Holiday shopping has begun! Well, it sure seems like it. Black Friday ads from the most popular retailers, including Best Buy, Amazon, Target and Walmart were released last week. How do you make sure your merry November and December shopping does not leave you with scary credit card bills in January?
Being Cavalier Will Cost You
If you are in the 30 and under crowd, reigning in your spending is even more important. According to surveys, millennials are less likely to know their credit score, less likely to check prices, and less likely to do their holiday shopping with a list and budget.
No matter your age, though, the reality of credit card bills that exceed your income capacity to pay is something you want to avoid. It can quickly cause whatever joy you experienced during the holidays to evaporate, as stress takes its place.
Retailers Should be Happy With 2018 Holiday Shopping Revenues
eMarketer, a market research firm, reported earlier this month that according to the data they have compiled, consumers will spend more than $1 trillion during this holiday season. The holiday season is defined as from November 1 to December 31. This would be an increase of 6% over last year’s holiday spending.
Assuming the predictions are correct, this means that you are ready to spend a significant amount of money on holiday shopping. But, if you haven’t set a holiday shopping budget, and been saving for it all year, then you will be turning to your credit cards.
Holiday Credit Card Bills Add to Your Debt Load
A MagnifyMoney post-holiday debt survey conducted last January found that American consumers took on more than $1,000 dollars of debt just from their holiday shopping. This means that in addition to the regular bills, plus other loan payments, you now have new debt of at least $1,000, maybe more.
If you are sure you can pay the bills within a month or two, then no problem. But if not, then that pile of credit card bills is going to be a scary reminder of what happens when you don’t have a holiday shopping strategy.
There are some simple things you can do to avoid credit card debt and still have a great time shopping and sharing. Here are a few tips to help you have a great January too.
Holiday Shopping Season is not the Time for Brand Loyalty
To get the most out of your holiday shopping budget, you need to kick your brand loyalty out the door. OK, maybe you love Amazon Prime and you paid your membership and it’s easier to just head to the site and do all your holiday shopping. Bad idea. The price may not be the best. This is the time to shop around and compare prices. Shopping apps are great for helping you find the best prices (and they give good reviews too).
Shopping Online? Drink Water, Coffee or Tea
According to a survey conducted by Finder.com, 61% of millennials said that they shop while under the influence of alcohol. One sure way to rack up a pile of credit card bills that you cannot afford to pay is to shop while you are drunk. All self-control goes out the window. You end up with stuff you never intended to buy.
Remember back in January when you made your financial resolutions? One thing on your list was creating a budget. In your budget should have been a category for holiday expenses. This is the budget you have for your holiday shopping. You can avoid those credit card bills simply by sticking to the budget you created and using only the money that you have been saving up all year.
Make a gift list (go ahead and include something fun for yourself!). Think about everyone. Decide how much you want to spend on each person. Check the list twice or more to be sure you have not forgotten someone.
Compare the total from your gift list with the amount you have saved in your holiday budget account. If the total exceeds what you saved, then go back over the list.
Come up with more affordable gifts or think about what you can do for that person other than a purchased gift. For instance, maybe offer a service. If you have a large family, consider trading names. Each person only needs to purchase one gift. Help your kids make gifts for their teachers rather than buying them.
It can be tough to cut people from your gift list or reduce the expenditure, but this short-term emotional pain is far less than what you will experience when those credit card bills arrive.
Be Creative and Think Outside the Box
There are some cool gifts you can purchase that benefit more than one person. For instance, you could purchase a Netflix membership for the entire family. Everyone will enjoy it.
Pay with Cash
Obviously, this only applies if you are going to bricks and mortar retail sites. Spend only what you have in your wallet. Once the wallet is empty, your shopping day is over. Resist the urge to use your credit card, even if you stumble upon something that looks too good to pass up. If you do use your credit card, be sure not to charge more than you can pay off when the credit card bills arrive.
Bottom line: The holiday shopping season can be lots of fun. Stay faithful to your financial goals. These last much longer than the holiday season. Spend wisely and remember…there is a tomorrow.