Feeling that Holiday Pressure to Spend, Spend, Spend? Here’s How to Stay on Track
- December 12, 2022
- By: Greenpath Financial Wellness
The holidays are beautiful, magical, and dang…they can get expensive fast.
With the holiday season in full swing, what’s new this year when it comes to managing our money?
One key concern for holiday shoppers this season is inflation.
With rapidly rising inflation, high prices are causing consumers to recalculate how much they will spend on gifts, and who they will buy gifts for, according to the 2022 holiday forecast.
According to an October 2022 KPMG report, 85% of surveyed consumers are concerned about inflation. More shoppers than last year are planning to wait until late in the season as consumers wait for the best deals.
Another noteworthy survey finding is the enthusiasm consumers are showing for in-store shopping.
KPMG expects that much of the additional holiday spending this year will occur in physical stores, while online spending will be relatively flat.
In a post-Pandemic world, according to the researchers, “People want the social aspects of physically being able to see, to touch and feel, for certain gift categories.”
It’s hard to stay on track financially, especially during the gift-giving season, with record-breaking inflation as well as increases in interest rates which makes borrowing money more expensive.
So how do you enjoy a magical holiday without overspending? Below are some tips for staying on track.
Figure out your plan.
The first step our financial counselors recommend is to figure out what you can spend. Take 15 minutes to plan out your paycheck for the rest of the year. We promise it will help. You can nerd out on it too, and go for a more in-depth spending plan if you want a head start on those New Years’ Resolutions. “A spending plan can be really simple,” says client advocate Maurice Turner, who works with people to help them figure out how much they have, what’s already committed to expenses and bills, and how to use what’s left to achieve their goals.
Stay strong and avoid the temptation to put it on a credit card. Your future self will thank you.
Gift-giving is not a contest to see who can rack up the most debt. (Honestly, who wants to win that contest?!) 41% of shoppers are willing to go into debt this holiday season and even higher for those already in debt. More than half of them expected it to take five months or more to pay it off. At minimum payments, it could take more than five years to recover from your Christmas shopping spree. “It’s tough to forego buying someone that special something. But you don’t want to still be paying for it next July (or the next, or the next.) And the thing with credit card spending is that you wind up paying so much more for the gift once you add in interest and fees. It undoes that amazing deal pretty quickly,” says financial counselor Jeff Arevalo, who works with GreenPath clients to manage their debt with the goal of paying it off faster.
Tune out the noise, and tune into what the season really means to you.
Put a filter on that inbox, turn off the tube, log out of Facebook. All that FOMO (fear of missing out) noise is just noise. And once you turn it down, you have time to reflect on the gift you would like to give (as opposed to the one an advertiser wants you to buy!) and why it matters to you. Often a nontraditional gift can feel as special (or even more!) than another box from Amazon. For some people, this means giving homemade gifts, or making time to reconnect; for others, it means volunteering together or giving back to a cause they believe in. GreenPath Empathy Coach Maja Reed, who works with our team to communicate compassionately and without judgment, suggests asking, “What gift would express the feeling you want to share with a loved one?” Turning into what you value makes it easier to select a gift that supports what the holidays mean to you, and fits your financial needs, too.
What if ho-ho-ho turns into uh-oh?
If you are caught up in the holiday frenzy, and you are stressing about overspending, GreenPath can help. 90% of people surveyed report feeling better prepared to handle their finances after speaking with a financial counselor. Last year, we served over 200,000 households on their journey to financial wellness.
“I just paid it off. I was 19,000 in debt just on one credit card alone. If anybody was having some debt problems and was trying to figure out how to pay it…I will recommend that they reach out to GreenPath.”
Nashaya | Brooklyn, NY via ConsumerAffairs.com