Valley Finance Professionals: Make a Holiday Budget to Avoid Breaking Credit Cards |  Business

Valley Finance Professionals: Make a Holiday Budget to Avoid Breaking Credit Cards | Business

The winter holidays are here. Need a reminder? Check your bank statements.

The National Retail Federation estimates that the average American will spend about $ 998 on Christmas gifts, decorations, meals and a few things for himself. The total amount falls around $ 50 below the pre-pandemic peak in 2019.

Cardify, a market research platform that tracks consumer transaction data from its parent company with mobile rewards, Drop, surveyed 2,000 Buy Now, Pay Later (BNPL) platform users. It found that 54% of them will charge a credit card for gifts this holiday season.

It falls between 65% debit cards and 45% BNPL plans popularized through platforms like PayPal and major retailers like Amazon and Home Depot. Cash? According to Cardify, 31% will use the old currency to make a purchase. Of course, there is crossover within the data as the survey respondents chose more than one option.

Christmas is coming in less than two weeks. Still, Justin Buttrick, president and founder of Vision Wealth Advisors in Lewisburg, said it’s not too late to make an spending plan. It can be difficult, but it’s a great way to avoid overloading one’s personal finances and a great way to relieve anxiety, Buttrick said.

“They may not like hearing the word budget around the holidays. It may make them feel more like Ebenezer Joakim than Santa Claus, but making a budget does not mean you can not be generous,” Buttrick said.

BNPL can help, but shoppers must adhere to the conditions. Make the installment payments on time and enjoy an interest-free purchase. Failure to comply with the conditions risks fines and extra dollars.

“Assuming you’re responsible and not a debt burden, I see no problem using it,” Buttrick said. “For those who have no trouble accumulating debt, it can be a useful tool.”

Then make a list. Seriously. Check it twice if you want. Decide who gets gifts, Buttrick said, set a limit and stick to it. It does not have to be for the ear, he said, but at least create a reach to adhere to.

Oh, debt. The average American credit card holder has enough of that. An analysis by Motley Fool showed that the average credit card debt amounts to $ 5,525. Now it has fallen by $ 968 from before the pandemic. Total U.S. credit card debt also fell to $ 787 billion, according to the analysis.

But this comes as a widespread bank rate survey last year showed that nearly 60% of U.S. adults could not make a $ 1,000 savings purchase from savings if faced with an emergency.

Stacy Mastrolia, an associate professor of accounting at Bucknell University, teaches personal finance to seniors at the university.

Mastrolia looked beyond Christmas 2021. She advises people to plan next year now. Set aside $ 100 a month, or whatever amount is comfortable. Do this by cutting off an unnecessary purchase each week. A pizza night here and there, she said. It will create $ 1,200 when Christmas wishes come in the coming year.

In the immediate term, Mastrolia agreed with Buttrick to make a list, set a limit and stick to it.

She suggests making a round of finding appointments.

Gift ideas? How about a framed personal photo, perhaps, or journals and books?

Giving one’s skills as a gift may cost nothing and mean so much more to the person at the other end.

“I regularly give people free tax service. For me, it’s not a big deal, but for others it’s a few hundred dollars,” Mastrolia said, emphasizing creative planning for gifts skills and time.

Families with children who have grown up could consider switching to the secret Santa Claus method: set a spending limit, give and receive a gift anonymously.

Another cost-saving consideration: cut spending on other areas this month.

“Do not make December the month you get your hair dyed, or go out to dinner with the family,” Mastrolia said.

And, she said, keep in mind that gifts will not repair broken relationships. Do not use to advise penance.


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