Home Experts offer tips for how you can avoid overspending this holiday season

Experts offer tips for how you can avoid overspending this holiday season

Rebecca Barnabi
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Last year’s holiday spending increased 14.1 percent to a record $886.7 billion.

WalletHub released its 2022 Holiday Budgets by City report to help consumers avoid post-holiday regret.

The personal finance website used several key metrics to estimate the maximum spending amounts for consumers in more than 550 U.S. cities, including income, age and savings-to-monthly expenses ratio.

The report determined that the cities with the biggest holiday budgets are Newton, Mass. with $4,233, Palo Alto, Calif. with $3,920, Flower Mound, Texas with $3,531, Milpitas, Calif. with $3,480 and Bellevue, Wash. with $3,401. Ellicott City, Md. claimed the no. 9 spot with a budget of $3,122 and Rockville, Md. the no. 19 spot with $2,574.

The lowest expenses-to-income ratio, 58.25 percent, is in Newton, Mass., which is 1.7 times lower than in Hartford, Conn., which has the highest at 99.16 percent.

The highest savings-to-monthly expenses is 646.80 percent in Sioux Falls, S.D., which is 3.5 times higher than in Hartford, Conn., the city with the lowest at 185.24 percent.

Experts offered tips on how to avoid overspending for the holidays.

“A budget can really help to control holiday spending. Want to buy things cheaply? Plan ahead. Today, the day after Halloween is the best day to buy Halloween merchandise at lower prices. The day after Christmas is the best day to buy Christmas merchandise at cheap prices,” Dr. Sampath K. Kumar, a professor and Academic Director of MS Data Sciences at the University of Wisconsin-Green Bay, said in a press release.

“Some products can be bought off-season and at more affordable prices. Budgeting a certain amount for a given holiday is the best way to control expenses. Forego credit card spending and start spending cash for holidays. Thus, you cannot overspend. Set up spending limits on your credit card and once you cross that threshold, your credit card will send you notifications. Plan what to buy and stick to the list. These are some ways in which holiday spending can be controlled,” Kumar said.

According to Area Chair Analytics (Marketing, MIS, Operations/SCM), SUNY Distinguished Teaching Professor at Binghamton University Subimal Chatterjee, most spending creates either joy or thrill as you spend and regret the next day that you spent too much.

“If you think that you are likely to overspend, train yourself to anticipate the day-after emotion today, i.e., ask yourself as you are buying, how would I feel the day after, a week after? Anticipating that you will regret your purchases in the future just might do the trick,” Chatterjee said in the press release.

Dr. John Bowen is Professor Emeritus and former Dean and Barron Hilton Distinguished Chair at Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston. He said the positive influence of the current social and economic environment on household holiday spending decisions is that most COVID-19 restrictions have been eliminated.

“People are feeling good and looking forward to the holidays. Families and friends are looking forward to celebrating the holidays with each other This should have a positive effect on both holiday travel and spending on gifts. On the negative side prices for energy, rent, groceries, autos, travel, and most items that we purchase are higher. This will moderate the spending, causing consumers to be price conscious looking for sales, and making price comparisons,” Bowen said.

Dr. Bill Hauser, Applied Sociologist and Associate Professor Emeritus at the University of Akron, said he thinks people will spend more this holiday season despite economic anxiety.

“People are still coming out of the COVID-19 epidemic and feel the need to return to normal. ‘Normal’ during the holidays is meeting with people and exchanging gifts. Also, the supply chain problems of last year will make people want to make up for what they could not get last year. A major part of economic anxiety today is caused by media messages. While their personal economic situation may be okay, people are constantly told that the economy is bad, so it must be,” Hauser said.

How can people show love and appreciation over the holidays without spending money on gifts?

“We often say this (but never seem to practice it) — it is the thought that counts. So, you might have a friend who has been putting off work to be done at their house because time and/or money are tight. Just turn up one day, and say let’s get that done together. It can be as simple as mowing your friend’s lawn. We make the mistake of thinking that we can always pay someone else to do my friend the favor — That is the mistake — when you do the work yourself, you show your true love and appreciation,” Chatterjee said.

According to Bowen, using your talents shows loves and appreciation. A skill such as baking, canning, pottery, painting, woodworking or knitting can create a gift with special meaning.

“For example, the scarf you gave as a gift will bring back memories of you each time the recipient of the gift wears it. A personalized gift you make can show more love and appreciation than a gift that you purchase. A handwritten note or a phone call is another way of showing your love and appreciation,” Bowen said.

Rebecca Barnabi

Rebecca Barnabi

Rebecca J. Barnabi is the national editor of Augusta Free Press. A graduate of the University of Mary Washington, she began her journalism career at The Fredericksburg Free-Lance Star. In 2013, she was awarded first place for feature writing in the Maryland, Delaware, District of Columbia Awards Program, and was honored by the Virginia School Boards Association’s 2019 Media Honor Roll Program for her coverage of Waynesboro Schools. Her background in newspapers includes writing about features, local government, education and the arts.