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Holiday shopping — and snagging the lowest price — can overtake some people’s better instincts. Think of Black Friday, which, ironically, occurs the day after Thanksgiving, when we give thanks for what we have. Who hasn’t heard of folks lining up in the wee hours, long before a store opens? Or pushing others out of their way to grab a deal?
When held in check, spending can be delightful, harmless fun, especially when you find the right gift for someone special. Holiday fever is already spreading. How do you keep your head and avoid blowing your budget, as inflation continues to take its toll?
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Holiday budgeting helps control your debt load
With interest rates on the rise, this would be a terrible time to run up your credit card balances, says Larry Hendrickson, founder and managing partner at G&H Financial in North Canton, Ohio. “The holidays can be a very expensive hole to dig yourself out of, if poor decisions are made.”
Millions of consumers are doing just that. According to WalletHub’s latest “Credit Card Debt Study,” Americans racked up $67.1 billion in credit card debt during the second quarter of 2022 — a record for the second quarter of any year. WalletHub projects that consumers will add a total of $110 billion in debt this year.
Still, you don’t want to feel like Scrooge and disappoint the special people in your life. Fortunately, with careful thought, you can celebrate and be generous — without regret. Here are solutions to some common holiday budget challenges.
1. Make a list — and check it twice
Challenge: Right now, planning for the holidays seems overwhelming, and you’re concerned about the cost.
Solution: Create a complete holiday list before the big push starts.
Include all major items — gifts, food and decorations for holiday parties, and festive clothing, says Julie Ramhold, a consumer analyst with DealNews.com. “By figuring this out now, you'll be able to set a holiday budget far ahead of time, which will make it easier to stick to,” she adds. You’ll also avoid paying more if you must buy something at the last minute.
As you create this list, decide on the amount you can afford to spend on family members and friends, and stick to it, says Hendrickson. “It’s hard to resist the urge to buy something for everyone you know.”