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Smart Holiday Spending Transcript

Susan Milender: Welcome to thriving on the prairie. This is a podcast exploring issues concerning families and communities that inspires North Dakota movers shakers and community difference makers to engage in lifelong learning. I'm Susan Milender, NDSU Extension family and community wellness agent and I'm located in Barnes County. And today I have the honor of visiting with Carrie Johnson, who's our NDSU specialist for family and  personal finance. So today, Carrie, we get to discuss holiday spending or maybe how not to spend during the holidays. And, you know, to start off, Carrie, I just want to say that the holidays come every year at the same time. And every year, I'm surprised that it snuck up on me.

Carrie Johnson: Yeah, so we're quickly entering this holiday season of 2020 you know this year, more than others, has been a difficult year to plan for the future. So it can really almost feel like ‘The Nightmare Before Christmas’. Ideally, people would have started saving for the holidays. Shortly after the New Year, in January. But many people’s circumstances changed so rapidly this year or uncertainty is really impacted people's ability to save. It does feel like the holidays came a little earlier this year than they typically do.

Susan: I know Carrie, just really seriously snuck up on me and you know, I love that you said, ‘The Nightmare Before Christmas’ because I can continue with that thread. By saying that I don't want to be a grinch this holiday season, even though I didn't really plan. So, you know, after all, this is the season of COVID. So who can really plan? Every day is totally different. Right?

Carrie: Exactly. 

Susan: So, you know,  …..And I think that the holidays are stressful enough. And then we add this unpredictable nature of our economy and shutdowns, and maybe like less hours at work or less items on the store shelves, or….. gosh, delayed deliveries and not to mention that social distancing factor. So I guess I could go on and on, but, you know, Carrie I sound like a negative Nelly, sorry.

Carrie: Yeah. You know, I think we could be negative about the 2020 holiday season. Or we could change our attitude and find that silver lining. Even though this year might look a little different than it has in the past, it could really be an opportunity to re-envision and reimagine what we think of the holidays. A word I've been trying to use a lot lately is pivot. So now I know not everyone likes change, family holiday traditions are a big part of this time of year. And it's really fun to dream about something that looks like one of those hallmark movies or a Pinterest picture, but we really need to be careful not to compare ourselves with others. Everyone's circumstances are different. The reality is that if we're strategic and we make a plan, we can really find ways to celebrate the holidays this year without breaking the bank.

Susan Milender: Yeah, so, you know, Carrie, right now as you were talking, I was thinking about Christmas coming up and all of the holiday traditions. So, you know, if I were sitting on Santa's knee right now. I think that I would ask him for that holiday season filled with sugar plum fairies for everyone, just like you said, I love that Pinterest pictures because I had those rolling through my mind. But you know what the reality is with this year, some people are facing tough financial times. And yet others have had that good fortune of being able to continue on their regular path. So, you know, either way, we all want to be really smart with our money, and we don't want to end up with that debt hangover in January. So I'm really thankful that you're going to walk us through some tips for our finances in this holiday season.

Carrie Johnson: Yeah, exactly. And there are some tips that we can all take away, like you said, whether you've had some issues with financial or some financial issues recently, or things are status quo and they’re normal. Everybody can always look at some financial tips in their lives. So the first thing I really wanted to share this time of year is to set a holiday budget, which is going to be different than your typical household monthly budget. You know, how much can you realistically spend without causing future financial problems this holiday season? Will you spend the same amount that you typically do that you have in past years? Or are you gonna be spending more because you might not be traveling? Or are you going to be spending less just to save for the future a little bit and not put yourself in a financial strain? But either way, we really need to have a dollar amount set to make sure that we don't overspend.

Susan: You know, Carrie, I think you just swore - I think budget should be like a four-letter word sometimes. So, you know, we're getting closer and closer to Christmas. And I'm going to just say, I have not made out a holiday budget. So where would I start?

