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OPINION: Four tips to avoid overspending during the holidays




Leslie CopelandBarnette Photography

Leslie CopelandBarnette Photography

We’re well into December, which means it’s time to get serious about your holiday shopping so you can spend less time browsing for gifts and more time with friends and family.

The holidays are full of themed music, baked goods and festive celebrations, but there is also one thought in the back of everyone’s mind: money. While the economy has steadily improved and the unemployment rate is at a 50-year low, many people still end up borrowing money during the holidays to pay for gifts.

The average household added more than $1,200 in debt last holiday season, according to a survey by MagnifyMoney. Even further, 28 percent of shoppers who went into debt last year still haven’t paid off what they owe.

Don’t let debt and money worries affect your holiday spirit. Here are four financial tips to help ease your stress so you can truly enjoy this most wonderful time of the year:

1. Create a budget

Begin with creating a budget — one that doesn’t require borrowing money — and sticking to it. Many financial advisors recommend spending no more than 1.5 percent of your annual income on holiday gifts. Once you’ve determined your budget, start making a shopping list so you can decide what needs to change in your budget to avoid overspending.

2. Use your credit card wisely

Credit cards can be a very helpful purchasing tool — but they can also be a dangerous way to rack up debt if you’re not careful. Use only one credit card so you can easily track your spending. We recommend paying your card’s full balance when it’s due, but if you don’t believe you’ll be able to do that, then shop with the credit card that carries the lowest interest rate. Another trick that can help with holiday spending: redeem any credit card reward points you have to purchase presents.

3. Get creative with gift giving

Many people simply don’t have the money to buy a gift for everyone on their list — and that’s OK. Get creative and consider alternative gift options, like a Secret Santa, where everyone in a group draws names and buys a present for one person. Homemade gifts like food or crafts are also excellent ways to express your appreciation for loved ones without taking a big bite out of your budget.

4. Protect your data

Consumers will spend a record $1 trillion shopping online this season, according to eMarketer — and cyber criminals will be ready to pounce. An estimated 14.4 million people were victims of identify fraud in 2018, according to Javelin Strategy & Research. Even worse, 3.3 million of those people were financially responsible for some of the liability, totaling $1.7 billion.

The good news is that there are some easy steps you can take during the holidays to protect your personal information. Only shop on websites that are secure. Look for an “s” in the website address (“https”instead of “http”), which means the site is secure. And always closely monitor your credit cards and bank accounts and immediately report any fraudulent activity you notice.

You shouldn’t have to worry about overspending on holiday gifts and activities while you’re spending quality time with friends and family. Follow these four tips and to avoid costly mistakes so you can have a stress-free, happy holiday season.

Leslie Copeland is the chief strategy officer at Ascend Federal Credit Union located in Tullahoma, Tenn. She oversees the financial institution’s strategic direction and growth strategy, working closely with the CEO, board of directors and employees. She also leads the organization’s marketing and business development functions in order to support the credit union and its members and increase financial literacy among members and non-members. With more than $2 billion in assets and 200,000 members, Ascend is the largest credit union in Middle Tennessee and one of the largest federally chartered credit unions in the United States.

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