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  • Writer's pictureDavid Peters

How to Budget for the Holidays

Updated: Jun 24

This holiday season, experts predict consumers will spend around $966 billion in the United States alone. However, as seen in the following interview, 60% of those consumers haven't even considered a budget.

So what are some easy steps you could take to get through the holidays without breaking the bank?

Cheddar News Senior Anchor Kristen Scholer recently invited me on to discuss the topic.

Watch the Interview

Read the Transcript

Kristen Scholer: Well, holiday shopping season is here with consumers expected to spend up to $966 billion this year, according to the National Retail Federation. Sticking to a budget can be challenging this time of year, especially with the allure of deals and the festivities, but sticking to a budget is very important. So joining me now with expert tips on how to navigate this season is David Peters, financial advisor and founder of David Peters Financial Group. David, welcome to the show.

David Peters: Thank you for having me.

KS: Alright, so we know that consumers still expect to dole out a lot of money. What should they know about creating a budget that will work for them this holiday season?

DP: Well, I think that your poll here really sort of illustrated the problem. I think that the biggest thing is that people need to think about how much they wanna spend ahead of time, and probably also talking ahead of time to those people we are planning to buy for. A lot of times, people are exchanging gifts and so just making sure that we've set expectations kind of ahead of time about what is appropriate to spend.

KS: So what's the best way to plan out what we should buy and what maybe we should not buy – even if the deal seems attractive?

DP: I think that the best way is to just stick to the budget that we have and to not get outside of it. And the allure of deals, as you said: I think it is tough to avoid [that], but that's really what we need to do. Also, I think making sure that we don't put more things onto a credit card than we can afford. And we making sure that if we do put things on credit, that we're able to pay those things off right away is the way to go. A lot of people come outta holiday season with a lot of credit card debt.

KS: Yeah. It's definitely a tough time. That's for sure. Rates are very high. We have to remind our viewers, decades high, in fact,in some cases. Record high that we see on some of the credit cards. So of course, everyone's scenario is different.Some people are single, some people have a large household, a small household, a lot of things in between. So what's the best way to approach it, let's say, if you have a large household maybe versus a smaller household?

DP: Yeah. Well, I, I come from a big family, and I can tell you that one of the things that we do is we actually draw names to figure out who to buy for. So not everybody buys for everybody else.

And so I think that's one way to kind of control things and try to make sure that we're not necessarily blowing everybody's budget. I think also being creative on gift giving and how we spend time together can also offer some opportunities as well. So, you know, sometimes with larger families maybe doing an activity together or, you know, perhaps deciding to do a charitable event together that sometimes can be a good substitute for gift-giving without blowing anybody's budget.

KS: And let's just remind our viewers here, David, best practices when it comes to using a credit card – especially this time of year.

DP: Yeah. Credit cards are convenient. Especially if we're doing things like shopping online, credit cards are going to be pretty hard to avoid. I think that the big thing to watch out for is just making sure that we understand that we gotta pay that money back. And so if we can pay off those credit cards right away. I think that helps us visualize how much we're really spending so that it doesn't get outta control. I think also watching out for promotional APRs and things like that are important as well because those promotional APRs go away pretty quick.

KS: Right. So what do our viewers need to know if they are enticed by some of these deals? Just on the credit card alone, uh, let alone some of the products that they wanna buy.

DP: Well, just keep in mind that the promotions do have a limit, and eventually you're going to have to pay that money back. And so we just want to make sure that if we do take advantage of something like a promotional APR, that – again – we try to pay that off right away. Making sure that you manage your cash flow, especially during holiday time, is very important. As you said, Kristen, people tend to spend a lot of money during this time, and it's not unusual to carry a lot of debt into the new year, and that's no way to start. And so just making sure that we are tracking everything that we're spending and that we stick to the limits that we have set out: That's going to be the best way for us to navigate the holiday season.

KS: Any advice for how to take advantage of Black Friday and Cyber Monday without it taking advantage of you?

DP: Yeah, I think that the deals out there on Black Friday and Cyber Monday can be great I think, but, getting back to the poll that we started with: A lot of people just haven't even thought about how much they want to spend. And so I think getting in ahead of time and just making sure that we know what we wanna spend is important. If we are trying to take advantage of maybe things like travel deals and things like that, that’s also can be something that we can take advantage of here in the next couple of days. If you need to travel, traveling in the middle of the week can sometimes save us money. So there are some ways to not get carried away, but it takes some discipline and thinking about what we wanna spend ahead of time.

KS: Okay. What should people know about buying gift cards as presents?

DP: So, I think that gift cards can sometimes be a great gift. I think one thing to know is that if you do have a balance left on a gift card, there are some websites that will buy the remaining balance from you – not for the full amount, but for something. Um, so I think the gift cards can work well. But again, it's about setting limits on our spending more than anything else.


If a gift card is the way to [achieve that], then I think that that's just fine go-to gifts for the holidays.

KS: David, I'm sure you have some creative answers here, knowing that you come from a large family, right? So I think gift giving is something that you might be very good at.

DP: Yeah. Well, I am a financial advisor through and through, and so a lot of times, what I like to give is to make contributions to a Roth IRA for one of my family members. That's something that I like to do. Also making contributions to donor advised funds for some of my family members and some of my friends who like to give to charity. They can choose where that money goes. Those are are gifts that I like to give. Also, making contributions to 529 plans for kids is great – especially with the high cost of education right now.

KS: Very good tips. David Peters, financial advisor and founder of David at Peters Financial Group, thank you!


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