It's Almost Halloween, So Let's Talk Christmas

Football is in full swing and the weather is getting cooler – surely you know what that means. It’s time to start thinking about Christmas. Perhaps you are reading this on your phone while waiting in line at Starbucks, preparing to buy your first Pumpkin Spice Latte of the season, but before you know it, you’ll be dreaming of Peppermint Mochas instead. Even if you’re the “Bah, Humbug” type of person who regularly posts Facebook rants about the neighbors putting up their lights before Thanksgiving, making financial plans for the holiday is still a really good idea. So, while it might be too early to hang a stocking, but it’s never too early to develop a plan to keep spending in check.

Recent studies have pegged the price of the holidays at roughly $300 per child, while one in 10 shoppers admit to spending over $500 on gifts for their children. Overall, Americans spend about $600 billion on Christmas, which comes out to around $2,000 per person. This includes decorations, hams, ugly sweaters and whatever else you tend to buy. That’s a lot of money.
 
Wait a minute. It’s not even Halloween! So why are we even talking about holiday spending now?  Halloween is exactly why we should make plans now. American spending on Halloween increases annually. We spend about $7 billion on Halloween, including $350 million on costumes for our pets!  It’s often easy to overspend in October. If you let that lead into an indulgent Thanksgiving in November, you can find yourself putting all your Christmas spending onto a high-interest-rate credit card.
 
Wondering exactly how bad it is to put all your Christmas purchases on a credit card?  It’s likely worse than you think. It’ll cost you about $200 per month to pay off an average Christmas debt in time for next year if using a typical high-interest credit card. And if you don’t pay it off by next year, you’re suddenly trying to pay off two holidays at once. That’s bad news. Paying around $400 in interest charges and fees over the course of the year is essentially throwing away $400 you could be putting into Christmas Club Savings Account.

Wondering how you should go about making sure that the holidays are filled with joy and not debt?  It’s all about having a plan. Do you have a budget for holiday shopping?  Do you know how much you have spent in previous years? What about a way to track holiday spending once you have set a budget?  Remember that Christmas spending doesn’t have to be an all-or-nothing proposition. You can combine savings and budgeting to attack holiday spending from several angles. Start now, and by Christmas you’ll have a well-stocked war chest, or in this case, toy chest, to give you a variety of options.