Holiday shopping has never been more convenient. One-click checkouts, digital wallets, AI-powered shopping tools and buy now, pay later services make it easy to purchase gifts in seconds. But that convenience can also make it harder to track spending, especially when purchases are spread across multiple apps, credit cards and payment plans.
According to NerdWallet, 38% of holiday shoppers plan to use buy now, pay later services this season. While these options offer flexibility, overlapping payment schedules can quickly add up and leave consumers with unexpected bills in January.
Glenn Welch, president and CEO of Freedom Credit Union, which serves Western Massachusetts as well as, Hartford and Tolland counties in Connecticut, encourages consumers to approach holiday spending with a plan.
“It’s easy to get caught up in the excitement of holiday shopping, especially when making a purchase is just a click away,” said Welch. “Establishing a budget and thinking through how you’ll pay for purchases can help you enjoy the holidays without creating financial stress in January.”
Freedom Credit Union offers five ways to keep holiday spending under control:
- Set a realistic budget. Account for gifts, travel, entertaining, meals and charitable giving. Establish spending limits and track purchases as you go.
- Watch buy now, pay later purchases. Smaller installments can seem manageable, but multiple payment plans can quickly add up. Keep track of balances and due dates before taking on additional payments.
- Use credit cards strategically. Whenever possible, charge only what you can afford to pay off in full. Carrying a balance can make holiday purchases more expensive as interest accumulates.
- Think twice before chasing a sale. Limited-time offers and social media promotions can create pressure to buy. Consider whether you really need the item and whether the discount represents genuine savings.
- Start January with a plan. Review holiday spending, identify outstanding balances and create a repayment plan. Consider saving a little each month throughout the year for next holiday season.
“A little preparation now can make a big difference,” Welch said. “The goal is to enjoy the holidays while keeping your finances on solid footing for the year ahead.”