Whether they’re strapped for cash or are trying to squeeze all the value they can out of their credit card rewards, many readers could likely use some help setting (and sticking to) a holiday budget. The National Retail Federation reports that consumers plan to spend an average of $967 this year on holiday purchases including gifts, food and other expenses. Based on conversations with local experts and consumers, is that number likely to be higher or lower in your area? Are local banks or credit unions pushing personal loans or other vehicles to help consumers stretch their holiday budget?
Personal finance WalletHub crunched the numbers on income and savings-to-monthly expenses ratio to calculate maximum holiday budgets in over 570 cities. Keep in mind that these numbers represent WalletHub’s estimate of what residents in each city can afford, not what they’ll actually spend.
Here’s a look at holiday budget angles to consider localizing.
Cutting back on presents
Parents want to give their kids the best of everything, but sometimes it’s just not in the budget. If you can find a local family that’s embraced minimalism and scaled back holiday spending, you might ask how they broached the topic with the kids and what they did to celebrate the season without breaking the bank. Keep in mind, however, that minimalism isn’t always motivated by financial woes; sometimes it’s driven by a desire to reduce one’s environmental impact and teach the kids to be less materialistic.
Also talk to local money experts on how to tell kids that Santa is on a budget. One approach is to look for directors of programs that teach financial literacy to kids in your area; for instance, Money Matters for Youth runs school programs and a summer camp in Detroit.
Blended family finances
Situations where parents are separated, divorced or remarried can make holiday budgets more complicated, because kids may have two or more celebrations involving gifts. How do parents set new expectations around gifts and avoid comparisons or competition? You might talk to local family lawyers, divorce attorneys or professors of family law to discuss how families can navigate these types of issues. Kiplinger and CNN Money have covered the challenges of blended family finances (although not necessarily in conjunction with the holidays), so those stories provide some context on this dynamic.
Chasing credit card rewards
People with disposable income may try to maximize credit card rewards as they plan their holiday travel and gift shopping (rewards credit cards rarely make sense for people who carry a balance because they carry higher interest rates than non-rewards cards). What apps and other strategies are rewards hounds and travel hackers (a term credit cards don’t like using because of the negative implications) in your area using this holiday season? Are they cashing in points for gift cards so they can buy holiday gifts, using miles to book holiday travel or timing purchases so they can maximize bonus points through airline shopping portals? The BoardingArea is a collective of bloggers who write extensively about these kinds of topics.
For any of the above story angles, you may want to consult a certified financial planner in your local area who can weigh in on smart holiday spending. There are several ways to locate financial planners based on geography. For instance, Garrett Planning Network, the National Association of Personal Financial Advisors and the XY Planning Network allow you to search for planners based on your state (or in some cases, your zip code).
