As the holiday season approaches, it is important to begin budgeting for your gift shopping ahead of time. Taking proactive steps now will help you manage expenses wisely and make the most of the festive season. Virginia Tech economics and finance experts share why.
“Shoppers need lists of recipients and gifts, prioritizing essential items, and tracking expenses to avoid overspending,” says Jadrian Wooten, collegiate associate professor in the Department of Economics at Virginia Tech. “It’s tempting to be lured by good deals and go off-budget, but staying disciplined is incredibly important.”
Wooten explains that consumers are often presented with promotions that create the impression of financial losses if they don’t make an immediate purchase. “In reality, sticking to a budgeted plan is a wiser choice.”
“Responsible budgeting, before we start shopping, ensures a joyful holiday season without the added stress of financial burden,” says Wooten. “The holiday shopping culture revolves around generosity, tradition, and emotional spending, which often leads to emotional spending.”
To avoid falling into this trap, Wooten recommends people be aware of these cultural dynamics and set up realistic spending limits that are in line with their financial situation.
“It’s no secret that inflation has increased the prices of the goods we want and need,” says Virginia Tech finance expert Jesse Lineberry, who also offers his perspective on the effect of holiday budgeting. “If you’re having a hard time budgeting for gifts this year, consider making crafts or building gifts instead of purchasing items at the store.”
Looking past the holidays, Lineberry advises avoiding high-interest-rate debit use through credit cards.
“Avoid buying gifts with interest-bearing debt and consider using a debit card or cash if you can.” If you are going to use a credit card, Lineberry recommends paying it off in full every month. “Pre-emptive budgeting can help ensure that we have the proper funds to avoid taking on debt”.
Budgeting in advance allows shoppers to worry less about gifts when the holidays finally arrive and allows for more quality time with friends and family. “A budget will allow you to shop with freedom knowing that you can celebrate the holidays without causing damage to your financial well-being,” says Lineberry.
Sarah Hern for Virginia Tech