Carrie: First thing you need to do is make a list, I would say. Make a list. Check it twice. Write down absolutely all of your expenses that you typically have this time of year. Do you buy gifts, your food for meals for get-togethers, which you might not be having as much this year. Or baked goods, maybe your travel expenses, decorations - are you going to purchase more decorations. This year, more than ever, people are starting to decorate a little earlier to bring up their spirits. So maybe you are going to spend a little bit more on decorations and thinking of other things like postage and shipping. 

Susan: Oh boy.

Carrie: So when you're listing your gifts, especially list every single person that you usually buy something for along with the amount that you plan on spending for that person. Include all people. This means small gifts, like your office gift exchange, you might not think of $15 as being a big deal, or your child's teacher's gifts. But all of these small expenses really add up fast.

Susan : Yeah, you know Carrie, I’m always surprised when I think back to my Christmas and I... I look at all the big gifts, but I never think about all the stocking stuffers and little gifts that I hand out here and there, jeeze you’re right they can really add up. But you know what Carrie, I love, love, love your ideas of lists and I do make a list of ideas for people. But here's where I run into a problem. And frankly, I'm not sure that you can help me with this problem because it's a discipline problem, but I'm going to hope that you have an idea. So here's what happens. I buy gifts for somebody on my list and then as it gets closer to them closer to Christmas or the holidays, I end up buying something more, and then just because I have this fear of being unfair, I buy... I feel like I have to buy for everybody else, to up the ante. So if I give five gifts to someone, I want to give five gifts to someone else, if I spend $25 on somebody. I want to spend $25 on them. So it becomes this vicious circle. So I guess I have to just stick to my list???

Carrie: You know, it is difficult to stick to a budget and stick to a list sometimes, it takes commitment. You know, creating a budget is one thing. And I just do also want to want to stick this in there when you said you love lists, but budgeting, not so much. Think of a budget as a list, right? If you like to cross things off on a list. Think of your budget as a list and tracking is kind of like you're crossing things off. Just a little non holiday trick for you.

Susan: I love that. That's empowering for me.

Carrie: Yeah, there you go. You know, but creating that budget and tracking your spending is so important. It doesn't just have to fall under this holiday time but it's really similar to how you would do your monthly household budget. And just making that commitment. Right. You just have to say, ‘Okay, I'm done’. It is difficult. I'm not going to say it's not difficult, because I've done the same thing. I'm, I'll be completely honest with you. Or if you're in that situation where you see something, maybe you take that and replace something else that maybe you've already purchased that you could return. So you're not finding yourself in this vicious circle of spending.

Susan: You know, I did also like the idea of writing it down right away. And here's another problem - that “buy with one click” is really dangerous for me. Because oftentimes I like, click away and then a box comes and then I'm like, oh yeah, now I remember ordering that so I'm telling you, every day is Christmas at the Milenders.

Carrie: It is, online shopping can be extremely enticing to just click, click, click, and then you forget. Oh, that's right, I already ordered that person something. But again, you can always return things! If you've gotten yourself into a situation that you shouldn't have. It's okay to reevaluate what you've done. So you can stick to that budget because remember when you when you created that, that spending plan that that dollar amount. That was your maximum that you could spend if you go over. Where's that money coming from? So, be realistic this time of year. It is fun to give. We all love to be generous and give things to people, but we also have to be mindful and take care of ourselves this time of year too.

Susan: That is so true. So you know the other area that I really think about is postage, because oftentimes, like I said, I buy online and then I can have it shipped directly to the, the person that I'm giving to, but I know that I just sent a very small like jewelry box size, gift and it was like $7. And then I thought, oh my gosh, I spent my budget for that gift, it was a birthday gift. I spent my budget for that birthday gift, but I never anticipated, adding that $7 to the gift cost.

