There is a game some families play as the holidays approach: who will spot the first holiday decoration to adorn the aisles of their favorite store or shopping mall? These pre-season decorations are subtle reminders that tell us the holiday shopping season is approaching. It seems to happen earlier every year as stores jostle to be the first to offer pre-Black Friday deals in the hours and days before Thanksgiving. What’s more, Covid-related delays in manufacturing and global distribution of toys and electronics are said to jeopardize the availability of some of the holiday’s most popular gifts. “Shop early to get the best deals,” say our newspapers, economists, and social media feeds.

As retailers encourage us to shop earlier, consumers bear the cost as attractive holiday deals eat further into November’s budget for perceived savings. For people on a fixed monthly income or budget, this holiday spending creep can throw you off your savings game and create a temptation to shop, reinforcing lousy spending habits.

At NFCC, we want to help you develop good spending habits and resist the temptation of the holiday shopping season. While there are legitimate reasons to seek out deals and shop early, it’s essential to understand our motives, align our budgets, and make intelligent decisions about why we shop. Before you buy the last PlayStation on the shelf, consider the following guard rails to get you safely through the holiday spending season:

Set some rules on the gifts you give

Consider the gifts you buy each year: something for your kids and closest girlfriends, an extra tip for your hairdresser, or a gift certificate for a teacher at school. Perhaps you set limits: $50 to spend on friends, $25 for cousins and allow the kids a small budget to spend on their closest friends. The costs quickly add up. Here’s a solution called “Three Circles” and it’s designed for any budget:

First, you’re going to need a sheet of white paper. Note your holiday budget at the top of the paper. Next, draw three circles beginning in the middle with a small circle, a wider circle around it, and lastly, an even larger circle around the previous two, looking something like a target. Each circle is going to have a portion of your budget. For example, if your total holiday shopping budget is $1,000, you may write $500 in the inner circle, $400 in the middle circle, and $100 in the outer circle, totaling $1,000. Now the hard part: inside each circle, list the names of who gets a gift. Include everyone, even the hairdresser. This is now your quick and easy budget: if you have five names in the center, you have $500 total to spend on these five people, and so on. Think hard about who gets a gift and eliminate where possible.

Understand that a gift is in the giving

Does gift-giving feel like repaying a debt? During the holiday season, it’s easy to fall into the trap of spending money for emotional reasons. When someone buys you a gift, do you feel compelled to offer them something of a similar price? Will you gift them something of equal value, or do you signal your success by giving them more in return or, for that matter, less? This is a holiday tax, and you pay it every time you fall into the trap of polite reciprocity – giving to those who give to you. Reciprocating a gift because of the guilt you feel is not the true spirit of gift giving and it’s an expensive practice, like giving away your ATM card for others to draw on. This season, break the habit. Instead, offer a heart-felt thanks, maybe a warm smile, and understand that the gift may be in the giving.

Understand why you shop

As retailers encourage you to shop early, incentives and savings will entice you to open your wallet. While ambition to save money is admirable, stores have a lot to gain by promoting a longer, earlier shopping season. Shopping can be fun, impulsive, and an emotional experience – but it is not permission to spend beyond your means. Before diving into Amazon’s pre-season deals, take a minute to have a conversation with yourself about motives. Why are you shopping today? Are you looking for an item on your list or being impulsive? Have you compared prices to find the lowest cost? Is your ego asking you to spend more than you can afford? Are you shopping for a popular item for fear of missing out?

As you head into the holidays, it’s a good time to revisit your financial goals. Along with your spouse, kids and loved ones, chart your financial progress through the end of the year. If you’re not already using NFCC’s budget tracker, you can download a free copy here. Avoid regrets when the January credit card bills arrive by playing it smart. Don’t fall prey to the “permission to shop” attitude that comes with Black Friday promotions and the fear of missing out on the latest toy. Have a solid plan that spreads joy to your friends and family without enforcing guilt, emotional spending, and the regret of January’s credit card bills.

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