5 Ways to Tidy Up Your Finances Before the Holidays
The holidays are right around the corner. Here are five ways to help you get your finances in order before the holidays.
Many retailers have much to cheer about this year. According to Mastercard SpendingPulseTM, holiday sales increased 5.1 percent to more than $850 billion this year – the strongest growth in the last six years. Online shopping also saw large gains of 19.1 percent compared to 2017.
“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard® and former CEO and Chairman of Saks Incorporated®. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
In November 2018, NerdWallet© reported that nearly three-fourths (73%) of holiday shoppers were planning to use a credit card for their holiday shopping, compared with 58% of holiday shoppers in 2017.
Last year’s holiday shoppers anticipated that they would put $650 on their cards, on average. And while there was an increase in overall spending budgets for 2018, confidence in paying down credit card debt did not see a boost.
Holiday shoppers paying with cards estimated it will take 3.2 months, on average, to pay off their holiday debt. Credit card shoppers averaged 2.3 months to pay off their holiday balance in 2017. Yet, as of November 2018, 39.4 million Americans (28% of shoppers) who incurred credit card debt in 2017, were still paying off those holiday balances.
With holiday shopping creating an irrefutable amount of debt for consumers, our bankers joined forces to help share some tips to prepare for holiday shopping in 2019.
Use last year’s holiday spending as research to prepare for next winter. “Figure out what you usually spend on Christmas and divide it by the number of paychecks you will receive this year. Set up an automatic transfer to have that money put into a savings account each pay period.” says Vicki Jorgensen, Retail Banking Coordinator.
Automating your savings will help you not to rely on willpower alone. By setting up automatic transfers to your account, there is no extra work for you each time you move money; and the funds are out of sight to help ensure you are not spending money you will need in the future.
Figure out what you usually spend on Christmas and divide it by the number of paychecks you will receive this year. Set up an automatic transfer to have that money put into a savings account each pay period.Vicki Jorgensen, Retail Banking Coordinator.
It’s never too early to start planning. Start putting money aside now. Then, once you’ve saved up, stick to what’s within your means.
One way to stay within your means is to keep a list of each family member or friend you’re buying for. Try to set limits for each person so you don’t overspend.
In addition to gifts, set aside extra money for entertaining, traveling, and dining out during the holiday season. (If you need a few tips on budgeting, read our 5 tips to tidy up your finances).
It’s easy to wait until November to start holiday shopping. AVP/Branch Coordinator Phil Bedinger suggests stretching out your shopping throughout the year.
“Buy one or two gifts per month throughout the year– and hide them well,” says Phil. Not only will this help lighten the load later in the year, but it also helps to make sure you are not paying for conveniences, like express shipping.
Black Friday and Cyber Monday retailers promise consumers big bargains. But if you know what a person on your list wants, you can watch for sales throughout the entire year.
Many retailers offer gift card perks (such as buy a $100 gift card and get an additional $20 gift card at no extra charge). If you see deals like this, buy gift cards, and then turn around and buy gifts. (Look, you just saved $20!)
If the person you’re gifting to doesn’t mind second-hand items, such as a like-new camera or video games, shop sites like eBay® for more savings. If you’re shopping local (which is always a great way to support your local economy), subscribe to the store’s email list to learn about upcoming sales.
If you’re purchasing an expensive item, do your research. Take time to go online and do some price comparisons. It often pays to shop around.
If you are short on cash, find ways to show someone you care without going into debt. Remember the reason for the season. Dollars spent do not equal love. Be reasonable, keep organized, and enjoy the holiday season in 2019.
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