(BPT) - 'Tis the season, but U.S. consumers say high prices are impacting their spending habits and making them feel stressed (61%).
Citing inflation concerns (74%), recent research from financial services company Empower shows over a third (34%) of Americans are trimming their holiday budgets in favor of saving during the most wonderful time of year.
How much spend is just right? Let your budget be your guide. Here are three tips for embracing the spirit of giving.
1. Start budgeting for the holidays early
It's always best to plan ahead. With rising prices, it may be harder to buy last-minute impulse gifts or squeeze in a few extra presents. That's why it's helpful to create a list of all your holiday expenses first.
Most people think of gifts when it comes to outlining holiday expenses. And while presents may comprise the bulk of your expenses, there are additional costs to consider like holiday decorations, travel, parties, entertainment, cards, wrapping paper, food and shipping charges for sending gifts to friends and family members who live far away.
Empower data shows that more than half of shoppers (55%) plan to focus on a significant or 'big gift' item for those on their list, while 45% prefer to give an array of smaller presents. Budget-wise, more than a third of Americans (37%) have allocated less than $250 in total for gifts this year.
Keith Jones, senior financial professional at Empower, says, 'Determine the total amount of money you want to spend on your holiday purchases. Write this figure down and put it in a prominent place where you will see it often. This way you'll be reminded of your spending limit every day during the holidays, when it can be tempting to want to overspend.'
2. Prioritize what brings you the most holiday joy
According to the findings, half of Americans are cutting back on buying gifts for friends (50%). Deciding who you will - and won't - buy gifts for this year can be the hardest part of creating a holiday spending budget.
'How you allocate your holiday budget will depend on what's most important to you - this year, you may prioritize travel to visit family that you typically only see during the holidays over decorations or cut back on social commitments in order to give yourself a larger budget for holiday gifts,' says Jones.
Americans are embracing the gift of time, choosing low-cost activities like seeing holiday lights (56%) and watching movies at home (47%). These precious moments can build new holiday traditions and create priceless memories for your friends and family members to enjoy.
3. Start thinking about next year
Planning for the new year can help keep your eye on the prize. Americans' top goals for next year include: Saving more money each month (54%), handling their debt (37%) and lowering any non-essential spending (34%). Budgeting is on the wish list, with 20% planning to set or stay on a budget next year.
It's important to be realistic when setting a spending limit. This starts with understanding your overall financial situation. Working with a financial professional can help you identify your money goals and create a road map to help get you there.
Methodology:
This survey of 1,003 Americans ages 18+ was commissioned by Empower: 20% were baby boomers, 26% were Gen X, 26% were millennials, and 28% were Gen Z.
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