The holidays are a joyous time, but if you aren’t careful, you could end up with a season full of financial stress. The good news is, you can avoid this fate by following simple tips to help keep your holiday spending under control, so your festive cheer doesn’t end up leading to financial decisions you regret.

First, create a plan before even stepping foot into a store or tapping on your favorite shopping app. 

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Remember that holiday spending is not just gifts, but also decorations, food and events. A good rule of thumb for budgeting is to create a new account designated for the season that contains all the money you are comfortable spending over the next few months. Spreading the savings out over several months will make it easier to absorb into your budget and limiting yourself to spending the balance will keep you from going into debt when the holidays come. Supply chain issues and worldwide product shortages will also impact holiday shopping this year. It may be more difficult to attain a certain product than in years past so shoppers should prepare to order gifts now.

Eager for Black Friday, shoppers have already begun to hunt down the best deals. When looking for sales and gift ideas, remember to keep an eye on your budget. No interest, no payment programs are also a popular way to draw shoppers in. Ask yourself, “Can I afford to pay this off during the six months, nine months, 12 months, however long they give me to take full advantage of that free interest?” If you decide to wait, watch out for retroactive interest. Shoppers can also develop their own version of a layaway option by buying that store’s gift cards and saving them toward a large purchase. Purchasing gift cards over a 4 to 5 month period can work better for your budget than spending a large amount at once.

Following the holidays, start looking at the goals you would like to set for 2022. The start of a new year is the perfect time to build a budget and create a concrete plan for how you will meet your financial goals in the next 12 months. The most effective way to save is to open a separate savings account and have a designated amount deposited from your paycheck directly every pay period. Make sure the amount you select is low impact and that won’t affect you financially. A great rule of thumb is to treat the savings deposit as a bill that is being automatically deducted every pay period. Incorporating small changes into your budget is the best way to develop a strong financial plan for the new year.


Brian Larsen is vice president and Northwest Arizona Retail Division manager for WaFd Bank.