It’s the Most Wonderful Time of the Year… FOR CREDIT CARD DEBT

Have you thought about Christmas shopping yet? 

Neither have I. Not all Christmas budgets are created equal, and we need to know our budget before our eyes get bigger than our wallets. The smiles on our loved ones’ faces may not be worth the feeling of credit card debt after the holidays. It’s time to put our blinders on from all of the ads, discounts, promotions, and holiday markdowns. Before we bust through the Black Friday doors on Thanksgiving night-we need to make a plan.

Although this is specifically a Christian holiday, a 2016 survey for Statista found that only 5 percent of the US population said that they would not participate in the Christmas holiday. This spending dilemma affects most of us, and most of us are not good at planning. According to Statista, last year, the average dollar amount Americans spent was $752 on gifts alone.

The problem is… I am a procrastinator.

Christmas will be here before we know it. Like many, I have NOT been collecting thoughtful gifts throughout the year like I told myself  I would. Even though Christmas is the exact same time every single year, I still procrastinate. And I’m not alone. According to a Time article on waiting until the last minute to do Christmas shopping, “76% of adult shoppers say they plan on making holiday purchases right up until Christmas.” Why do we do it? This article explains how Holiday Procrastinators aren’t necessarily lazy, they are typically overwhelmed with decision-making or maybe they are a perfectionist. Some, like me, think that they work best under pressure. But you know what all of this stalling is really doing? It is getting us to spend more money when we run out of options. A study by the American Research Group found that people who wait to shop spend around $250 more than those who shop early.

So what do we do?

I researched some healthy ways to look at money during this time of year and some habits that are worth implementing. Who better to take advice from than the internet and Dave Ramsey?

1. Decide how much you can realistically spend on Christmas.

Ramsey offers an EveryDollar budgeting tool that can help with this. He suggests moving some of your “fun money” for yourself into your Christmas budget. Is there restaurant money you could save on by cooking at home? Every decision can add up to make a difference.

Make categories for your spending. Include everything you can think of right down to your holiday hair appointment. Some forgotten expenses could be gas money for traveling, decorations for your home, food for parties, and of course, the gifts. Add the amount you wish to spend on each. The options are endless, and there may be more expenses than you had bargained for (pun intended). The important thing is that you plan where this dollar amount is going before it goes there.

2. Prioritize – Who are the people I actually need to buy gifts for?

Make a list. Check it twice.

Do you need to buy gifts for your hubby and children? Most likely the answer is yes. Do you need to buy something for your acquaintance that will probably get you something and make you feel guilty? Maybe not!

Check out this Holiday Planner as a shopping template to get started.

3. Simply spend less money. 

Maybe the thought really is what counts! You could consider some of these last-minute options like homemade treats. Are there some people on your friend-list that would be content with a card or baked goods? This could be a solution for people that you want to acknowledge but do not want to splurge on. Who doesn’t love a personal delivery of their favorite chocolate chip macadamia nut cookies? This could be a neighbor, your child’s teacher, or your co-worker. There is no need to over-do it.

Are you a victim of buying a candle for a friend… but also one for yourself? Remember, this is what retailers want you to do. Good Housekeeping reminds us to forget ourselves. The National Retail Federation found that 59% of Americans buy “me” gifts while Christmas shopping and spend an average of $140 on themselves. Maybe if you really want something you can add it to your Christmas list.

4. Make your plan now, and you will thank yourself later.

If all this talk about money is overwhelming to begin with-let us know how we can help. Associates in Accounting, CPA is here to talk money because we realize it is not something most people want to deal with. Our down-to-earth accountants will make you feel at ease whether you want to talk about Christmas-planning and personal budgets or retirement-planning. Did you know we offer financial planning services? Contact us HERE and let’s get talking.