10 Tips for Holiday Spending

Whether you celebrate Christmas, Hanukah, Ramadan, or Kwanzaa, the winter holiday season can be expensive. According to the American Research Group, consumers are likely to spend an average of $1,000 for the holiday season! If you're not careful, this spending can lead to some major financial issues for the New Year. Here are some tips for managing your holiday spending, keeping your costs down, and protecting your credit:

1. Make a list and check it twice – Come up with a gift idea and spending range for each person on your holiday shopping list. Don’t forget to include holiday decorations and entertainment costs to this spending plan for the holidays
2. Avoid frenzy spending – Crowded stores and Christmas bargains can lead to “frenzy spending,” an adrenaline-fueled state of financial black-out where you buy things you don’t really want or need. Avoid overspending by checking prices online first, sticking to your shopping list, and avoiding the most crowded retail days.
3. Don’t be your own Santa – This is a very common holiday budget buster. When you are shopping for gifts, it is easy to be swayed by something that would be perfect for yourself. Don’t buy it! Instead, put it on your wish list or wait until after the holidays to buy it on sale.
4. Know your limits – Your credit score can drop significantly if you overuse your credit cards. Aim to keep your holiday credit card balances well below 35% of your total credit limits .  If this could be a challenge, call your creditors and request a credit line increase.
5. Use cash – If you have a day of big holiday shopping ahead of you, withdraw the amount of cash you’ll need and use that instead of credit cards. It’s much easier to notice when you’ve spent your budget if you use cash instead of plastic.
6. Plan for paying it off – No one wants to start the New Year burdened with credit card debts. Its fine to use credit cards for holiday spending you can afford. Just make sure that you have a plan for paying it off in the weeks after the holidays.
7. Focus on the frugal – Some of the best holiday fun is virtually free! Invite friends over for hot cider, make popcorn garlands, watch “It’s a Wonderful Life” on TV. Remember: no matter what holiday you celebrate, retail is not the reason for the season!
8. Don’t go deeper into debt – If you are already struggling with debt issues , do not use the holidays as an opportunity to make things worse. This isn’t a good time to go off your “debt diet.” Instead, find ways to make or buy inexpensive gifts. Look for good sales and get creative. You’ll be glad you did in January.
9. Avoid retail credit card offers – Saving 15% on your purchase can be tempting, but the negative consequences of opening a new credit card could outweigh your savings. Applying for and opening a new Macy’s or Target card can actually damage your credit scores.
10. Watch out for identity theft Grinches – Identity thieves love the holidays! Many busy consumers stop paying attention to their credit and personal information, leaving a big window for theft. You can guard against holiday identity theft by shredding receipts, and catalogs, reviewing your statements closely, and checking your credit reports.

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