With talks about supply chain disruption and major retail chains kicking off Black Friday sales earlier than ever, shoppers are growing anxious. There’s likely to be a return to the traditional, pre-COVID-19 holiday shopping frenzy as well as “revenge spend,” which is described as over-spending as a release of pent-up frustration from a two-year-long pandemic.
Holiday spending, particularly considering all these factors, can be a slippery slope to navigate without help, so we’ve turned to financial expert Jini D. Thornton, CPA for help. As the owner of the Atlanta-based Envision Business Management Group, Thornton provides everything from accounting services to strategic business consulting to her clients, who include recording artists, actors, social media influencers and management companies. The 24-year accounting veteran is no stranger to counseling clients away from imprudent purchases, so she’s here to help us, everyday consumers, properly plan our spending while banishing pre- and post-holiday shopping anxiety and blues.
Know What Your Commitment Is
Thornton says people get into holiday debt when they don’t start with a clear end goal. “A lot of times, we just simply begin shopping versus knowing what our commitment is,” she says. “It’s not a budget; it’s a commitment. Whatever the base number is—$300, $500, $2,000—know what works for you and your life. It’s a promise. It’s about setting boundaries, so it’s not punishment.”
You may have your heart set on upgrading the family phones to the latest models or paying double just to guarantee you snag that limited edition for bae’s sneaker collection. But don’t let your gift list determine your spend—let your spend determine your gift list.
“We say, ‘I want this;’ ‘My kids want this;’ ‘Ooh, my grandmother, my boyfriend, my whomever wants this.’ We begin shopping, then we figure it out later versus being super clear on what the commitment is,” Thornton reaffirms. “And, be okay with pushing away from the computer.”
Guilt Gets Us in Trouble
“Maybe you have some debt. Maybe you are planning for a big trip next year. Maybe life just happened, and you feel horrible about it,” Thornton says about common financial constraints heading into the holidays. “You want to be able to spend $2,000 on your kids, but all you have is $500 to spend. Tell yourself, ‘This is where I am.’ Then, ask yourself, ‘What type of conversation do I need to have with others?’”
Don’t try to swallow your guilt, which could eat away at you until you end up with a few impulsive purchases on your credit card. Instead, the financial counselor recommends being open and honest with your financial picture. Your loved ones will understand.
Budget for Everything
It’s funny how quickly the little things like family holiday outings, drinks with your friends and those irksome Secret Santa/White Elephant gifting games can add up on your cards.
“Play offense versus defense, so you can minimize the impact,” the CPA advises. “Don’t just budget for the large purchases, gaming systems, gifts for girlfriends, boyfriends and spouses. It’s those little things that will take you out.”
Even factor in your hosting budget for Thanksgiving and Christmas dinner, including food, décor, drinks, etc.
“You may have stuck to your commitment for gifts, but you did not think about the random stuff; it may lead to trouble,” she says. “Think about your financial commitments as a whole.”
The Most Amazing Shoppers Ever Do This
“I remember my mom having a Christmas Club savings account,” Thornton recalls. “She was an educator, and she saved a percentage of her paycheck. By the time December came, she had saved x dollars, and that’s what she used for the holidays, period.”
So, why wait until the last minute to start saving? And who says all your holiday shopping has to be in December?
“The people who I admire most when it comes to shopping for Christmas have already finished shopping,” she offers. “We know what our loved ones want, but we are waiting to make the purchases. Why? We are not being strategic. The dates for the end-of-year holidays don’t change. You can literally prepare all year long by either pre-shopping or saving to reach your magic number when the holidays roll around. The more money you save and accumulate, the more flexibility and freedom you will have.”
Lastly, she adds, “Use the money you saved up for the occasion, and when it’s gone, it’s gone. That takes a lot of pressure off.”
Paying Off Credit Cards in 2022
“When you are tackling credit card debt, the most important thing, which seems to be the hardest for people, is to stop using them,” the finance expert explains. “If you have been with a company for a while, you have a good strong payment history and your interest rate is high, call them and see if you can get your interest rate lowered but do not make adjustments to your spending limit.”
She adds that credit card holders should be empowered to ask their creditors for more information, including interest rates they are offering their new customers.
“Know how long you have been a customer, and be confident about your payment history even if you have late payments. The person who answers the phone doesn’t have the authority to make the decision. There’s a customer retention department,” she shares.
“If you have three credit cards, make the minimum payment on two cards, and on the third card, pay as much as you can above the minimum payment that your budget will allow. Once it’s paid off, move to the next one,” Thornton advises. “I strongly suggest you use a credit card payment calculator in the beginning, so you will know how long it takes and won’t grow weary. Lastly, if you have an additional source of income, use it exclusively to pay down your debt.”