This year, it’s going to be different. This year, I’m going to keep my holiday spending under control.

It’s easy to understand how so many people get themselves in over their heads during the holiday season. In 2021, shoppers are expected to spend $1.3 trillion on holiday gifts, an increase of around 9% from 2020. (Source: Deloitte) On average, gift-givers spend about 20% more than they had budgeted. (Source: National Retail Foundation) Some people will take the whole next year or longer to pay off their credit card bills. Some will even take out personal loans, a second mortgage, or new credit cards to buy Christmas presents.

To avoid the January regrets, you can take a few steps to make your holiday shopping easier. First, set a budget. Make a list of the people you want to buy for. Don’t write down the item you want to buy each person. Instead, list the dollar amount you want to spend on each person on your list. Once you have compiled your list and determined the dollar amount for each person, total the list.

The next step is to ask yourself if you can afford to spend that much. If you discover that you can’t afford to spend your total, don’t dip into your emergency fund for gift-giving. There are two ways that you can reduce that total, by eliminating people from the list, or by reducing the amount you want to spend on each person. You might consider a nice handwritten note or some home-made cookies instead of a store-bought gift. For most people, it really is the thought that counts. In your budgeting for the holiday, don’t forget to include the cost of wrapping paper, tape, gift bags, cookie tins and any other supplies you might need. I recently ran into a store to grab some wrapping paper and a card for someone and it ended up costing almost $15 to wrap a $20 gift!

Once you have finalized your list and budget, go to the bank and withdraw that amount. If you don’t have that much in the bank, you need to go back and revise your list. You now know who you are buying for, how much you are spending, and you have the cash in your hands. Now you can start doing your homework and finding the best deals. Before you go to the store or the mall, take your ATM card and credit cards out of your wallet. This will eliminate the temptation to spend more than you had planned. Put the specific amount for each person in an envelope and use just that envelope when you buy for that person. This will help to avoid overspending on any one person. If you do overspend on one person, you will have to take the amount from someone else. Ignore the impulse buys, no matter how good of a deal they seem to be. I have a weakness for TVs. When I see a great deal on one, I have to remind myself that I don’t need another TV, even at a bargain price.

Finally, remember what is most important. Everywhere you turn, you are being subtly or not-so-subtly encouraged to spend and consume more. Limiting what you spend doesn’t mean you can’t have a fun, beautiful, and rewarding holiday season. That truth is that most kids won’t miss the 13th or 14th toy on their list if it doesn’t show up under the tree. In fact, limiting the number of gifts can help children learn to prioritize their desires and might even make them more appreciative of what they have. The truth is that a few months or a year down the road, almost no one will remember what they received for the last Christmas. However, the time that you spend together playing games, singing carols or baking cookies might be wonderful memories that last a lifetime.

As we approach Thanksgiving, we are grateful for this community and the wonderful people we’ve had the opportunity to work with over the last two decades. All of us at Alderfer Bergen & Co. wish you and your family the most joyous of holiday seasons.

To hear the podcast of the Smart Money Management radio show on this topic, or others, go to our website at alderferbergen.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.