Not long after the holidays end, the bills arrive for what was spent on those gifts. NerdWallet’s Kimberly Palmer called it a financial hangover, which can dampen the festivities of ringing in the new year.
She recommended that the next time you are buying a gift, plan ahead, knowing that you will be spending money you wouldn’t normally spend.
“Starting as soon as January, we have the first three-day weekend of the year and it’s really those three-day weekends where we see the biggest sales,” Palmer told Show Me Today. “So, if you have any more expensive item that you want to purchase for the holidays, it can make sense to buy it early.”
Palmer said that it’s never too early to plan ahead for the holidays, adding that people often go into the holiday season without a plan.
“Sometimes this means sitting down and talking with your partner if you’re planning these expenses together,” she explained. “From there, if you say ‘okay, we want to spend X total for the holidays,’ then you can break it down. So, if you have this total amount to spend, you have this amount to spend per gift, per person.”
Once the holiday gift list is written out, chances are it may be a bit more expensive than originally anticipated. One way to get around that is to shop online.
“Everything around us in stores is designed to get us to spend money,” Palmer said. “There’s a sense of urgency that you have to hurry up and get this discount, (that) there’s limited quantities. Even the scents that department stores, for example, put into the air can make you want to spend more money.”
Lastly, if you don’t have cash to pay for gifts, she recommended avoiding the credit card at all costs and to try the “buy now, pay later” option.
“So instead of paying the full costs up front, you’re breaking it into several payments,” she said. “In general, you want to be really careful about any kind of debt, including buy now, pay later. But if you’re going to choose one of those and it’s for something you really need, the buy now, pay later, as long as you’re paying on time, you’re avoiding a lot of that interest and fees.”
She recommended establishing a budget where every dollar goes toward expenses, savings, or bill repayment.
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