It’s that time of year again. November is the start of the holiday spending blitz. While many of us vow to start our holiday shopping earlier each year, the reality for most of us is that our lives are busy, and we tend to put this off until the holidays are near.

With Black Friday and Cyber Monday coming up in November, it is time to make a holiday shopping plan.

Create a Holiday Shopping Budget

It is very easy to overspend during the holidays. It is a time of great joy and we enjoy giving gifts to family and friends that we think will make them happy. This desire to bring joy to family and friends can easily lead to overspending on gifts during the holidays.

In order to keep your holiday spending in check, it is a good idea to create a holiday shopping budget. A good place to start is to list everyone that you will be giving a gift to.

Next, take a look at your overall budget and financial situation to determine how much you can afford to spend on holiday gifts. This is an important step, and you should be as realistic as possible. This figure should be the amount you can afford to spend in cash right now, not what you are able to charge on a credit card.

Once you have your holiday spending budget in place, you can then go down your list and prioritize these names. Close family will likely have the highest priority and will be the ones who you spend the most on. You might even go through the list and assign a dollar amount to each person’s gift. When shopping, refer to this list and try to stay as close to the dollar figures for each person as possible.

Use Credit Cards Wisely

It is fine to use your credit card for some or all of your holiday shopping, but doing so does not negate the need to watch your spending and to stick to your budget. Credit card bills do need to be paid and the last thing you want hanging over your head as we move into the new year is a bunch of credit card debt.

Whether paying by credit card or with cash, be sure to adhere to your spending budget for each person for whom you are buying gifts.

Using a credit card can have some advantages, including taking advantage of cash back offers that may be offered this time of year and the added accumulation of points on your card if the card offers a program like this. Either way, consider these perks a bonus instead of a way to justify overspending your budget.

Preventing Holiday-Induced Financial Stress

Many retailers and shopping sites offer incentives such as sales and other discounts to encourage people to shop with them. These offers are tempting, but be sure to stay on track with your holiday spending budget no matter how tempting the deal is.

It is critical to stick with your holiday spending budget to help make the holidays less stressful. You already have enough going on with shopping, planning travel and get togethers, which can distract from realizing that you have overspent. There is no worse way to start the new year with a mountain of debt that far exceeds your spending budget.

As part of tracking your holiday spending during November and December be sure to set aside the funds to cover any credit card debt that has accumulated during the holidays. This will help reduce any post-holiday financial strain and will help you start off the new year on a positive note financially.

We all want to have a happy holiday season. Giving family and friends gifts they will love and cherish is rewarding, but it is important to do this within your financial means and not to let holiday spending put a damper on your overall financial situation.

Need help with the mechanics of setting a spending budget? Contact your Wedbush financial advisor.

Disclosure 

Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor.  

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.  

Third-party entities, companies, and organizations that may be referenced on this page are not affiliated with Wedbush Securities or any of its affiliates. Opinions mentioned are that of the third-party and not of Wedbush Securities, the financial adviser and/registered representative, or any of our affiliates.

Investment products involve investment risks including potential loss and are not insured by any federal agency, are not deposits or obligations of, or guaranteed by any financial institution and may involve loss of value. Past performance is not a guarantee of future returns. Any implementation of recommendations or investment strategies may generate fees, expenses, charges or commissions, based on the products and services. Any organization, company, individual, or third-party entity that are referenced on this page are not affiliated with Wedbush or any of its affiliates. The content on this page might not necessarily reflect the expertise of the investment professional and should be used for informational purposes only; the information provided on this page is not intended to be used as a recommendation of any kind, as it does not constitute an offer or advice.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates and are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by contacting your Wedbush Financial Advisor and/or Registered Representative.
​​​​​​​Wedbush Securities does not provide tax or legal advice. Please consult your tax advisor or legal professional for your specific situation. 

Securities and Investment Advisory services are offered through Wedbush Securities, Inc. Member NYSE / FINRA / SIPC.