It would be a good year to say no to holiday spending.
- Holiday expenses can easily lead to debt.
- Going out for holiday shopping can be a very smart move this year in particular.
- Consider reducing or skipping your purchases if you already carry debt, need an emergency fund, or are worried about the coming recession.
Vacations can be fun and magical, but they can also be expensive. Even if you’re not going for the holidays this year, and even if you skip the decorations that usually adorn your front lawn, you can still pay off a credit card balance while shopping for gifts for various people. in your life. And at a time like this, that can be a dangerous thing.
In the latest PYMNTS report, 56 million Americans say they don’t plan to do any holiday shopping this year. And you might want to follow their lead if these things apply to you.
1. You already have debt
It’s common for consumers to accumulate a certain amount of debt during their holiday shopping. And while that doesn’t make sense, if it’s a small amount and it’s paid off quickly, it’s not the worst thing in the world.
But if you already have debt, the last thing you want to do is add to it. Right now, lending rates have increased, so it’s more expensive to manage debt than it used to be. So if that’s the case, you’re better off skipping holiday shopping and instead using your spare cash to pay off your credit card balances.
2. You have no emergency savings
You need money in a savings account in case an unexpected bill pops up out of the blue and your regular income can’t cover it. You also need an emergency fund in case you lose your job and can’t pay your bills for a long time.
If you don’t have money in your savings, the first thing you should prioritize is to build some savings. And you’re better off putting your money in the bank than spending it on gifts.
3. You are worried about the recession
Financial experts have warned for months that a recession could hit in 2023. And that can lead to a huge increase in unemployment figures. If that’s your concern, you’d be better off using your extra cash to boost your emergency fund and skip things like gifts and holiday decorations. Having extra cash in savings can buy you peace of mind in these uncertain times.
4. Struggling with inflation
Inflation has been driving up the cost of living for over a year now. Even if inflation hasn’t put you in debt, it can be a struggle to pay your bills since all your expenses have a higher price attached to them. If so, skipping holiday shopping can give you more financial breathing room. It can also help you avoid splurging on things like groceries because of a lack of cash.
Giving up holiday shopping is not an easy thing to do. But it may be necessary for you. If these conditions apply to you, you may want to decide that 2022 is the year you won’t buy vacations.
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