Holiday spending has many consumers saying “bah humbug .” A national survey by Experian finds that shoppers risk debt by not budgeting properly for the holiday season
‘Tis the season to be jolly — but it’s not so jolly for many consumers, as the holidays can cause financial stress and often put consumers into debt. According to a nationwide survey from Experian, the primary reason is that most consumers don’t create budgets and are unprepared to cover added expenses beyond gifts, such as postage costs, hostess gifts, gift-wrapping supplies and greeting cards.
Failure to develop a budget (62 percent of survey respondents) is a main detractor from holiday enjoyment. Fifty-six percent of those surveyed say they spend too much during the holiday season, while 55 percent say they feel stressed about their finances during the holidays.
Holiday costs add up. Respondents reported spending an average of $288 during past holidays on unexpected expenses, and 28 percent actually spent more on these than on gifts. These added expenses impact consumers’ finances, with 31 percent saying they have actually accrued credit card debt as a result.
“What consumers don’t realize is that after the merriment of the holidays they won’t be having such a happy new year, because they will be saddled with debt,” said Rod Griffin, director of Public Education at Experian. “With a little bit of planning, consumers can save themselves a lot of stress and put themselves in a better financial position in 2017.”
5 Tips for Holiday Budgeting
1. Make a gift list: Create a list of the people you need to buy presents for and how much you will spend on each person. Giving yourself a set amount at the start will help you stay focused when you’re on the gift hunt.
2. Start early: By avoiding the Christmas Eve shopping rush, you’ll find better deals — and avoid overspending under pressure.
3. Budget for unexpected expenses: Look outside your gift list and think about the ways you spend extra money around the holidays. Hostess gifts, baking and cooking supplies, and postage costs can add up to big expenses.
4. Keep track of spending: Make sure you track every dollar you spend, and track spending as you go. This will hold you accountable.
5. Be careful with credit: Use credit cards only if you are sure they will not tempt you to stretch your budget and can be paid in full when you receive your statement. Also, check your credit score periodically to see how your spending is affecting your score.
Want to know what kind of holiday spender you are? Visit the Experian Credit Education blog to take our interactive quiz.
For more information on budgeting, as well as how debt can affect credit scores, visit the Experian Credit Education blog. Consider enrolling in a credit monitoring service such as Experian CreditWorksSM, which can help you better track and manage your credit report and score.
About the Survey
The online survey was conducted by Edelman Berland on Experian’s behalf from Oct. 5 to 12, 2016, among 1,000 adults 18 years of age or older who reside in the United States.
This article was written by Experian. To find out more about Experian, please visit http://www.experianplc.com or watch their documentary, “Inside Experian.”