According to a recent study conducted by T. Rowe Price (2015 Parents, Kids & Money Survey), 62 percent of parents say they overspend on their children during the holidays. On top of that, 7 percent admit to tapping into retirement funds to support this spending.
Why is this important?
As you shop for friends and loved ones this holiday season, it is imperative to your long-term financial health that you are fiscally-conscious about gift spending. An extravagant gift for someone else today may be a burden to you tomorrow. Long-term goals like saving for retirement should take priority over high-priced gifts. Further, the same study found parents who overspend are 50 percent more likely to argue.
Curb your holiday spending
Ensure you don’t become someone who feels the need to dip into retirement funds this holiday season by following some of these quick guidelines.
- Outline a strict budget to guide for your total holiday spending.
- Budget based on your own short and long-term financial goals.
- Give personalized gifts rather than expensive gifts.
- Give yourself time to find the best deals and options that will fit within your budget.
- Pare down your holiday shopping list to include the most important people in your life and consider a homemade or small gift for others.