Copyright Charleston Post and Courier
Every year around this time, as holiday spending is getting under way, I see reports that about one-third of U.S consumers are still paying off holiday debt from the previous year. I hate to say it, but it will likely be worse this year. The government shutdown, soaring health insurance costs, rising prices, the most reported layoffs since the Great Recession and stubbornly high housing costs are squeezing households from multiple directions. Oh, and inflation, too. If your pay has not increased enough to keep up with the rising price of goods and services, you’re likely feeling less well off — because you are. It’s already a bit late to be budgeting for the holiday season, with travel and meals and gift-giving that can, and do, turn into burdensome debt for far too many people. But better late than never. A Nerdwallet survey found that Americans will spend about $553 billion on holiday gifts and travel this year, with travel accounting for more than half. The National Retail Federation estimated last week that more than $1 trillion will be spent — a new high — and average spending is projected to rise. “This increase could be attributed, at least in part, to tariff-related price hikes,” said Nerdwallet. Unfortunately, there’s no simple fix or trick that would allow people to buy more gifts or pay for more travel than they can afford without taking on debt. It’s all the little things, the subjects of many columns I’ve written over more than a decade, that can help bring spending down and savings up over time. Earning more money or spending less of it — or a combination of the two — are really the only options. Earning more? That's why lots of people pick up some seasonal work during the holidays, or have a second job all year — as do so many young adults I know in Charleston. Spending less? One quick way to cut spending is to reduce discretionary expenses, such as restaurant meals, and review recurring monthly bills for nonessentials, such as streaming services, and decide what you could do without at least for a while. And pay attention to the thermostat now that heating season is arriving, because December and January electric bills can be the highest of the year. Cutting holiday travel and spending is a tough choice for lots of people, but I sure wouldn’t want a loved one to take on debt to buy me a present. If it’s not already too late, now’s the time to sit down and make a holiday budget. That’s how to get a clear view of how it all adds up, from costly travel and family presents to holiday tips for hair stylists and newspaper carriers. If the bottom line is a number that’s just too large, then it’s time to make difficult choices. Maybe that’s putting a lower price limit on gifts, adjusting travel plans to find lower prices or having a chat with adult family members about dialing back the gifting. Possibly the worst choice would be last-minute shopping, when price tends to take a back seat to immediacy, because it’s too late to go home (or log off Amazon) empty-handed. And try to resist the hype around Black Friday and Cyber Monday deals. Hasty purchase decisions are usually bad ones.
