WARWICK, R.I. (WPRI) — Rhonda Rubeira is tackling her holiday shopping list, armed with a budget.
“This year I’m sticking to it!” she said. “Well… we’ll see!”
The average American consumer is expected to spend more than $965 on the holidays this year, according to the National Retail Federation, and shoppers often blow through their budgets.
In 2016, consumers took on an average of $1,003 worth of new holiday debt, according to the website magnifymoney.com. Nearly half said they’d need four or more months to pay it off.
“Don’t start your financial planning in January when you get your credit card bills,” cautioned Tim Howes, an associate professor in the College of Business at Johnson and Wales University.
Howes said the key to a good holiday budget is making a detailed list of everything you expect to buy. It’s important to track even the smallest stocking stuffers.
“You can see the totality of the purchases you’re going to make over the holidays, which will probably be larger than what most people will expect,” Howes said. ” It’s kind of a little shock to the system, but I think it’s a reality check that you’d have now, versus having one in January and February when you’re in recovery mode.”
So be honest about how much you are actually able to spend.
“If people step back and have that conversation with family members about what’s really important here, perhaps there will be less of a worry about spending money,” Howes added.