With the season of giving around the corner, it’s a good time to plan your holiday spending. The average person will spend $1,007 on shopping alone, according to the National Retail Federation.

Whether that’s within or outside your means, Duluth experts shared ways to step into the season of giving and sidestep a post-holiday financial hangover.


Write a list of whom you’re looking to connect with and your gift recipients. List your bills and compare that to your available money. Be realistic, and from that, you’ll see what you can afford or what alternative plans can be made.

Having it written down makes it easier to check in with your expectations, said Niki Pechinski, financial wellness educator at the University of Minnesota Duluth. If we don’t know our expectations or what we want to participate in, it can be harder to negotiate what we say “yes” to and what seasonal spending might look like, she said.

Include any charitable giving to your holiday spending plan. Keep in mind travel and miscellaneous costs, such as work potlucks. “I wouldn’t exclude time, either, whether that’s volunteer time or party-planning time or travel time. That’s a really valuable resource,” she said.

It’s helpful to look at what you spent last year. And while the consensus was to keep holiday spending in mind year-round, it’s not too late to save.

“You never have too little money to save,” said Kassy Burr, coaching and counseling supervisor at Community Action Duluth. “Even if you can save $5 a month, that’s a good start, and it’s building good habits that could come in handy in the long run.”

Once you have your list, check it twice. And over and over again.

Keep it in your phone or in your wallet as a reminder. Having those goals articulated in a dollar amount of what you’re willing to spend can motivate you to stick to it, Pechinski said.

Also, know yourself and your shopping partners. If you find you spend more when you’re with certain person, consider going solo, or bring along someone who might help hold you accountable.

Ways to pay

Shopping and the giving spirit can lead to a financial hangover, and debt still has to be settled.

Paying for something unnecessary with money you don’t have, while adding interest, is making money for someone else, and potentially damaging your credit in the process, said Hugo Hietapelto, financial planning program director at UMD.

“There’s nothing wrong with using the credit card to purchase something, as long as you’re not carrying that balance,” he said.

There are certain rewards with using a credit card, such as earning cash back, but our experts suggested being mindful going into it.

Paying with a card vs. cash can mean a higher level of disconnection from your money. That can lead to spending beyond your means, Pechinski said. Another thing to consider is your available credit.

The best credit scores and the healthiest accounts have a revolving credit that does not exceed 20-35% of their limit. So, if you have a $1,000 limit, you probably shouldn’t spend more than $200-$300 during any bill period. And you’ll want to pay that off in full and on time, Pechinski said.

Credit card dollars are there if you need them, but depending on your goals, it might be net harm, said Pechinski. Use that as motivation to say, "I’m not willing to damage my credit history for this.”

Hietapelto suggested making a game of holiday spending.

If you’ve allotted $30 for someone, jot down ideas in that price range that meet that person’s preferences. Bargain-shop, compare prices and use coupon codes if you’re buying online.

And, having the budget or savings in place means you don’t need to use credit, he added.

Homegrown options

Be open with friends and family about finances. You don’t have to spend money to show someone you care. Share gift costs with a relative or family member, or set up a gift exchange. Some giving traditions can be countered with a different suggestion, like the gift of time.

Quality time in this fast-paced society can be a true gift, and the Twin Ports does a great job of offering family-friendly, and often free, events, Pechinski said.

Hietapelto suggested homemade gifts, such as a frame with family photos or a printed photo on canvas. It’s about the memories we’re making. Spending money on trinkets doesn’t make the most powerful impact.

Year-round, Hietapelto notes what his loved ones want when they mention it, and he pays attention to seasonal deals and discounts.

Track seasonal spending and check in with yourself in 2020 to look at how it went and how you want it to look ahead. Then, consider a system with envelopes, or a savings account at a bank or credit union.

“Pay yourself first. Put money into savings as if it were a bill,” Burr said.

A look ahead

Culturally, Americans aren’t comfortable talking finance. It’s seen as taboo, and it’s not always the case that families are collectively having transparent conversations about money, Pechinski said.

“People have a lot of shame around their money. They associate how much money they have or even material things with their worth. That gets in the way of when people are trying to move forward with goals,” added Burr.

It can feel paralyzing to look at something as sensitive as finances, but applying curiosity to the topic will help you make an informed decision. “Treat this like a fact-finding mission,” Pechinski said.

Financial goal setting can be incredible self-care, whether that’s looking at a repayment plan or how to approach the holidays in a way that’s honest for you, added Pechinski.

That might change conversations with loved ones about what the holidays look like. If you’re trying to save or you don’t have much to spend, be explicit about that.

It can be an opportunity to talk about the “magical qualities of this season through connection rather than through gift-giving,” she said.

(Getty Images)
(Getty Images)

Tips to avoid holiday debt

1. Make a list and set your budget

Write down whom you're giving gifts to, include a dollar amount that suits your budget for each, and stick to it. Include travel costs, dining, potlucks and time. Prioritize the list.

2. Use your imagination

Share gift costs with a relative or family member. Host a potluck. Set up a gift exchange. Consider making something by hand, and don't underestimate the gift of quality time. Whatever you choose, be open with friends and family about your spending goals so you can manage plans and expectations.

3. Shop wisely

Keep your spending plan handy. Bargain-hunt, compare prices and consider your shopping pals. If you're prone to spend more while with a particular person, go solo, or shop with someone who might help hold you accountable to your goals.

4. Payment

Paying with cash can make a better connection between you and your money. But if plastic is more your jam, go debit or be savvy about credit card rewards. Pay off your balance right away and on time to avoid damaging your credit score.

5. Track

Note your spending this year and use it as a resource for saving for next year's holiday season. Consider some sort of system in an envelope or a savings account through a bank or credit union. Set a business meeting with yourself for the upcoming year to set goals. It could make for a hollier, jollier outcome next year.