Spending for the holidays? Topeka financial advisers say to start with payments to you.

Consumers have been willing to spend this season. Financial advisers are urging them to save as well.
Consumers have been willing to spend this season. Financial advisers are urging them to save as well.

As holiday shopping season has arrived, retail sales remain steady. Experts are recommending consumers save up if able, however.

“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” said National Retail Federation president and CEO, Matthew Shay in a news release.

Holiday retail sales in November and December were estimated to "grow between 6% and 8% over 2021" in comparison to the 13.5% growth a year ago, according to the NRF's November economic review.

Now, even with inflation, the willingness to spend has been stable for the better part of this year.

'The more people spend; the more prices raise higher'

Holiday retail sales in November and December are estimated to "grow between 6% and 8% over 2021."
Holiday retail sales in November and December are estimated to "grow between 6% and 8% over 2021."

Mark Reinert, owner of Reinert Wealth Management in Topeka, said the more people spend the more that allows prices to be raised higher.

"Saving is always a good idea. In fact, the very first thing you buy — every month — should be a payment to yourself," Reinert said. "You should pay yourself 10% to 15% of your income every month."

Reinert emphasized that the beneficial part of the local economy is people are working and "the unemployment rate is very low," which can assist in maintaining low spending habits.

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The Topeka Capital-Journal reported last month that Kansas Department of Labor statistics showed unemployment hit a 46-year low of 2.3% in May but has since increased slightly. The labor market data released showed October’s seasonally adjusted employment rate was 2.8%, which is below pre-pandemic levels.

Barbara Duncan, partner and senior wealth adviser at Clayton Wealth management, said when looking ahead in the new year, analyzing finances will assist in keeping a consistent financial plan when consumers find the urge to spend.

“When I say a plan, it’s really an overall plan for — ‘Are we saving enough to meet these future goals?’” Duncan said. “It’s really knowing, what do we need to be saving for these goals, either now or in the future and not letting the short-term movement of the market derail that.”

Key factors to include when considering a financial plan include knowing what your goals are now or in retirement, how much are you saving toward those goals, how much do you have saved already and how much have been made toward investments.

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National Retail Federation expecting a growth in GDP

Jack Kleinhenz, chief economist for the NRF, said in a December economic review release that GDP is expected to grow "very gradually" in the closing months of 2022.

"Consumers are stepping back to a degree and changing how they allocate their resources, spending more on food and less on other retail goods," said Kleinhenz.

The U.S. Bureau of Labor statistics will release Consumer Price Index numbers for November on Tuesday. The most recent inflation numbers show prices increased 7.7% over the past 12 months. Groceries have seen higher inflation at 12.4%, while commodity prices increased 5.1% excluding food and energy.

Duncan said inflation is something that needs to be “factored in” to planning when considering this year’s inflation rates have been higher than average, but it doesn’t define consumer’s initial financial planning to be “up in smoke.”

"At the same time, spending on services has been hearty in recent months and there is no reason to expect that it will moderate even with the continued upward pace of service sector inflation," said Kleinhenz.

Keishera Lately is the business reporter for the Topeka Capital-Journal. She can be reached at Klately@cjonline.com. Follow her on Twitter @Lately_KT.

This article originally appeared on Topeka Capital-Journal: Topeka financial advisers have consumer advice during holiday season