By Gina Haefner, VP/Area Manager, OnPoint Community Credit Union
The nation’s “Big 4” accounting firms, Deloitte, PwC, KPMG and EY, all agree: people are planning to spend more this holiday season than they did last year. The uptick in spending is good news for retailers, but financial experts are urging consumers to be mindful with their spending this holiday season.
American credit card debt surged by six percent to $1.14 trillion from this time last year, according to the Federal Reserve Bank of New York’s latest report. And 28 percent of Americans still haven’t paid off their balances, according to NerdWallet’s 2024 Holiday Spending Report.
The holidays are a time for gratitude and togetherness, but if you’re not careful, they can also become a financial burden with lasting effects into the New Year. The team at OnPoint have compiled seven essential tips for a festive and financially sustainable holiday season filled with more joy and less stress.
Make a plan and stick to it.
The key to a financially sustainable holiday is creating a spending plan before the festivities begin. Decide on a comfortable total spending amount, factoring in gifts, travel and gatherings. List everyone you plan to buy for and prioritize purchases that matter most. By sticking to this plan, you’ll be less likely to overspend on impulse buys or get caught off-guard by hidden costs.
Adopt the “Want, Need, Wear, Read” strategy.
48 percent of parents with young children feel pressured to spend more money on gifts for their kids than they’re comfortable with, according to a new NerdWallet survey. The “Want, Need, Wear, Read” strategy can help. Each child gets four gifts—something they want, something they need, something to wear and something to read. Not only does this cut back on excess, but it also encourages more thoughtful gift-giving. This simple approach can help you stay grounded in your plan as the season ramps up.
Declutter your gift list.
Three in 10 parents plan to buy gifts for fewer people this year compared to previous holidays, according to Nerd Wallet’s 2024 Holiday Spending Report. Consider focusing your own list on those closest to you.
Be cautious with Buy Now, Pay Later (BNPL).
BNPL services continue to rise in popularity, with Gen Z and Millennial consumers being two to four times more likely to use “buy now, pay later” or layaway programs. While BNPL can make large purchases more manageable, it’s critical to have a clear plan for paying off these balances. Avoid falling into a cycle of debt by treating BNPL purchases as short-term obligations, not long-term credit.
Start new traditions.
Rather than focusing on material gifts, why not create new, cost-conscious traditions? Secret Santa or white elephant exchanges are fun alternatives that help reduce the number of gifts you need to buy. These approaches emphasize thoughtfulness without overwhelming your budget.
Reuse, trade or make holiday decorations.
Holiday decorations can add up quickly, but they don’t have to break the bank. Reuse or swap décor with friends and family; better yet, make your own. Crafting homemade decorations can turn into a fun family activity while saving money.
Host smaller gatherings or potlucks.
Big holiday dinners don’t need to come with a big price tag. Hosting smaller, more intimate gatherings can be just as enjoyable. Alternatively, organizing a potluck spreads the cost among guests, making the event easier on your wallet while still being festive and fun.
Go digital with greeting cards.
Printed holiday cards can be expensive when you add up printing and postage costs. Consider sending digital holiday cards this year. Many platforms offer customizable templates where you can add a photo or two of your family to make it even more meaningful.
Give the gift of time or skills.
Sometimes the most meaningful gifts don’t come with a price tag. Offer your time or skills as presents, such as babysitting, helping with home projects or cooking a meal. Gifts of time are often more memorable and less costly than traditional presents. It’s a great way to show loved ones you care without adding to your expenses.
Heading into the season with these strategies in mind can help keep stress at bay and allow people to focus on what truly matters—enjoying the holiday season with friends and family. OnPoint is committed to helping its community navigate financial challenges with personalized support. Visit any of OnPoint’s branch locations for tailored advice on budgeting and debt management.