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Thursday, December 7, 2023
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5 Tips To Get Ahead Of Holiday Debt

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According to statistics, Americans spend more than $1,450 each year on holiday-related purchases – from presents and travel to decorations and entertainment. These costs combined with your monthly expenses can put a significant strain on your budget.

Finances FYI Presented by JPMorgan Chase

By Aaron Allen, The Seattle Medium

“Tis the season…” The holiday season, and many people find themselves spending a little – or a lot – more than usual during these festive final months of the year.

According to statistics, Americans spend more than $1,450 each year on holiday-related purchases – from presents and travel to decorations and entertainment. These costs combined with your monthly expenses can put a significant strain on your budget.

However, you don’t have to break the bank to celebrate the season. Smart planning can get you ahead of the holidays and leave you with funds for merrymaking the way you want. Consider the following tips from Paul Butler, VP Community Manager for JP Morgan Chase, to help minimize holiday debt.

Butler’s first tip is to save, save, save. While solid advice for any time of year, it can take on more importance during the holidays. One way to save is to set up a separate savings account for holiday expenses. Start saving at the beginning of the year, and vow not to withdraw any money until it’s time for holiday shopping.

Make your holiday plans now. Butler advises consumers to set guidelines for their holiday spending. Make a list of your expected holiday expenses and estimate the costs to see if they fit into your overall budget, and adjust your list as needed.

“It is essential to make your list of expected holiday expenses, and to estimate the cost,” says Butler. “It is really important that once you know what direction you’re going it is going to be a lot easier to be able to save and obviously one has to be very intentional about this. For your holiday plans to work out, you have to be intentional and stick to it.”

Build a holiday budget and stick to it. Once you’ve made your list, commit to staying within your budget. With so much pressure surrounding gift-giving, it’s easy to spend more than you planned. Shop online to ensure you’re getting the best deal, or search for coupons and deals to help lower costs. Get family and friends on board with your plans by suggesting a gift swap instead of buying gifts for everyone; opt for handmade gifts or even pitch in for a group gift. If you’re hosting a holiday dinner, shop in bulk for food items.

“This is always a challenge even for myself,” says Butler. “Building your budget, how much do you want to spend, who you are spending it on, I think about family members, co-workers as an example, it is important to really understand who and how many you are buying for and take this into consideration when you are planning your budget.”

Scope out major deal days like clearance sales, Black Fridays, etc can help keep families and individuals on course to staying within budget. In addition to the deal-hunting tips above, you should try to take advantage of Black Friday and Cyber Monday sales. Look up retailers’ deals ahead of time to see if you find goods and services you planned to purchase anyway at lower prices. Many retailers start big holiday sales as soon as Nov. 1, so do some homework now on the gifts you have your eye on so you can spot and take advantage of online, and in-person deals before the holiday rush.

“[People should look for] clearance items and find deals throughout the year,” says Butler. “Look for bargains, or anything that can help you stick to your budget so that you don’t go outside of it, obviously this is one of the hardest things for most people to do is to stick to that budget.”

Picking up a short-term gig is always an avenue to saving more and preparing for the giving season. According to Butler, “even the best-laid budget plans can still fall short of your available funds. If your schedule allows it, consider taking on a temporary job to bring in some extra income. Many retail or dining establishments need additional workers to handle the holiday rush, and demand often increases for ride-booking and delivery services as well. Or take up a side hustle selling crafts for example.”

These are just a few ways to help you get a handle on holiday debt, but there’s so much more that savvy consumers can do to save. See if your credit cards have special offers at your favorite stores or for your favorite purchases and look for special cash back deals. Be flexible and keep an open mind in general – if you can’t get a good deal on the gifts you originally planned to buy, see if any of the special offers you qualify for might be good substitutes.

The bottom line, putting financial parameters in place can help you feel more confident and less stressed about your holiday spending. Have fun with your planning, saving, and budgeting – it’s a great way to get into the holiday spirit early.

Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.