According to Discover Financial Services, Americans plan to spend an average of just over $1,000 during the holiday season. During Christmas season, it's easy to get so caught up in the deals and the discounts that you end up checking your reasoning and budget at the retail door. It's important to make sure this season is about giving and spending time with family — not financial irresponsibility and hardship. As you are shopping this holiday season, make sure to avoid these common pitfalls.
1. Emails offering products at "super-low prices"
With as much advertising as there is out there, it may not be completely out of the question to see prices slashed by 50 percent or more. But be wary if you receive an email with such an offer. By following the link, you may be asked for enough personal information to put you at risk for identity theft. Check the email address of the sender. Identity thieves may use logos and email styles similar to online retailers like Amazon, but they can never duplicate a company's email address domain. If still in doubt, check company websites to see if you can find the same deals there. If not, it's probably a scam.
2. Keeping track of purchases in your head
Keeping a running total of all the money you have spent and on whom you have spent it is a powerful way to keep yourself from overspending during the holidays. If you try to keep track of it all in your head, you are bound to forget some purchases or people you need to shop for. One December, shortly after I began budgeting for the first time, I decided to allow myself a little leeway during the holidays. I stopped budgeting. At the beginning of the next month, I took a look at my expenses and realized I had gone over my original budget by over $300. I didn't buy anything big, just a lot of little things that added up. Having a goal for your purchases and keeping track of them will help you stay within your budget and avoid the "after-Christmas spending freeze" — which is what happened to me after I blew it.
3. Opening store cards to get a discount
Many big retailers you'll come across this season will offer you discounts at the register. The only catch is that you have to sign up for the store's credit card. At this point, the question you need to ask yourself is not, "Do I want the discount?" The question you need to ask is, "Do I want the card?" Retailers aren't offering you discounts because they like you. They're offering discounts because they want you to use their cards. If you go to a store regularly and don't currently have a lot of credit cards, a store credit card may be a good idea. But if you don't go to the store often or wouldn't be responsible with a credit card, the discount isn't worth it.
Let me repeat myself quickly here. Retailers do not offer you discounts because they like you. There is always an ulterior motive. Be careful when you see discounts. Marketers have tailored them to appeal to your emotions. They often give you limited time to make decisions or encourage you to focus more on the discount than on the product you are buying. Take a step back and think about it. Don't allow yourself to impulse buy; it can trigger a domino effect. If you've thought the purchase through and it's a good decision for you, take advantage of that discount. If it's not, don't let retailers take advantage of you.
Christmas shopping can be fun as you're thinking about all the things you can give to your loved ones, but it can also be a very financially stressful and debilitating time. Hopefully these tips can help you find a way to balance your shopping and keep yourself in line with your budget and goals.