According to a CNBC report published yesterday, 60% of Americans are living paycheck to paycheck heading into the holiday season, but most people still plan on overspending for the holidays.
Queerency spoke with money coach Ada Vargas, also known as the Queer Money Coach, about how to curb holiday spending during this season of hyperconsumerism.
"I would recommend for folx to take a look at how much money they can spend without actually going into debt," says Vargas. "Your loved ones probably don't want you to be in financial distress in order to purchase things for them."
Here are three additional tips that Vargas recommends for shoppers who haven't come up with a clear spending plan yet.
1. Ask whether or not the people in your life actually want to exchange gifts
"One tool that goes really underutilized is talking to the people in your life about whether or not they want to exchange gifts," says Vargas. "Because a lot of the time, people are actually all stressed about this and they would just prefer to spend quality time.
Vargas adds that the holidays can bring up financial and relational pressures, especially when it comes to choosing the right gift. They add, "Is it going to add value in their life? Or is it just going to add clutter or stress into their lives?"
If there are kids in your blood or chosen family, Vargas recommends checking in to see if the group would be willing to focus traditional gift-giving on those children rather than buying gifts for the whole group.
2. Examine your "gap number"
Vargas says they usually help their clients earlier in the year to find the "gap number," the difference between how much money you make each month and your expenses. Vargas works with their clients to figure out how much of that "gap number" can be saved and invested for your future goals, including holiday shopping.
If you haven't made a plan yet, examine your own monthly "gap number" to see what you can realistically spend on holiday gifts this year.
3. Stop future expenses, like subscriptions, to pay for holiday gifts
"If there isn't a space in between and you're looking for [holiday presents] in the nick of time, try to look at what expenses are coming up that you might be able to stop," says Vargas.
You might want to cancel upcoming subscriptions, like Netflix or Hulu, "to make sure you're not putting your future self into financial distress for the fervor of the holidays," they add.
You can start making your spending plan for next year's holiday season now
Lastly, Vargas recommends planning for the 2024 holiday season now.
"Think about a ballpark number of people that you want to be buying gifts for, and a ballpark average budget that you would like to spend on each of those folx," they add.
For example, for 12 people, if you want to spend $50 each, then you would need to save $600 to afford that. Vargas says, "Maybe you can start a savings fund where you automatically put $50 deducted into your high-yield savings every month, and by the time you get to the start of December next year, you'll have $600 to go bananas and holiday-shop for everyone on your list."