Another Christmas Tradition… Overspending
SALT LAKE CITY – Do you feel you’re being pushed to spend more than you want on Christmas? If so, you’re not alone. A recent survey shows almost half of Americans feel they’re pressured to spend more than they’re comfortable with.
Financial planners would say we all have intentions of making a holiday budget and following it to a tee. However, several things get in the way of that happening. For instance, Smedley Financial Services Vice President of Wealth Management Mikel Aune says last parents spend a lot on the last minute gifts their kids just “have to have.”
Aune says “[Customers] think they can get it, and they don’t really consider how much they have in the bank. So, they get the bill in January and then they go, ‘Oh, shoot, how am I going to take care of it?’”
Traditionally, many people across the country wait until the last Saturday before Christmas to complete their shopping. Last year, The Business Journals reported more than half of all customers wait for “Super Saturday.” Aune says if you’ve finished your shopping, you should probably avoid going to a store that has any kind of sale. He says plenty of his clients have been convinced to buy something they didn’t need simply because it was cheap.
“There was one lady I knew that went out and bought 20 mini crock pots because they were ten bucks a piece. I said, ‘What are you going to do with that?’ She said, ‘I don’t know yet,’” he says.
Let’s say you’re one of the millions of Americans who have already overspent. What do you do? Aune says it may be helpful to start making snowball payments, which is when you pay off the smallest debt you have, then take that money to pay off larger debts.
Plus, Aune says, “You can also go on a spending freeze. Just say, ‘For the next month, we’re just going to buy the basics of food and groceries, and we’re going to tight on that, as much as we can.’”
He also recommends you set up a separate savings account for big purchase items, like holiday shopping. Plus, there are budgeting apps that people could easily get online, but, he says, “The problem is getting people to use the budgeting apps. Most of the time, if you’re using the budgeting app coming into Christmas, you’ve already set money aside for it.”
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