Amidst all the season’s well-wishing and good tidings is an undercurrent of credit card debt and overspending. The holiday season tends to only add to the stress of savings and budgeting. Despite attempts at fiscal discipline, this year Black Friday subsumed Thanksgiving Day and it is evident we are thankful for sales. Yes, household debt is far better than a decade ago, but again many people rushed into stores to spend money. Rather than letting this year’s holiday season cause financial hardship, here are some simple tips for staying the course.
First things first, watch out for impulse purchases on sales. While I can’t argue with the fact that the more you buy the more you save when it comes to the once in a lifetime sale, take some time to think about whether the purchase actually makes sense. Do you really need a Kindle, a Nook and an iPad just because they’re all on sale? Sure, your New Year’s resolution may be to read more books but we all know how that ends. Three battery drained e-readers later and you still have the same books in the queue you couldn’t wait to download in January.
A good way to avoid this is to make lists and stick to them. That way you have an attack plan and it makes it much easier to say no to the impulse sale. Another good way to stick to your plan is to avoid purchasing things for yourself. There is no doubt that you know what you want and sometimes the sale seems too good to pass up. I suggest pawning this impulse off on another. A subtle (or not so much) reminder that something you really want is on sale may result in a win-win; you get the gift, they get the bill.
Now for the people who don’t like shopping. You ignore sales and you buy everything at the last minute. That is a dangerous strategy because guess who noticed? The manufacturers and you pay for it. The best case scenario is to spread the holiday shopping over the entire year rather than one massive month of charges but of course that didn’t happen. The real winners of the holiday season are the credit card companies. Fortunately for you though, many internet sites offer free shipping, the same sales as in stores and some even enable you to avoid sales tax if they don’t have a physical location in your state. Take advantage of these internet sales to save money, save gas, avoid holiday crowds and make your family and friends happy. I would be remiss if I failed to caution you against potential identity theft during the holiday season, so be sure to monitor your accounts.
There we have it, a few relatively simple ways to stay smart and fiscally sound during the holiday season. I hope you found this year’s topics helpful and I wish you financial success. Until next year, Happy Holidays.
This article is meant to be general in nature and is not intended, and should not be construed as personal financial advice. Please consult your financial advisor prior to making financial decisions. Gary Parsons is a Financial Advisor with U-Vest Financial®, a separate entity from Waddell & Reed and can be reached at 850.300.7055. Waddell & Reed, Inc., Member SIPC