The Hidden Costs of the Holidays

Every January, it happens to many shoppers: You look at your bank or credit card statement and feel as if you’ve awakened to a financial hangover. You figure you must have blanked out for most of December, because there’s no way you would have spent so much if you had been thinking clearly. In fact, you are pretty sure you set aside a certain amount of money for gifts. So what happened?

The holidays happened, that’s what. It turns out, you probably aren’t just spending money on gifts. Actually, gifts may be the least of your worries.

According to the National Retail Federation’s Holiday Consumer Spending Survey, which polled 7,547 consumers in October, Americans will spend an average of $459.87 on gifts for their family this year. But there are a lot of hidden costs related to the holidays that you may be neglecting to factor into your monthly spending. If you want to avoid another crushing January hangover, here are some hidden costs to consider paring down.

Decorations. A Kmart and Sears survey of 1,000 adults in November indicated that 34 percent of Americans plan on spending $100 or more this year on holiday decorations. Even if you don’t spend that much, you’re probably going to buy something: According to the survey, 82 percent of Americans plan to buy new decorations.

Wrapping paper. According to research from Hallmark, Americans spend approximately $3.2 billion a year on wrapping paper. That presumably includes gift bags, which, according to Hallmark, are the No. 1 way consumers wrap gifts. In any case, the more gifts you buy, the more wrapping paper — or gift bags — you’ll likely use. Budget accordingly.

Food. According to the NRF survey, Americans will spend an average of $104.74 on holiday-related food, which could include everything from going out to restaurants with the family to buying a bottle of wine for a party. And, of course, this is just the average — you may end up spending far more.

Self-gifting. The NRF’s survey indicates that this year, 57 percent of consumers will buy gifts for that really special someone in their lives: themselves. Yes, odds are likely that you will buy a gift for yourself as you sift through the sales and shop for your loved ones. Nothing wrong with that, of course, but have you budgeted for it? According to the NRF, if you self-gift this year, you’ll spend an average of $126.68. Hopefully you’ll get yourself something good.

Gift cards. You might be thinking the only gift cards you’ll purchase will be factored into your gift budget, so no need to discuss these, but you should still take a special look at gift cards and how often you buy them.

You probably purchase a lot of gift cards. According to a gift card survey NRF conducted in November, polling 6,593 consumers, gift cards are the most-requested item on holiday wish lists for the eighth year in a row; Just over 60 percent of consumers surveyed said their most-preferred present is a gift card, and the average shopper will spend $172.74 on gift cards this year, according to the NRF.

Keep in mind that every time you buy a gift card for someone, you rob yourself of the chance to buy a thoughtful gift for a family member, friend or co-worker — and one you just might find on the clearance rack. You might have bought a $7 shirt for a nephew instead of giving him a $25 gift card to his favorite store. Sure, your nephew is worth it, but if you’re budgeting $200 for gift cards, you’ve locked yourself into that price — unless you purchase the gift card through a discount exchange like GiftCardRescue.com or MonsterGiftCard.com.

The gifts you don’t plan on buying but do anyway. Unless you’re really disciplined, have a small circle of family and friends or are a Scrooge, there are probably some gifts you’ll purchase that weren’t part of your holiday budget. A co-worker buys you a fruit basket, and you feel obligated to purchase something for him or her in return. Or maybe you planned to buy your favorite aunt a gift and then, on the spur of the moment, decide to get something for your second-favorite aunt, too.

Even if you don’t buy unplanned gifts, you’ll probably buy some gifts for people outside your family. The NRF survey indicates that this year, consumers will spend $80 on gifts for friends, $26.23 on gifts for co-workers and $30.43 on others, which might include your baby sitter or even your pets. There may also be people you want to tip — a doorman or a gardener or newspaper carrier — and those cash gifts can make your bank account smaller just as much as the gifts to your family and friends.

Everything else. Are you going to be driving to a lot of stores to shop, or traveling to spend the holidays with family and friends? If so, make sure to budget for gas. Do you tend to go to more movies during the holidays? Movie tickets and buckets of popcorn aren’t cheap. Think you’ll take the kids on more outings than usual during their winter break? Are you a last-minute shopper, and thus likely to rush into stores and overspend in general? Are you buying greeting cards or sending out holiday newsletters with a family photo?

Of course, you can go overboard with planning, and perhaps micromanaging your holiday budget will suck the joy out of the holidays. But thinking about everything that’s on your agenda may at least make the January financial hangover a little less painful. You may still be flat broke at the start of the new year, but at least you’ll know why. That’s progress, isn’t it?

More from U.S. News

10 Strategies From Super-Saver Shoppers

15 Ways to Avoid Holiday Debt

22 DIY Holiday Gift Ideas

The Hidden Costs of the Holidays originally appeared on usnews.com

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