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Gifts, decorations and travel are just some of the expenses of the holidays.
CELINA - Although the holiday season is well underway, it's never too late to check gift lists and make a plan before shopping.
The National Retail Federation in October forecasted that winter holiday spending was expected to grow between 2.5% and 3.5% over 2023. That equates to between $979.5 billion and $989 billion in total holiday spending in November and December, compared to $955.6 billion during the same timeframe in 2023.
The holidays are a huge spending event for most households, and doing it on a budget is never easy. The Daily Standard gathered these tips from state and area experts to help reduce the threat of potential impulse purchases and post-holiday financial woes.
Realistic shopping and spending can put terrific gifts under the tree.
Plan gifts thoughtfully while also paying attention to price. This will help curb impulse purchases and help shoppers to stay on budget, according to a news release from the Ohio Department of Commerce.
"Make a list of all the folks that you want to buy for," Kerry Martin, applied economics lecturer and program coordinator at Wright State University, said. "That way you can allocate how much you want to spend for each person, and you have to really stick to that list."
On their list, shoppers can write down everyone they intend to buy gifts for, along with price ranges and potential gift ideas. This preparation can help consumers find the best deals and avoid impulse purchases.
Prior to buying gifts, it's important for shoppers to determine what they can actually afford to spend on gifts, according to the ODC release.
"Start by reviewing your current financial situation and identifying other upcoming expenses," the release states. "Setting a spending limit will help ensure you don't dip into savings meant for emergencies or incur debt."
The release also suggests shoppers then think about essential holiday costs, including gifts, decorations and travel.
"Factor in your day-to-day expenses to establish a comprehensive budget," the release states. "The goal is to allocate a reasonable, manageable amount that aligns with your financial capabilities while still allowing for festive celebrations with family and friends."
Instead of using a debit or credit card, Martin suggests shoppers stick to shopping with cash.
"The reason cash works best is because in economics we know that people tend to feel the pain of giving cash away or paying for something with cash more than they do with swiping a credit card," she said.
One of the most significant benefits of the cash method is the tangible connection it creates with money, according to www.finance-monthly.com.
"When you pay with cash, you physically see the money leaving your wallet, which can make you more conscious of your spending decisions," the website reads. "Unlike using a card, where transactions can feel abstract, cash payments can make you more deliberate about your purchases, reducing the likelihood of impulse buys."
Credit cards can be a convenient tool for holiday shopping, but they require careful management, according to the ODC release. Limit credit use to essential purchases and avoid accumulating debt. Monitor statements for unauthorized charges and report them promptly.
When it comes to last minute shopping and staying on a budget, consider gifts of experiences rather than material gifts.
"Such as giving a gift card to your sister to her favorite restaurant with the offer to babysit her kids while she and her husband go out to dinner, or plan an outing such as to an escape room session with your group of friends," Martin said. "It is much easier to control spending on these types of gifts as well as have more options to consider than trying to locate last-minute, on-budget material gifts."
One of the most effective techniques for shoppers who really want to control their holiday spending is to budget with envelopes, Martin said.
The cash envelope system allows consumers to track how much money they have in each budget line for the month by keeping their physical cash put away in labeled envelopes.
Martin also stressed that if there's a good deal on an item, shoppers don't need to spend all of their allotted funds.
"I know at times consumers will be like, 'Hey, I've budgeted $50 to buy a gift for my brother. I found this great gift for $30, now I need to spend $20,'" Martin said. "Rather than just, if you can get something that's fantastic that's less than the $50, just pocket that $20 or use it in a different capacity on maybe a different gift for someone else."
The end of the 2024 holiday season is the best time to start preparing for 2025.
"Once the holidays are over, that is the absolute perfect time for folks to kind of get a head start on next year," Martin said. "While it's still fresh in their minds to kind of reflect on, 'Where did I overspend? How can I start putting a holiday fund together for next year? How much did I overspend? What did I ideally want to spend?' And then, you know, a lot of banks have like separate accounts that you can open up that are specific for like a Christmas fund. They'll automatically have (money) transferred in (the account) every month."
