Smart Budgeting During the Holidays
December 10th, 2015 by Bunch & Brock
Research by the world’s largest retail trade association estimates that this year’s holiday sales (other than auto, gas and restaurant sales) will increase 3.7 percent, to $630.5 billion, representing approximately 19 percent of the retail industry’s annual sales of $3.2 trillion. Similarly, an annual national survey on holiday spending by the American Research Group found that the average planned spending of $882 for 2015 was slightly up from last year’s $861. Looking back over the last decade, the average planned gift spending for this year was $465 above the low in 2009 and $60 below the high reached in 2005. It can be so easy to equate the spirit of the season with how much money we spend on our loved ones or on displaying our cheer, but no one should start the New Year off in debt.
Here are a few helpful hints to save money, stretch your budget, and welcome 2016 without a pile of holiday debt.
Look at the overall picture.
Many people make a list of those for whom they want to buy presents. The better approach is to flip that expectation around, assign a dollar amount to each person, and focus on what you’ll spend rather than what you’ll buy. If you luck out and find that $50 sweater on sale for $30, consider your shopping done for that person. There is no requirement that you spend the whole $50 that you had set aside in your head. For big families, try to get others involved in a gift list so limitations are clear. And don’t forget that holiday costs extend beyond presents, to decorations, parties, food, wrapping paper, cards, postage, traveling expenses, and more.
Any big-ticket items that you might be buying should be researched in advance so you’ll know a good price when you see one. Learn about any features or benefits that may make the model you’re considering cost more than a different version, and make sure you need those extra bells and whistles. Visit comparison-shop websites, such as shopzilla.com and pricegrabber.com, use digital coupon codes posted by sites such as couponcabin.com and retailmenot.com, and sign-up for retailer emails that may alert you to steep discounts.
Do it yourself.
Don’t underestimate the value to your loved ones of what you can make. Homemade presents are thoughtful and add a touch of personalization that lets someone know you took the time to create something unique for them. Bake their favorite kind of cookies, make them a craft, offer to baby-sit or pet-sit, or give them a coupon for a day off from household chores.
Credit vs. Cash.
There are pros and cons to both kinds of payment. If you are the type of person who understands that credit cards are essentially short-term loans and you will pay off your balance in full before the end of the billing cycle, then it benefits you to use a rewards credit card to earn money back on your purchases. Many retailers also offer credit/debit cards featuring deep discounts for new applicants and existing cardholders. However, if you know you’ve had trouble in the past successfully managing credit card debt, do yourself a favor and pay cash. Set a limit, carry only that amount, and don’t get any more when it’s gone. Using only large denominations may help, since many people find it harder to break up larger bills.
Everyone at Bunch & Brock wishes our community a wonderful holiday season. We know it can be hard to budget, but with more than 35 years of experience in the state of Kentucky, we have helped many people who were struggling with financial issues. If you wish to learn more about how our firm can be of assistance to you, or you want to learn more about this topic, we encourage you to contact us by calling 859-254-5522 or filling out this online form.