Holiday Shopping Considerations

Holiday Shopping Considerations
November 8, 2019
Best Ways to Manage Your Holiday ExpensesWith the holiday season right around the corner, consumers are often unprepared for the additionalexpenses for those special presents and occasions and exit the holiday season with debt—a gift thatunfortunately keeps on giving.According to the annual survey released by the National Retail Federation and Prosper Insights &Analytics, consumers expect to spend an average of $1,047.83 this holiday season, which is a 4 percentincrease from the $1,007.24 they said they would spend in 2018.Research shows that many Americans who rack up holiday debt do so on high-interest credit cards,averaging $1,230 in 2018, according to an annual survey conducted by Magnify Money. This notes anincrease from $1,054 in 2017, and $1,003 in 2016, in holiday spending.A lack of preparation could be the problem. According to a 2017 survey conducted by mobile startupVaro, 74 percent of Americans say they often fail to budget properly for the holidays, forgetting to takeinto account the full range of holiday-related expenses such as last-minute gifts, food, decorations, andholiday outfits.And then there’s always peer pressure. According to a 2018 survey by Bankrate, two in five Americansfeel pressured to overspend during the holiday season, with parents and middle-income earners feelingthe greatest burden.Even after the decorations are stored away, debt on credit cards tends to linger beyond the holidayseason. According to a Magnify Money holiday debt survey, 49 percent of holiday shopper respondentssaid it would take five months or longer to pay the season’s debt off of their credit cards. That means in2018, those shoppers were still paying off their holiday debt into May of 2019.The statistics are even more alarming for holiday shoppers who are planning to make minimum paymentson their debt. For example, it would take more than five years to repay a debt of $1,230 on a card with anannual percentage rate of 16.5 percent if the cardholder was making minimum payments of $30 eachmonth. That shopper would not be rid of the 2018 holiday debt until 2023.Despite holiday spending pressure, consumers can still enjoy the season’s festivities and manage toavoid a lump of debt through these following spending tips: Look for travel deals. Book your travel early and use online tools such as Expedia or Kayak tocomparison shop. Try carrying on your luggage to avoid excessive fees and avoid peak traveldates where possible. Make a gift list. Make an extensive list of all family members, friends, teachers, and more thatyou need to purchase gifts for so you can accurately define your budget, then set a specificamount you want to spend for each category of recipients. Track your spending. Return to your gift list and budget after each purchase to track yourspending and make sure you’re staying within your financial limits. Pick a payment. Plan the way you’ll pay; cash or credit. If cash, start setting aside savings foryour spending now. If credit, make a repayment plan to avoid carrying unnecessary debt into nextyear. If you need a new source of funds for the holidays, consider a seasonal job or suspendingcertain luxuries for a couple of months. Do it yourself. Get creative and make your gifts. From pictures of the kids to holiday treats,candles and crafts, there are a lot of easy DIY options. Shop the deals. Pay close attention to sales ads and take advantage of big sale days such asBlack Friday and Cyber Monday. Sign up for email lists of your favorite retailers, so you receivenotifications of exclusive discounts. Share hosting responsibilities. If you’re hosting a holiday get together with family or friends,consider asking guests to each bring a dish and if sharing gifts, consider drawing names insteadof buying for all. Start saving earlier next year. In January, open a specialized savings account at your creditunion. This will let you easily set aside money each pay period throughout the year, so you’ll beready to shop more efficiently next season. Let us help with our low, fixed rate Platinum Visa Card. « Back to General News Releases

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