It might be a good year to say no to holiday spending.
- Vacation expenses can easily lead to debt.
- Skipping holiday shopping can be a particularly wise move this year in particular.
- Consider reducing or skipping your purchases if you already have debt, don’t have an emergency fund, or are concerned about an impending recession.
Holidays can be fun and magical, but they can also be extremely expensive. Even if you’re not traveling for the holidays this year, and even if you skip decorating your front lawn, you can rack up a huge credit card balance while buying gifts for your significant other. in your life And at such a time it can be dangerous.
In the latest PYMNTS report, 56 million Americans say they don’t plan to do any holiday shopping this year. And you can follow their lead if these things apply to you.
1. You already have debt
It’s common for consumers to rack up some debt during their holiday shopping. And while it’s not ideal if it’s a small amount and is paid off quickly, it’s also not necessarily the worst thing in the world.
But if you already have debt, the last thing you want to do is add to it. At the moment, borrowing rates have risen, so it’s more expensive to carry debt than it used to be. And so, in that case, it’s better to skip the holiday shopping and instead use your spare cash to chip away at your credit card balances.
2. You have no emergency savings
You need money in a savings account in case an unexpected bill comes up and your regular paycheck can’t cover it. You also need an emergency fund in case you lose your job and can’t pay your bills for an extended period of time.
If you don’t have any money in your savings, your first priority should be to build up some cash reserves. And you’re better off putting your money in the bank than using it to buy gifts.
3. Are you worried about the recession?
Financial experts have warned for months that a recession could hit in 2023. And that could lead to a huge increase in unemployment. If that’s your concern, it might be better to use your extra money to boost your emergency fund and skip things like gifts and holiday decorations. Having extra cash reserves can give you peace of mind during these uncertain times.
4. Are you fighting inflation?
Inflation has been driving up living costs for over a year now. Even if inflation hasn’t pushed you into debt, it can be a struggle to cover your bills now that all your expenses have a higher price tag. If so, holiday shopping can give you more financial leverage. It can also help you avoid things like groceries because money is tight.
Giving up holiday shopping is no easy feat. But it may be necessary for you. If these scenarios apply to you, you may decide that 2022 is the year you don’t do any holiday shopping.
Warning: the highest cashback card we’ve seen now has a 0% investment APR through 2024
If you use the wrong credit or debit card, it can cost you serious money. Our expert likes this top pick, which has a 0% intro APR until 2024, an insane cash-out rate of up to 5%, and somehow no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
Read our free review