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This is the time when Americans spend a staggering amount of money on holiday shopping. Inflation, supply chain issues, and higher consumer demands will impact prices and the availability of items this holiday season. The National Retail Federation, however, still estimates that holiday sales will increase by six to eight percent over last year and reach between $942.6 billion and $960.4 billion. Likewise, Alabama is projected to have one of its highest holiday retail sales on record this year with spending projections of around $18 billion.
Since some individuals and families have not fully recovered financially from the pandemic, holiday shopping may cause financial stress. Many people will feel pressured to spend money they do not have during the holiday season. This involves acquiring a large amount of debt because they feel obligated to buy gifts. While the holiday season should be the most wonderful time of the year—due to financial burdens, it has become one of the most stressful times of the year for many individuals and families.
Control Spending and Reduce Stress
Whether shopping online or in a store, here are some ways to control spending and reduce financial stress during the holiday season.
Communicate with Family and Friends
Talk with family members about options relative to holiday spending. Be open and honest about what you can or cannot afford to do. One option is to ask family members to list and prioritize the items they want. Working from the lists, focus on getting family members one or two of their most desired items. If unable to get all the things on their list, at least you would have gotten their most desired items.
Similarly, instead of getting gifts for all your friends and colleagues, several options could be to draw names, create homemade or meaningful gifts, or give quality-time gift certificates, etc.
Use a Holiday Spending Plan
With money set aside for holiday spending, create a separate plan for how you will spend that money. Create a spending plan for all your holiday spending separate from your monthly spending plan. Be sure to include all gifts, gift wrapping, postage, decorations, special foods, holiday entertainment, etc. Once developed, stick to your holiday spending plan. Do not take from your monthly spending plan to cover last-minute holiday items. To also prevent overspending, do not be tempted to use credit cards.
Do Your Research
Do your research before you get an early start on holiday shopping. Research the everyday price of items online and in stores. Many retailers, during the holiday season, constantly change prices or advertise sales. But don’t assume it is the best price just because a “sale price” is indicated. Research the item to determine its best price.
Starting your shopping early can help reduce stress, and it can help you save money, time, and energy. Because of the effects of the pandemic on the supply chain this year, many retailers may have a shortage of workers which can lead to a longer period needed for restocking shelves. Likewise, this year’s projected increase in the number of shoppers can increase the number of shoppers competing for items. Both factors can cause an increase in price due to expected shortages.
Due to the lingering threat of increasing gas prices, early shopping can help you save on the amount you pay for items and for gas used for holiday shopping and travel. When gas prices go up, the cost of other items also increases.
Impulse buying during the holiday season accounts for approximately twenty-five percent of overall holiday spending. Many individuals feel the need to grab those extra last-minute items and gifts that aren’t on their list. These additional on-the-spot purchases quickly become a financial drain on your spending plan. To avoid impulse buying, use your preplanned list of items and their amount when shopping. Be sure to stick to your plan!
Although impulse buying isn’t as prevalent with online shopping as with in-store shopping, retailers are coming up with creative ways to get you to make impulsive buying decisions online. For example, those last-minute deal pages, gift guides, and collections/grouped product advertisements are retailers’ attempts at getting online shoppers to do more impulse buying.
As we enter the holiday season, many individuals will look upon this time as a highly stressful period due to holiday spending. Uncontrolled holiday spending can drain your finances, but controlled spending can help you realize the joy and peace the season brings. Remember you can take action to control your spending during the holiday. Communicate with family and friends, create and use a holiday spending plan, do your research, start early, and avoid impulsive buying to control holiday spending.