Decorations, presents, travel – holiday season expenses can really add up. Still, there are steps you can take to stay within your budget and avoid a scary credit card bill in January.
“In order to be able to give the same that you gave last year, you may end up having to spend a little bit more,” says Matt Schulz, chief credit analyst at LendingTree. Schulz says inflation means more Americans will pay more to buy the same things this year, even if they can’t afford it.
“An awful lot of people take on debt during the holidays.”
For 2023, PWC’s Holiday Outlook projects shoppers will spend more than $1,500 each. That’s up 7% compared to 2022. In fact, that number has been climbing steadily for the past eight years, except during the pandemic.
So how do you keep your spending on the rails? Schulz says it’s hard to overemphasize the importance of budgeting. Personal finance expert Shavon Roman agrees with that sentiment. She suggests making two plans. One on how much you can spend and another for what you’re going to buy.
“Shop online,” says Roman. “You know exactly what you're going to get. Buy it and then log out.” By skipping the store, you can avoid unnecessary temptation.
“It's a recipe for disaster going down every single aisle.”
If you do shop in person, don’t forget to use comparison-shopping tools to do a price check. “Scan the label in the store app and it may actually be cheaper online,” says Roman. “You should be able to get the cheaper price in the store.”
If you’re still worried about going over your budget, set a hard limit and stick to it. “Put that budgeted amount on a prepaid credit card, and once it’s done, no more spending,” Roman says.
Finally, don’t buy out of emotion and enjoy spending time with your loved ones. Roman says no one is going to judge or remember how much you spent on their presents.