It may be tempting to buy just about anything to check off your Christmas list in this final stretch of the holiday shopping season. However, financial experts say this is a crucial time to set yourself up for a financially successful 2013.
“It’s the end of the year, so you’re naturally thinking it’s time to exhale and you get to start fresh in January, but that’s not really the case,” said financial planner Peter Dunn.
The National Retail Federation predicts Americans will spend more this holiday season compared to last.
Dunn said racking up credit card debt for the sake of buying gifts is never a good idea. To avoid getting caught up in the holiday hype, Dunn suggested taking a tip from the man in red: make a list. Writing down what you need to buy and how much you can afford to spend on each person can prevent the dreaded impulse buy.
“If you get caught up in the moment and only intended to spend $30, but you’re there and it’s $65, unless you’ve committed to that goal by writing it down, I think you tend to overspend,” said Dunn.
He said parents often get into trouble because they think they need to spend the same amount on each child or spend the same amount their spouse will spend on them.
Instead, consider quality over quantity, Dunn recommended. He said if you buy something a loved one really wants and it costs less than you’d planed, don’t feel pressure to tack on another gift just to hit a certain dollar amount.
A study from the NRF reports each shopper will spend about $750 this holiday season on gifts and other seasonal items.
Dunn said it’s wise to consider the season as a whole when making a holiday budget, including the cost of travel, dining out and hosting guests.
“A good thing to do is approach the big spending time, which is the next couple of weeks, and look at your budget and say ‘Okay, what can we cut out that we normally spend because we’re going to have all these expenses?'” said Dunn.
If you’ve already gone overboard this year there are things you can do to set yourself financially straight in 2013. First, plan for next holiday season early. Each month set aside five percent of your earnings for holidays and gifts. If you file your taxes early, you could get your tax refund in February. Dunn also suggested visiting indianaunclaimed.com to look for any unclaimed refunds.