By Eric Tashlein
Your Finances
Get ready for the biggest holiday spending season ever: The National Retail Federation has predicted Americans will spend a record amount on Christmas gifts and other holiday items this year.
The NRF forecasts holiday retail sales in November and December will increase between 3.8 percent and 4.2 percent over last year, to reach a record total of between $727.9 billion and $730.7 billion.
Record employment and an expanding economy could lead many people to overspend this year. A separate NRF survey last year showed the average American planned to spend $1,007 on gifts, cards, flowers, decorations and food (survey results for 2019 were not available at press time). Multiply that by an average 4 percent and the spending average would reach $1,047 this year.
It’s great to be in a giving mood, but you don’t want to bust your budget after working hard all year to limit spending and boost your retirement savings. Here are some ways to keep Christmas spending under control:
Cut where you can. Unless you’ve already cut spending to the bone, search for ways to offset holiday expenditures. For instance, if your entertainment budget includes going to the movies and renting movies, think about going on a “movie diet” until the new year kicks in. Choose to make a healthy meal at home rather than eating out, say from now through Dec. 15.
Make a mini-financial plan. Decide how much you are willing to spend on holiday items and write out a seasonal budget, including limits on spending on gifts, cards, food and holiday-related activities. How much will you spend per gift?
Set aside cash. All the good intentions in the world can go out the window when you’re at the store with a credit card in hand. Resolve to pay for everything with cash, check or debit card until you’re safely through to 2020.
Get started early. If you wait until Dec. 15 to start your Christmas shopping, you will be under more pressure to give in to “impulse buying.” Hit the mall early and get some purchases under your belt to avoid the stress of last-minute decision making.
Don’t buy the hype. If you find it fun to go shopping at midnight on Thanksgiving Day, that’s fine, but studies show that Black Friday and other special sales days generally don’t produce better prices than most regular shopping days. Retailers offer sales throughout the holiday season.
Offer a personal touch. Some of your family members and friends might appreciate a homemade gift more than something you buy at the store. Traditional homemade gifts include baked goods, photo collages and crafts such as jewelry, ornaments and stitched or knitted decorations or blankets.
Eric Tashlein is a Certified Financial Planner professional and founding Principal of Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or through connecticutcapital.com. This is for informational purposes only and should not be construed as personalized investment advice or legal/tax advice.