PORTLAND, Maine — Editor's note: This story originally aired Nov. 18, 2020.
Brenda Pollock is a financial counselor for Evergreen Credit Union. She has some tips for staying within your budget this holiday season.
The holiday shopping season is upon us. With the rise of COVID cases, financial uncertainty for so many Mainers, what can be expected for holiday shopping this year?
Americans spent an average of $942 last year on holiday shopping. With everything occurring, and the consumer debt at $14.27 trillion in the second quarter of 2020, budgeting for holiday shopping 2020 is advisable.
Write down a list of everyone you plan to give gifts to
From your nearest and dearest to your in-laws and the mail carrier. Then put a dollar figure next to each name. Setting price limits helps you keep your holiday budget on track.
Price check online
Despite your best intentions, perfect gifts have a way of blowing any holiday budget. If you want to buy a gift that is over your budget, go online to see if you can find a better price elsewhere. Many stores have price-match policies if you find a better deal. If you order online, look for free shipping.
Don’t procrastinate
One of the surest ways to blow your holiday budget is to wait until the last minute. Not only are you more likely to overspend, but rather than make holiday shopping enjoyable, it becomes stressful.
Buy last year’s electronics
For many people, buying an electronic the latest and greatest features aren’t important. You can save big by buying an older version of a device that was the latest and greatest just a few months ago.
Black Friday and Cyber Monday
Studies have shown there isn’t a huge difference in markdowns between one-day promotions, such as Black Friday and Cyber Monday, and regular holiday sales. Instead of focusing on event-style sales, look for deals every day.
Stay on top of your spending
Spend wisely by reviewing your account statements, paying your bills regularly, and using online banking to easily monitor your accounts. Set up automatic savings each year for holiday gift shopping. If you purchase gifts using a credit card, use a card that offers cash back or other rewards.
Make homemade presents
Homemade presents are great ways to save money while creating something personal and memorable. These gifts might not work for everyone on your list, but they’re good options for some. Consider photos for grandparents or cookies for your kids’ teachers.
Check your emotions at the store door
Gift-giving deals with emotion and emotion and spending don’t go hand in hand. Make a list of your current debt – credit card debt, car payments, mortgage payments, and so on. Keep that in your wallet. When tempted to overspend, remind yourself of what you already owe.
Trends this year show Americans' spending has declined between October and November. While it’s noble to want to be generous during the holiday season, it’s important to prioritize your financial health.
What so many of us forget to add to our holiday shopping list are the incidental items such as wrapping paper, extra holiday foods, decorations and so, you can easily tack on an additional $300 – $500 or more.
What if you overspend? What do you recommend?
- Retrain your brain to stop shopping
- List all your debt and make a plan to chip away at your debt.
- It’s a new year, and you need to ease back into a healthy routine so you can reestablish your emergency fund, and open a holiday savings account where you automatically put money from each paycheck for next year.