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The holiday season is here, and so are the soaring expenses.
With rising prices and holiday shopping costs piling up, experts urge people to plan early and spend smart to avoid holiday debt.
According to a report from the National Retail Federation, holiday spending is expected to increase between 2.5% and 3.5% over 2023, which accounts for $989 billion. This includes gifts, decorations, travel, and entertainment. Considering the inflation and the economic conditions, financial experts recommend several practical strategies to control holiday expenses.
According to them, creating a detailed shopping list helps prevent impulse purchases that save huge bucks on unnecessary spending. Starting your holiday shopping months in advance can spread costs and give access to early sales. Last-minute shopping often leads to overspending and settling for less suitable gifts.
Digital tools have become the real saviors these days. Browser extensions like Smarty and Rakuten automatically apply available discounts and rebates to online purchases. Such simple tools can help you save hundreds of dollars over the season. Signing up for loyalty programs and clipping coupons can provide additional savings at brick-and-mortar retailers. Some stores even offer special member-only discounts during the holiday season.
For budget-conscious consumers, financial advisors suggest considering alternative gift approaches that can significantly reduce expenses without destroying the holiday spirit. Experience-based gifts, such as shared activities or outings, can create lasting memories while lowering costs. Handmade gifts offer another cost-effective option that adds a personal touch many recipients particularly value.
"We're seeing a growing trend towards meaningful experiences over material gifts," notes Sarah Thompson, consumer behavior specialist. "Many families find that sharing experiences creates more lasting happiness than exchanging traditional presents."
Some families are investing in their children's futures rather than purchasing traditional gifts. Consider investing in a 529 college savings plan or deposit in their custodial accounts to ensure long-term financial benefits. This one decision can turn a modest holiday gift into significant educational funding.
The rise of online shopping has transformed how consumers approach holiday spending. 67% of holiday shoppers plan to opt for online shopping this year, taking advantage of free shipping offers and digital deals. However, the key here is to avoid holiday debt. Setting realistic spending limits and sticking to them helps ensure the season remains joyful without creating financial stress.
Consumers seeking additional guidance can consult financial advisors or utilize budgeting apps to track holiday spending. Experts also recommend reviewing previous years' spending patterns to create more accurate budgets and identify areas for potential savings.
Financial planners are urging people to start planning early this holiday season and consider budgeting to ensure celebrations remain festive.
