Holiday Spending with Shannon Foreman

We are counting down to the holidays and as we enter the month of November, we are going to take some time to talk about areas pertaining to gift giving, spending and other various areas surrounding this topic.

 

Today, however, we are specifically talking about not digging that hole of debt with your holiday spending! 

 

According to Investopedia, nearly every year since 2009, American consumer spending on holiday gifts and other holiday expenses has increased over the previous year. 

 

For 2020, Americans, on average, were expected to spend $998 on gifts, holiday items, and other expenses during the holiday season, down $50 from 2019. We now see that the COVID-19 pandemic is projected to result in decreased spending on travel and increased spending on family and friends in 2020 and now in 2021 a bit of a change based on the increased cost of goods and experiences. 

 

U.S. consumers will spend up to 9% more this holiday period compared to 2020, when consumers spent a total of $1.2 trillion during the key shopping period between November and the end of the year, according to a forecast from Deloitte.

 

Knowing this information, have you budgeted for this and planned for these expenses? 

 

If you are like most people, you haven’t. 

 

Credit cards are one of the most expensive ways to borrow money with credit rates standing at around 17.4%. As credit card balances creep higher and Americans’ confidence in their ability to pay their bills declines, adding on even more high-interest becomes detrimental in being able to achieve the true financial security we may desire to have. 

 

We are spending more money than we have. There is always a reason and behavior behind that we must get to. Recognizing and creating health behaviors with our wealth will make more of an impact than trying to prescribe a solution without knowing the REAL problem. 

And we must ask ourselves … WHY? 

What is the reason we are spending more than we have? 

Why are we choosing to put ourselves in debt to buy more then we can afford to? 

 

I always want to address the behavioral component and what our relationship is with money. If you haven’t read the blog post or listened to our episode on financial behaviors, I invite you to do so after you listen to this. >> Learn what YOUR Emotional Financial Behavior 

 

At Forethought Planning we know that money touches every aspect of our lives. So, when we think about holiday spending and credit card debt, ask yourself… 

 

How much debt are you using and not paying back? 

How likely are you able to pay back the debt? 

 

Now for another angle this I want you to consider this … 

When you buy products, you are driving up sales for retail partners, but if you don’t have the money you are in getting yourself in debt. 

 

And guess what? 

Your purchases actually drive that company to have an increase in their stock prices. That in turn allows their stockholders (essentially) to create more value – wealth through those increased prices. Of course none for that is guaranteed and each individual stockholder has their own personal financial situation.  

 

So, consider this…are we driving wealth up in one space while accumulating debt in another? 

This holiday season, stop and think and dig a bit deeper before you buy. 

  • What is it I really need to get? 

  • Is there something I can give them that doesn’t really spend money? 

  • What is driving YOU to spend more money?

And remember, there is nothing you can buy that can make up for time that is lost. Think about your priorities and what really matters to you and those around you. 

 

Resources: 

2021 Credit Card Debt Statistics

Holiday spending expected to rise this year despite Delta variant

Average Cost of American Holiday Spending

Holiday debt could take years to pay off

 

We hope you continue to join us on this series and invite you to schedule an appointment to our complimentary 30 min Wealth Assessment session to learn more about how we incorporate these strategies and other’s to assist you through the financial planning process. 

 

 

 

Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors’ Pride, a SEC registered investment advisor. LPL Financial, Advisors’ Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. Any of the parties listed above are not affiliated with Forethought Planning, Advisor’s Pride, or LPL Financial. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor’s Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issues for non-financial reasons, and therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

Share This Post

How can we help you on your wealth journey?
Our team is ready to guide you through your next steps.
Get in touch.

Subscribe To Our Newsletter

Sign up to receive a notification when a new blog post is published, as well as economic updates, financial planning knowledge, and helpful resources.

More To Explore

Launching our NEW Look

Forethought Planning same service with a new twist! We have been working on a new brand strategy for months now. Hiring a firm to help

Wise Women Build Wealth

On today’s episode, we are talking about making a career change and the importance of a support system during big transitions. The questions you might ask yourself are; How do you know when it’s time to move on? What do I need to know about tax planning and retirement planning while transitioning? According to a survey by InHerSight, seven in ten women are looking to change careers. This is up 28 percent since we posed the same question just last year. So, why are they looking to change careers? We are seeing that a common theme is “burnout.”