The holiday season is often called the “Most Wonderful Time of the Year,” but it can also be the most expensive time of the year. With Christmas just weeks away, it’s time to start thinking about what gifts to purchase this year – and how to pay for them.

Unfortunately, results of the pandemic have introduced other considerations into this Christmas shopping season. Supply chain shortages threaten holiday gift buying, as many popular selections may not be available this December.

Despite this, with 2022’s economic forecast still uncertain, retailers are expecting huge demand in the 2021 gift shopping season. The takeaway – don’t wait around to shop this season as many of the presents you’re looking for could be gone in short order.

It’s a lot to wrap your head ¬– and wallet – around but combining a strong financial plan with your shopping list will help. Here are four tips to help you spend wisely during the holidays:

Set a budget and spend no more.

Set your budget for the entire shopping season, then make it your goal to spend less than the budgeted amount. Many times, we set a budget, then go slightly over and believe that it’s “close enough.”

This season, make your budget first to account for all fixed costs – rent, mortgage, groceries, car payment, savings, etc. – then take what’s left over for your gift buying budget. Set a specific amount for each person on your list and stick to that dollar figure like glue. If you do go over the set amount, make sure that you find another area in your expenses to cut back and make up for the exceedance.

Sell used items to raise money for gifts

There are many good options now for selling your used items. Of course, you could have a garage sale, an old-school way to generate some quick cash, but now there are also plenty of online options to consider when listing your unwanted “stuff.”

Get a personal loan to consolidate Christmas credit card debt

While using credit for gifts isn’t the optimal way to pay, if you do decide to buy in this manner, personal loans, in general, offer much lower interest rates than credit cards. Most credit cards charge in the 15%-25% range, whereas personal loans have interest rates that can start as low as 5%. This can be an especially good strategy if you’ve already used high-interest credit cards to pay for gifts and have outstanding balances.

Retail credit cards are easy to attain while shopping but can be extremely costly places to hold outstanding debt.

Meanwhile, personal loans are versatile, offering options for a variety of goods and services. For holiday shopping, signature lines of credit or signature loans, depending on rates, might be good options.

Force yourself to save with automatic investments

Christmas Clubs can be great ways to save for the holidays. If automatic transfers are already set to transfer money into savings, you’ll be less likely to purchase those new golf clubs or expensive shoes for yourself before Christmas season.

Most importantly, the money will be there when it comes time to make those holiday purchases. In fact, this is a great idea to get started after the shopping season. Set automatic transfers to begin in January, then when November rolls around next year, you’ll already have a plentiful amount to begin purchases and won’t be scrambling to find the money.

With demands on time and finances, the holidays already bring an inordinate amount of stress. Setting a budget and avoiding costly last-minute mistakes that come from being unprepared can contain the anxiety of the holiday gift-giving season – and keep it from extending into 2022.

Leslie Copeland is the Chief Strategy Officer for Ascend Federal Credit Union.

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