care:
- Give to their favorite charity in their honor.
- Give the gift of time or mentorship.
- Plan an experience together.
- Start a giving fund.
The holidays are more about spending time with the people we love and cherish. You don’t have to worry about how this year’s holiday spending will impact your finances in the new year. Use these tips and get creative with your gifting this season. And remember to check in with your SageSpring Wealth Partner. We’d love to help hold you accountable to your financial plan this season.
