Holiday shopping season is coming soon. Here's how to avoid overspending

The holiday season is fast-approaching and the unofficial kickoff to the holiday shopping season on Black Friday. It also means the possibility of overspending.

All consumers spent upward of $9 billion last year on Black Friday, and $11 billion on Cyber Monday, both record breakers despite inflation affecting prices and thus a possible expectation people would spend less. It likely will be another record-breaking year, according to the National Retail Foundation. It estimates consumers will spend nearly $900, on average, for gifts, decorations, food and other key seasonal items, a roughly $42 increase from 2022.

So, the time to start planning for holiday season spending is now, not later, says Certified Financial Planner Gregg Murset, vice president of Bennett and Porter Wealth Management and Insurance in Scottsdale, Arizona, and CEO of Busy Kid, a financial literacy mobile application for youth.

He has four key suggestions for holiday spending.

Make a plan

People often can go into the holiday season without a spending plan, Murset said.

"If you just start browsing, there are traps that can get you. I was searching for something on my phone, I transferred to my computer and five minutes later, Amazon was asking, 'Do you want to continue looking at this,'" he said. "So, if you don't have a plan you are going to get in trouble."

While not glamorous, it may be time to dust off those spreadsheet skills. This way you give yourself a spending limit and then plan accordingly on the amount spent per person, especially if you are buying gifts not only for immediate, but extended family members, Murset said.

"Sitting down and planning it out literally on a spreadsheet makes a whole lot of sense," he said.

Out of all of Murset's advice, this tip is paramount, he said. By allocating a max dollar amount overall, and breaking that down by family members, you can keep spending relatively even among all of them.

"You could say, 'Cousins, I'm going to spend $40. Siblings $100. Spouse $300.' ... That makes it a lot easier to stay within your spending plan," Murset said, adding that keeps things even with any family members who may "compare notes."

Shop for needs, not wants

While it seems counterintuitive with the holiday season, it is better to put a focus with gift-giving on what is needed, not wanted by the recipient.

A person's child may both want and need a new cellphone. That doesn't mean you have to get the top-of-the-line newest model, especially if an older model phone is able to run the most current phone operating system, Murset said.

"Needs versus wants can be a real game changer," he continued. "Use places like Facebook Marketplace or Offer Up. These are the kinds of places you can save a lot of money. I bought a weight set six months ago and saved about 50% doing that and it wasn't even used. Brand new stuff."

Shop early and save

Prior to the COVID-19 pandemic, national retailers, such as Walmart, would open their doors in the evening on Thanksgiving for an early start on Black Friday shopping.

That no longer is the case, with many retailers now opting to be closed all day on Thanksgiving. Now it is more likely they offer deals and specials either over the week of Thanksgiving and into Cyber Monday, or even earlier in the month in the lead-up to Black Friday.

So, keep an eye out for those early deals and specials through both online and brick-and-mortar retailers, Murset said.

"There are great opportunities to look at all the stuff you want to get early, bookmark pages, keep an eye on things and know what you are going to buy before you get there," he said, adding in the case of Amazon, it usually will have hourly deals on different items in the days before Black Friday and Cyber Monday.

Keeping an eye on the early deals also means you're not having to get out in the possible hullabaloo of Black Friday, Murset added.

Don't buy your own present

Murset, since part of his work as a financial planner is youth financial literacy, he does not want parents to just give their children a couple of $20s and then say, "OK, go buy something." In that way, a parent essentially has bought their own present in this circular exchange of money, he said.

He instead wants parents to give their children a reason to earn the money, either through chores or some other task.

"(This could be) relatives that need their lawn mowed, or a neighbor. You can babysit, or rake leaves. Later in the season, it could be shoveling snow. There are several things kids can do to get out there to earn money, so you aren't buying your own present," Murset said.

The Busy Kid app developed by Murset explores three aspects of financial literacy.

"It teaches kids how to earn money and then manage it properly in the Busy Kid system," he said.

Kids earn money through chores, other tasks and maybe even an allowance and then the money goes into savings and investment, donations and spending money.

So, when children earn money a percentage of it automatically goes to savings on a weekly basis, and then they also can learn about stock investment and charitable donations with those earnings. The rest goes on a debit card from which the child can spend.

"We are trying to teach that next generation to be a lot smarter than we were," Murset said.

Black Friday, Cyber Monday by the numbers

When looking at spending on Black Friday and Cyber Monday, a survey by Nielsen IQ last year found the top two areas for spending on those days were clothing and electronics.

Breaking the National Retail Foundation spending projections for this holiday season down further, it expects consumers to, on average, spend $620 on gifts (the top one being gift cards) and $255 on seasonal items of decorations, candy or food.

The foundation also found 43% of people already are doing their holiday shopping. Reasons for this early shopping is to spread out their spending (60%), avoid the stress of last-minute shopping (46%) and avoid crowds (45%). Even so, at least 60% of respondents said they expect they still will be shopping into December.

More than half of shopping is expected online.

Charles Dunlap covers local government, community stories and other general subjects for the Tribune. You can reach him at cdunlap@columbiatribune.com or @CD_CDT on Twitter. Subscribe to support vital local journalism.

This article originally appeared on Columbia Daily Tribune: Financial planner gives Black Friday, Cyber Monday spending advice