CHICAGO, November 26, 2019 – The hype around Black Friday and the holiday shopping season seems to always start earlier and promote bigger bargains. Motivated shoppers in the U.S. spent more than $700 billion during last year’s holiday season, according to the National Retail Federation.
While the temptation to start buying gifts can be too hard to ignore, it’s smart to have a strategy for avoiding money mistakes that could hurt long after the holidays are over. The Illinois CPA Society suggests staying clear of these seven common holiday spending traps:
- Not having a budget – Determine how much you can spend before making your first purchase. A simple list that includes prices for gifts, cards, holiday decorations, and other seasonal spending items can be a big help.
- Not having a gift list – Knowing what gifts to get ahead of time can help you avoid overspending and making impulse purchases. A gift list can also help you keep track of when and where things go on sale.
- Buying because of hype – “Door buster” deals are designed to get you caught up in the holiday shopping craze. If it’s not an item on your gift list, steer away from these impulse buys just because the price looks too good to pass up.
- Overusing credit cards – You could end up paying much more for holiday gifts over a longer period of time if you load up purchases on credit cards and only make minimum monthly payments at high interest rates. Try paying for gifts with cash or debit cards. And if you do use credit cards, try to pay off the balances each month.
- Signing up for store credit cards – Big discounts or special financing deals may look attractive when applying on-the-spot for a store credit card. Beware of potentially high interest rates and other particulars in the fine print that may drive up costs of carrying a balance on your new card.
- Forgetting your “free money” – How many times have you found a gift card or coupon after buying a gift? Save money by keeping track of gift cards and coupons you can still use. Also take advantage of credit card reward points or cash back bonuses.
- Waiting until the last minute – Give yourself time to shop around for the best deals and keep your options open. Don’t settle for the last overpriced item on the shelf.
With a little bit of planning and the right mindset, shoppers can avoid common financial traps that can take the joy out of the holiday season.