The holidays are near and last year one third (34%) of all Americans went into credit card debt shopping for gifts. These numbers are trending down slightly, from 35% in 2022 and 36% in 2021 bringing the average debt packed on during the holiday rush to $1,028 last year. Debt can be a real grinch this holiday season, especially when it accrues at credit card rates near all time highs of 30% and higher!
Here are 5 tips to help you and your family budget to avoid credit card debt and avoid becoming one of Scrooge’s statistics this holiday season.
1. Prepare in advance; save in the months leading up to the holiday season.
Setting aside $ each month even if it’s a few hundred dollars adds up over the year.
2. Make a list of people you will give a gift to (and check it twice).
Once you have this list, it should be easy to update for years to come!
3. Allocate dollar amounts to each person.
Add up your available budget for the holidays and start dividing it up by priority of your naughty or nice list.
4. Add it up and ensure you stay within your budget.
Ensure that your totals add up to available cash to avoid overspending on the credit card. Stick to your budget and do not spend more than you financially have cash for.
5. Shop for deals!
There are deals throughout the entire year but especially during the last 3-4 months of the year. Placing items in your online cart and waiting a week or longer often can encourage a retailer to send you a coupon to incentivize you to complete that purchase.
Monthly Market Update
November has been brimming with market events and activity creating a pop up from the 3rd quarter slow down we experienced in October. Here are a few key bullet points moving the markets now.
• Election Results: Donald Trump was re-elected the 47th President, gaining majority in the Senate and house giving the new administration a mandate for at least 2 years.
• Equity Markets: Post election market rally has been especially favoring small- cap stocks, mid-cap stocks, financials, and energy sectors.
• Fixed Income: Treasury yields rose, with the 10-Year at 4.34%. Expectations of fiscal expansion influenced bond yields and credit spreads tighter.
• Federal Reserve: Cut rates by 0.25%, setting the target range at 4.50-4.75%, marking the second consecutive cut to support employment and manage inflation. Mortgages and corporate debt yields actually increased, contrary to expectations.
The economic outlook will be very dependent on unemployment figures (slightly up), yet to be released CPI, PPI, crude oil inventories, and retail sales figures. Investors are particularly looking for regulation changes under a new administration with a post-election environment suggesting a risk-on sentimentality in the near term. As investors and not day traders, long-term investment return will depend on the economic fundamentals, we do not chase short term returns as a part of retirement planning investing.
There is no way to know where your money is being spent unless you have a budget to track dollars and realign priorities with your spending. Feel free to reach out if you would like a copy of my printer friendly excel budget to keep track of your monthly holiday spending.
Happy Holidays!