By: Robbin Narike Preciado, Union Bank Regional President for Southern California
The holidays are here and it’s a time when many of us tend to over-spend. In fact, Union Bank recently revealed findings of a national survey that uncovered some interesting spending habits among consumers a cross- section of generations, from Gen Z to Baby Boomers. The survey revealed the following:
Three in 10 people in the U.S. admit to spending more money than they should just to impress family and friends.
Two out of three U.S. consumers will give themselves a budget, however it will still take 33 percent of people six months to pay off credit card debt they incur during the holidays.
One in five Gen Zers plans to spend big bucks on Mom and themselves, possibly adding up to over $500 spent on the two gifts.
Four in 10 respondents admit they feel pressure to spend on people they don’t want to, a number that’s even higher among Millennials (56 percent).
Many respondents said they’re as likely to buy gifts for their pets as they are for Grandma and Grandpa, while grandparents prioritize their grandkids, with 96 percent planning to give them gifts.
Relationships are lacking communication during the holidays, with half of those in relationships admitting they don’t agree with their significant other about how much to spend on each other.
The holidays don’t have to be financially stressful. By applying a few smart practices, the season can be enjoyed the way it was intended, spending quality time with family and friends.
Here are some suggestions to stay on track:
Remember your goal and remind yourself of this each time you’re considering going over budget.
Create a plan. Create a budget and stick to it. Write a list of all the people you want to buy for, and include other related holiday expenses, such as travel costs, hostess gifts, gift wrap, holiday groceries, etc., and make sure to include a dollar amount for each that works for your wallet. It’s OK to use your credit cards for holiday purchases, but make sure you have a plan to pay them off promptly to avoid paying interest on those expenses.
Scale back your shopping list. For larger families, groups of friends or even co-workers, suggest a Secret Santa or White Elephant gift exchange to reduce the need to buy a gift for everyone in the group.
Be transparent. Be honest with your friends and family about what’s feasible within your finances. Putting your savings at stake for an annual gift – whether it’s for someone you want to give one to or not – is not necessarily worth the risk.
The bottom line is that establishing a budget and sticking to it will prevent you from having a financial holiday hangover that can persist well into the new year. Remember, the holidays are not just about expensive presents, consider giving the gift of being present and in the moment.
About the Author
Robbin Narike Preciado is a managing director and regional president for the Regional Bank at MUFG Union Bank, N.A. She oversees Branch Banking in Southern California.
Narike Preciado is the Chair of the board of the Orange County Business Council and serves on the board of the San Diego Regional Chamber of Commerce. She has served on the boards of the Little Tokyo Service Center, Orange County Pacific Islander Coalition Alliance (OCAPICA) and PBS SoCal KOCE Public Television.
This article reflects the thoughts and opinions of the author and is being provided for educational and informational purposes only. It should not be considered financial or tax advice. Please consult your financial or tax advisor about your situation.