HAPPY HOLIDAYS??
7 signs you can’t afford Christmas this year.
CHRISTMAS is a time for giving. But it can also be a time to feel pressured to give beyond your means.
“When you hear the word ‘Christmas,’ perhaps the very first thing you think about is having to buy gifts for all those people, and you think, ‘How am I going to afford it?’” said Jamie Pomeroy, a financial advisor in Winona, Minn., and founder of Financial Gusto.
Many Americans actually feel this way. Credit reporting agency Experian surveyed consumers before the 2015 holiday shopping season and found that 41 percent felt obligated to spend more than they could afford. About half said they felt stress and anxiety when thinking about holiday shopping, and 60 percent said holiday shopping put a strain on their finances.
“If just the thought of Christmas stresses you out, it might be a clear sign that you can’t afford it,” said Pomeroy.
That’s probably not what you want to hear. After all, who wants to forgo celebrating Christmas? But you won’t be celebrating the debt you have racked up and the financial hole you’ll have to dig out of after spending more than you can afford.
Feeling stressed is just one of several signs that you might not be prepared financially for the holiday season. If you recognize these red flags and take steps now, though, you might be able to enjoy Christmas without putting your finances at risk.
YOU DON’T HAVE A HOLIDAY BUDGET
That anxiety you’re feeling about the holidays might be due to the fact that you haven’t taken the time to figure out how much you can afford to spend.
“Show me someone who is stressed about Christmas, and I’ll show you someone without a budget,” said Pomeroy. In fact, the Experian survey found more than half of consumers have shopped for the holidays without a budget.
However, you still have time especially if you haven’t started buying gifts yet - to calculate how much you can afford to spend. You might find that you have enough to pay for the holidays without relying on credit. But if you’re going to come up short, you can pinpoint discretionary expenses to trim, such as restaurant meals, happy hours and movies at the theater.
Figuring out how much you can afford to spend on gifts sooner rather than later will also give you time to talk with friends and family about gift-giving expectations.
“Make it clear with your family or significant other how much your budget is for each,” said Brandon Hayes, a certified financial planner with oXYGen Financial in Atlanta. Do this as soon as possible so that everyone is on the same page and won’t feel compelled to one-up each other by spending more, he said.
YOUR EXPENSES EXCEED YOUR INCOME
“If you don’t have money to pay your regular bills, you can’t afford Christmas this year,” said Holly Johnson, a frugal living expert and co-author of the forthcoming book “Zero Down Your Debt.”
You might have time before the holidays to cut some of your bills and regular expenses — such as groceries, wireless phone service and cable TV — to have a little more cash for gifts. But, you might just have to take a step back this year, John- son said.