Thanksgiving and Christmas holidays are the most active shopping seasons in the U.S. In fact, the National Retail Federation predicts that shoppers will spend between $843.4 billion and $859 billion in just November and December this year. Retail companies want to cash in as much of this as they can. They are increasing online and instore promotions to entice shoppers to spend their hard-earned money. Unfortunately, retailers have gotten so good at this that shoppers end up overspending, or worse, financing items they really don’t want or have use for. After a year of practicing discipline and getting your finances together, you don’t want to end up in a situation that would undo all your hard work. Continue reading so you avoid the biggest holiday shopping mistakes this season.
Ignore Your Budget/Overspend
A budget is the best tool used to keep your finances in order. Without a budget you have no idea what your financial standing is. Therefore, if you don’t have a budget for the holidays, you cannot tell if you’re overspending. You may be putting yourself into a compromising position and not notice until the bills need to get paid. While it may seem like an overwhelming task to embark on, budgeting can be really easy. In fact, here is a quick blog on how to get one started [How To Create Your Personal Budget].
Use A Credit Card To Shop
Using a credit card to shop is one of the biggest holiday shopping mistakes you can make. An MIT study has shown that people tend to spend more money when they are using a credit card rather than spending cash. This can be particularly destructive if the person already has poor spending habits. Furthermore, credit cards are just short-term credit extended to the user by the credit card issuer. That means, not only are you stepping outside of your budget, but you’re also spending money that is not actually yours. When shopping, be sure to use your debit card or cash for your purchase.
Wait Until The Last Minute
If you fail to prepare, you prepare to fail. Waiting until the last minute to shop can guarantee one of two things; you will either purchase gifts that you didn’t want, or you’ll overspend because you do not have time to shop around for bargains. If you plan your shopping trip in advance, you can plan around sale dates, look for more affordable alternatives and find gifts you know your loved ones will remember and appreciate. Waiting until the last minute to shop also runs the risk of your gifts not getting to their destination on time. No one wants to go through the embarrassment of delivering Christmas gifts after Christmas because they procrastinated.
Finance Your Gifts
Not all credit is bad credit, but financing your holiday shopping is almost guaranteed to be a bad credit decision. Klarna has innovated the online shopping space by allowing shoppers to split their purchase into 4 equal payments. This makes your shopping total seem significantly smaller than it actually is, thus increasing the chances of you overspending in the moment. You’ll then be saddled with paying the bill all the way into spring 2022. Do not finance your gifts! Purchase what you can afford and if you can’t, be creative with your gifts this year. If you’re looking for frugal shopping ideas click here!
Try To Keep Up With The Jones
Many people spend their lives trying to convince others they are living their best life. The only person you should be trying to impress is you. If you want to achieve the life you’ve always wanted, you’ll have to live below your means, save, invest and work hard to get it. By living your life by someone else’s standards you’re hindering your progress to your own dream. As a matter of fact, many people wearing the latest designer outfits and technology are either doing it on credit or on someone else’s dime. Strive to set your own standards. Standards that are achievable and will motivate you to achieve the life you’ve always wanted. Trying to keep up with the Jones is on of the biggest holiday shopping mistakes you can make.
There’s still some time to complete your holiday shopping! But be sure you’re not making the biggest holiday shopping mistakes so that you can start 2022 on the right financial footing.