Tis The Season For Overspending: 5 Tips To Help You Avoid The Ghost Of Holidays Past

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Holiday Debt_Insight.jpgThe holidays are my favorite time of year—bonding with family, watching holiday movies and eating way too much food. It’s a time to reflect and to start thinking ahead to the new year. For many, it’s also a time for overspending, which can lead to haunting credit card bills. According to the National Retail Federation, consumers plan to spend $967.13 this year on holiday gifts, food, decorations, flowers, greeting cards, and other non-gift items. If more than half of Americans have less than $1,000 in savings, then it begs the question: How can we spend almost $1,000 on the holidays?


Have no fear; I have a holiday gift for you—a gift that I hope will save you some heartache in January and help you avoid the Ghost of Holidays Past. Here are my own tried-and-true financial tips to help you avoid overspending:


Tip 1: Spending time with family is worth more than anything you can buy. Don’t feel pressured to buy gifts for everyone or feel guilty if you don’t. Instead, make time to be with family. Time is something we can’t get back and is worth more than gold.


Tip 2: Consider making gifts. Some of the best gifts I have ever received were homemade. The gifts someone put their time, effort and heart into are still hanging on my wall or displayed somewhere in the house. These are the gifts that make me smile.


Tip 3: Create a reasonable plan and stick to it. Make a seasonal spending budget, and set

expectations with family and friends—especially your children. Be sure to account for gifts, food, decorations and travel. If you use a credit card for spending, pay the balance in full as soon as the bill comes, or at least within a month or two to avoid excessive interest charges. (Note: Using a credit card for holiday shopping can provide benefits such as identity theft protection, extended warranties, rewards, etc., and is perfectly fine as long as you don’t overspend.) Already overspent during Black Friday and Cyber Monday? Ask yourself if it was really worth it. It’s not too late to return a few things.


Tip 4: Take advantage of deals, but be sure they are a better deal for you than the seller. Have a shopping strategy, comparison shop online, make sure the offer is legit, and only buy things that are on your list. It’s easy to get sucked into holiday discounts and buy things that aren’t really needed, like a flat-screen TV when you already have six in your house (guilty as charged). I would also suggest avoiding the deals you are offered in the checkout line (or online), such as an extra 20% off when you open a retail store card. This can have a negative impact on your credit and could lead to overspending. If you don’t pay off the balance in full, you will likely pay more in interest than you received as a “deal” for signing up.


Tip 5: Start planning for next year. Build the amount you expect to spend for the holidays into your budget. Set aside an amount each week/pay period/month that can be used when the next holiday season rolls around. Just think, $10 a week (two trips to Starbucks) would add up to $520 over the course of a year. That’s more than half of what the average consumer is expecting to spend.


Make this holiday season enjoyable and without regret. These five tips are my gift to you. On behalf of USAA, I want to wish you all a safe and happy holiday season.


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