holiday shopping

The holiday season is upon us, and with that often comes lights, good food, and memorable moments with friends and family. But it also signifies the start of the shopping season. While it can be tempting to want to impress with dazzling gifts, it’s important to measure your spending so that you don’t end up in debt when the season comes to an end. 

According to the National Retail Federation, holiday sales in 2021 are expected to reach as high as $859 billion, an all-time high. If the prediction rings true when the new year comes into focus, there will be a lot of people in debt next year. 

If you don’t want to spend the next year recovering from the holidays, avoid these shopping mistakes:

  1. Don’t wait until December to start shopping. Even if it’s too late for you to start this habit now, apply it to next year’s shopping plan. By shopping throughout the year, the impact it has on your wallet is reduced, making it easier to pay it back as you purchase items. 
  2. Don’t wait all year to budget. Again, waiting until December can foil your plans to have a healthier shopping season. By setting aside money throughout the year, you’ll have a nice little nest egg and won’t have to scramble to budget all your friends and family.
  3. Don’t use credit cards. Research has shown that when people charge to a credit card, they’re more likely to splurge. The best way to shop is by using cash or a debit card. And if you do charge to your card, make sure you can pay it back that month. Racking up your card can ultimately hurt your credit score, and that’s definitely not the gift you want to give yourself this season.  
  4. Don’t ignore your debt. It can be tempting to overlook current credit card debt during the shopping season and promise yourself you’ll pay it back later, but that’s not the way to go. Instead, you should prioritize your debt over buying and budget accordingly. 
  5. Don’t forget to budget for other holiday expenses. It can be easy to forget that beyond the gifts you’re eager to buy there are also holiday parties, holiday cards, travel, and food and beverages to include when you’re going over your holiday budget. These items can all add up fast.

Now that we know what to avoid when preparing for holiday shopping, here are some helpful tips on how to be more proactive: 

  • Make a list of the people you want to buy for and the items you’d like to get them. This way, you won’t forget anyone last minute and ruin your budget, and you’ll be able to integrate a gifting plan that reduces impulsive purchases that can hit your credit score hard. 
  • Take advantage of holiday sales that arise throughout the year, online and in-store.
  • Get creative with gifting. Through DIY or smaller sentimental gifts, you can cut your costs while also showing you care in a meaningful way. 

If you’re struggling with debt now or after the holidays, it may be a good time to look into a debt management plan. A credit counselor can work with lenders to reduce your interest rates, consolidate your loans, and roll the amount owed into one affordable monthly payment. 

The holidays shouldn’t be scary, and as long as you’re prepared you can emerge from them with your budget intact and a season full of memories to carry you throughout the year.

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