COMMON CENTS: Budgeting for an expensive holiday season

COMMON CENTS: Budgeting for an expensive holiday season

SOUTH BEND, Ind.-- From gift giving, to home cooking, to party hosting, the holidays are expensive. Americans are dealing with record inflation, but whether we like it or not, the holidays are here.

At ABC57, we thought it would be a good time to launch a new series centered around saving you money, around the holidays and after!

For shoppers like Sierra Westphal, this year, holidays are hitting bank accounts a bit harder.

"Day by day, honestly," Westphal said. "We're just cutting things out where we have to and making time up for it."

She is feeling the effects of record-high inflation along with uncertain job security.

"Honestly, any day now, I could go into work, and my boss will be like, 'hey, we don't need you anymore, here's your layoff, you're done for the season.' and I don't go back into work until March. So, all my savings have been for the layoff. Saving for the layoff," She said. "And now, here we are, we're like, 'oh crap, Christmas.'"

Westphal said saving money is no simple task, and with the holidays upon us, her priority is cherishing time with her family and her one-year-old, Ryder.

"My fiancé is like, 'well, what do you want for Christmas?' I'm like, 'let's just focus on him,'" she said.

So many are feeling the strain on their wallets this holiday season.

In fact, according to the PNC Christmas Price Index, where they measure the cost of the gifts from the classic holiday song, "The Twelve Days of Christmas," costs are up 10 percent from last year.

For Mike Bernard with Korhorn Financial Group and The Wise Money Show, it's about rethinking how you budget.

"Not a lot of people have gotten a 10% raise," Bernard said.

All income should be split into three boxes: an emergency fund, a monthly expenses fund, and a non-monthly expenses fund.

"What are all of the non-monthly expenses? You're going to say yes to them, they're going to come up, but they don't happen every single month. And those are the ones that tend to catch us off guard. Christmas is one of those. The holidays are one of those," Bernard said.  

He suggests adding up the cost of the holidays this year, diving it by twelve, and putting that amount aside each month for next year.

"If you haven't been able to be proactive and save that money up in advance, this is especially hard. It's hard on all of us because of inflation, everything costs more," he said. "It's especially hard if you're still trying to play catch-up."

For people in that position, it's about seeing what you can spend this month, while still being able to pay it off completely in January.

"Where people get in trouble, is they overspend, thinking 'I'll have plenty of time to pay this off,'" he said.

But no matter what, Bernard said not to forget the joy this holiday season.

"Some areas are starting to show weakness, and retail is one of them. So, there are more deals out there than some of us would have anticipated 6 months ago," he said. "So, you can find deals."

"Common Cents" will be a weekly series this holiday season and beyond, so we'll have another segment next Thursday on ABC57 News at 6.

And we want to hear from you! Send your money-saving holiday hacks to possibly be featured in this series to [email protected].

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