The holidays are an exciting and meaningful time to gather. But they can also be a time of financial risk and overspending. That’s why MyCG has compiled a list of tips to help you and your family save for the holidays. As a caveat, MyCG are not financial experts, so please consult your financial advisor for any specific advice. Derived from various resources from the Consumer Financial Protection Bureau, (CFPB), these suggestions are meant to be general guidance for you and your loved ones.
Have a plan
The foundation of wise holiday spending and saving is having a budget. Take a careful look at your income, debts, savings goals, and other financial circumstances and let them guide your budget. Setting guardrails will make it harder to overspend and easier to save.
Don’t sleep on inflation
Inflation is on the rise. Coupled with pandemic-related supply chain issues, that means gifts are going to be more expensive this year. A bundle of items that cost $100 last year would cost $108.20 this year, according to a recent CNBC estimate. Make sure you factor that into your budget.
Talk about it
Discuss your expected holiday spending with your spouse, partner, or loved ones. Open communication is key to setting practical expectations and saving successfully. That includes explaining the basics of financial well-being to your children, because good financial habits start early. The holidays are an opportunity to help your children distinguish between their wants and needs and is a chance for them to develop smart saving habits.
If you’re a procrastinator, read on. Putting things off until the last minute may work in other parts of your life but waiting until right before the holidays to do your shopping will hurt your savings account. Shop ahead to get the best deals and avoid panic buys and the peak of the holiday rush. Shopping ahead will also allow you ample time to compare prices, do market research, and find the best gifts for your loved ones—or yourself. And given ongoing supply chain delays, you’ll want to make sure your gift plans aren’t sabotaged by shipping delays.
Beware of credit cards and paying later
It's tempting to open new credit cards this time of year. But that can be a quick path to debt. Options to pay later often hold high fees and can be too good to be true. In fact, pay later “loans may not have the same consumer protections as other forms of credit” and might actually cause you to overspend.
Beware of scams
Exciting though the holidays may be, it is important to always be vigilant about scams. Never give out your personal information over the phone. Be wary of any emails asking you to verify your social security number or your credit card numbers. Finally, be sure to talk to your loved ones about these common scams so they stay safe.
Be kind to yourself
No one is perfect. We all fall prey to impulse buys and purchases we regret. The key is to use slip-ups as a lesson for the future and act on it. It can be tempting and easy to beat ourselves up, but no good comes from it.
MyCG wishes the Coast Guard workforce and community a happy, healthy, and financially savvy holiday season!