Financial stress is common during the holidays as people work to give gifts to loved ones, cook larger than normal meals, take trips and more. What affects the willingness and ability to spend and how can you avoid overspending your budget?
The economy and self-imposed expectations can influence spending habits when people are browsing while shopping for vacation. Inflation is also adding to the anxiety buyers face this year.
Preparing for supply chain issues, practicing a budget that you can stick to, and focusing on the importance of the season could save you money and stress in the long run.
“I just think we always have to remember that the holidays are important times for each other and not a good time to push your limits where you have to pay the consequences afterwards,” said Dr Randal Ice, professor of finances Barnabas at the University of Central Oklahoma. “You don’t want to have a financial Christmas hangover.”
Factors Affecting Vacation Expenses
Consumer confidence, or people’s feelings about their finances, the general economic situation, unemployment and savings capacity, determines willingness to spend, according to Dr. Travis Roach, chairman of the economics department. from the University of Central Oklahoma.
âIt’s just a good indicator of sentiment,â Roach said. “It’s funny though, because it depends on who you ask.”
Still buying gifts? :Experts say start now
Roach said current owners have seen their property increase in value, which has increased consumer confidence among this segment of the population. Meanwhile, those looking to buy a home are less confident due to rising values ââand sometimes prices outside the markets in which they intended to buy.
These factors affect individual confidence and willingness to spend even as overall consumer confidence is on the rise. Roach said the buying increases seen last Christmas were spurred by fiscal policies designed to ensure the pandemic recession was short-lived.
âHe did what he was supposed to do, he helped people put more money in their pockets,â he said. âEven for those who didn’t lose their jobs, they had more discretionary income than they could spend, putting more money back into the economy, which is why we’ve seen such a rapid recovery. ”
The second pandemic holiday season brought with it a new problem to navigate, supply chain issues. Roach said these issues are creating increased demand which is causing the price increases in the store. Roach said prices for the items are expected to start falling as the global supply chain readjusts, creating more competition and pushing the market back into equilibrium.
âWe’ve had this supply chain problem because you know we’ve shut down this system and it takes a long time to get the machine back on track,â he said.
How to avoid overspending while on vacation
Overspending while on vacation can be hard to avoid unless you plan for it, Ice said. There are several things to keep in mind when shopping and planning for gifts during the season.
Budget and avoid credit cards
People who don’t budget throughout the year are much less likely to commit to budgeting for vacation spending, Ice said.
âYou should be balancing your checkbook and monitoring your spending all the time, but if that is a problem for you, Christmas is an easy time to lose control of things,â he said.
If you know you’re not the budget type, Ice suggests using cash and avoiding credit or debit cards. While credit can be helpful in some situations, cash is simply best to avoid a negative post-vacation situation. Debit cards, although linked to bank accounts, can also be tricky as some people abuse them and accumulate overdraft fees, he said.
âSet a cash budget and stick to it,â Ice said. “When you’re done, you’re done and you have to think about the future – how I’m going to divide that among all the people I think I should give something to.”
Holiday fun:These vacation attractions are just a short drive from Oklahoma
Give a gift from the heart rather than the wallet
Sometimes the gifts we give to others aren’t things they need or even really want, Ice said. Rather than spending exorbitant amounts of money, homemade gifts, while cheaper, can often be of more value to a person because of the care that goes with them. Ice says that an act as simple as baking cookies for someone can mean a lot.
“It’s the idea that counts, and especially during the holidays it makes a big difference,” he said. “Sometimes we all have to be a little more careful about this than the big gift in that sense.”
Avoid the hassle of ‘matching’ gift values
When someone gives us a gift, we often pressure ourselves to spend the same amount as them, even when it is beyond our means. Ice says this is common during the holidays, and it’s easy to get carried away by corresponding values âârather than buying what we can or giving a gift that makes sense.
âTry to focus on things that don’t put you in debt, don’t turn your sense of obligation into a long-term problem for yourself,â he said. âYou don’t have to give back exactly the same. They give you.
Plan to start early next year
Finally, for those who notice a tendency to overspend while on vacation, Ice says it’s not a bad idea to plan for the future. Setting aside a small amount of money each month for vacation expenses is an option.
âIf you don’t have the discipline to put the money aside, sometimes it’s easier to put the gift aside,â Ice said. âYou know, next year maybe think about buying stuff earlier. ”
Money and gifts can be budgeted, he says, allowing consumers to give specific gifts to loved ones without falling victim to overspending during the holidays. Look for sales throughout the year on special items to avoid paying too much as the holidays approach, and keep them until it’s time to redeem them with loved ones.
âThat way, they still have something to open at Christmas, but you haven’t spent it all at once,â he said.
Ultimately, Ice said that if you can stick to a budget while on vacation, you can stick to a year, and financial discipline will pay off in the long run.