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October is seen by many as the official start of the holiday season, with Halloween decorations flooding the town and talk of holiday plans mounting. While it may be the funniest time of the year, it’s no secret that the next few months will also bring a major increase in shopping and spending.
With all the gift shopping, travel, and party planning you might be doing in the near future, it’s important to review your monthly budget to make sure you have a financial plan in place to cover those extra expenses.
Let’s start by looking at some holiday spending projections for 2022 to give you a taste of what you can expect in the months ahead.
Recent studies show that consumers are likely to feel the impact of inflation as they look to finish their holiday shopping late in the year. A Retail Dive article shares that due to this year’s economic downturn, holiday sales are only expected to grow between 4% and 6%, compared to a 15.1% increase over the time of year. last. So what does this mean for you?
A continuous rise in prices due to inflation significantly decreases your purchasing power in the overall market. Many families will find themselves re-budgeting and coming up with new plans for gift giving and planning holiday parties in order to stay within their financial means this year.
Your main financial goal throughout the holiday season should be to avoid racking up credit card debt or dipping into emergency savings. This will help reduce your stress so you can approach the New Year with financial peace of mind.
Vacation Spending Plan
The first step in preparing for the next few months is to know your financial situation. Take the time to sit down with your household fund managers to review your financial situation and vacation spending plan. To better understand the vacation spending you have available, map the funds coming into your accounts in the new weeks, subtract any bills that are due in that time period, and make a list of any vacation-related purchases you know of. come and see if you are on the right track.
Here are some vacation budgeting tips that I think are the most beneficial:
▪ Make a list of family/friends/parties you need to buy presents for.
▪ Set a limit for each person based on gift expectations and what fits your budget.
▪ When budgeting for children’s gifts, ask them to make a list and choose the top two items they would like to have.
▪ Create your shopping list and find sales on anything and everything.
▪ After you’ve finished your holiday shopping for this year, create a holiday savings account to give yourself a cushion and minimize stress when this time returns next year.
Bonus Tip: Take advantage of cashback current account offers or credit cards that reward you with every purchase. If you’re already planning on spending a good chunk of change this holiday season, you might as well be rewarded for those purchases with points or cash in your pocket. Many financial institutions will introduce special offers on credit cards during the holidays.
Stretch your dollar
Again, the most important tool for staying on track with your vacation spending is to make a plan and stick to your budget…but it can’t hurt to find other places to cut back or save. Here are some suggestions if you’re struggling to cover all of your vacation expenses:
Reduce your expenses: The first thing to do when looking for a quick way to save money is to cut down on unnecessary small purchases. Consider skipping your daily coffee or weekly happy hour after work. While that may not seem like a lot of money at the time, these purchases add up over time. You might be shocked at how much you end up saving.
Maximize sales: Black Friday, Small Business Saturday and Cyber Monday are fast approaching.
Group donation: A great way to cut expenses is to give group gifts. Talk to your siblings about getting your parents a gift, or get your cousins together to buy something special for your grandparents. In addition to saving a little money personally, you’ll have the satisfaction of giving the recipient something more special or more expensive than they might otherwise have gotten.
It’s the thought that counts: No matter what you decide to get someone this holiday season, remember that it really is the thought that counts. Whether you’re buying the #1 gift on someone’s list, making something from scratch, or browsing the local thrift store for a diamond in the rough, the holiday season is all about celebrating with the people who matter. more for us. If there’s anything the past few years have taught us, it’s that spending time together is the greatest gift.
Narrow your circle: Consider reducing the amount you spend on each person or the number of people you buy for in general. If you typically buy for extended family members or groups of friends, don’t be afraid to have the difficult conversation of taking a break or simplifying gifts for this year. Chances are these people fully understand wanting to downsize because many of us are in the same situation. It’s about spending quality time with the people you love anyway, isn’t it?
Let’s Talk Money is powered by CommunityAmerica Credit Union and this week’s feature comes from Financial Wellness Coach Janelle Holland.
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