Carrie: Yep, so extra postage shipping this time of year, that needs to be budgeted in. If you're having things gift wrapped, so I know sometimes I will do that as well. I'll purchase something online and have it gift wrapped and shipped, even though the shipping is free, it might cost me $5 to have it wrapped. Which is not something I typically have budgeted for. The other thing, yeah, so making sure, like if you have Christmas cards you're mailing out. How much did those costs that postage can really add up. And then also, maybe you're doing things like a homemade gift. So you're...you're saving money there but you never budget in how much it's costing to send that homemade gift. Even though you're saving a little, you have to remember to budget what it's going to cost them to get it to that person. Because we might not be getting together this holiday season in our big groups like we typically have in the past. Looking at your budget, like I said at the beginning. What do you typically spend, but also, how's it going to be different this year? So that shipping and postage costs might be a little higher this year, than it typically has been in the past.

 

Susan: Yeah, you know I typically send out a lot of Christmas cards, but I have to remember that I probably don't have to send to people that were on my wedding list 30 years ago, right. I mean, I could probably scale back and now you can email cards, as well. And sometimes it's just, if you think about a card as a gift, maybe? You know that might help me, as well. Yeah, you've got some great tips, now so we talked about gifts and we talked about making a budget for gifts and we talked about making a budget for postage and sticking to that list, which is really hard. But I also know traveling is going to be a little different this year. Right? And with that, we might be staying home. Eating and having fun in the kitchen. So what do you have for me on tips for food and grocery shopping.



Carrie: Yeah, make sure you have your budget set for food. In my house, this is,no matter what time of year. This is my highest expense every month during every holiday season. We love eating in our house, you know, and with four teenagers, that is a quite a large expense every month. And during the holidays. So remember when you do go and buy your food, having that grocery list. And it may look different this year, if you're planning on staying home not traveling to Grandma and Grandpa's and getting ...getting fed. So, I will miss that. Or I may have done the cooking at Grandma and Grandpa's house, but I didn't have to buy the food right? It was all pre-purchased for me. I just had to send my list home. So you might have to increase that amount that you spend on food this time of year. You may be baking with the kids, a little bit more often so you might need a budget for that. But grocery stores typically are running sales this time of year on those... those ingredients. You know we just got the weekly flyers last, yesterday. Well, I don't get them - I go online and look at them every week, every Wednesday. for sales in Fargo. And, you know, this time of year, you find your traditional holiday meal ingredients, also baking supplies. And some of those things for baking, you might want to stock up on now on those ingredients that aren't going to go bad, just because you know we might start baking now and bake throughout. You know, when the kids are home from school for those few weeks, the end of December - beginning of January, just to have some activities to do together. So maybe stocking up on some of those things that are a little less expensive right now because it is the holiday season. So might be a good thing. 

Susan: So know that Carrie, I don't mean to interrupt, but that's a really good idea to stock up but I go back to that impulse shopping, because when I'm in the grocery store. I go in for one item and I leave with fifteen. And I just ordered online and I had it delivered and that really cut back on my impulse shopping, frankly.

Carrie: Yeah

Susan: Just wanted to throw that in there.

Carrie: I.. that's a great tip I've been doing that myself, because I love shopping for food. Again, we love to eat, and I'll see one thing and go, oh, I could make that. And then I have to go back throughout the whole store and buy 15 other ingredients to make that thing that look that sounded good to me so. Finding ways, if you know you're an impulse shopper, if finding ways to limit your trips to the store or limit the amount of time you spend browsing online shopping. Maybe deleting apps from your phone so it's not quite as easy to buy those, those things this time of year. You know, I have on my phone, I have a whole folder that says online shopping and there's probably 20 apps in there of different stores that I, I can just, you know, scroll while I'm watching TV and maybe just taking those apps off the phone will save you money and help curb your impulses.

Susan: That is a good idea. I might have to take a look at that. So, now I've got my budget set, Carrie. And I have overspent on my budget. Suggestions?

Carrie: It happens. This is one area that you know I talk to people and they’re like, “what do I do now?” You know, you move on. You don't want to beat yourself up. Right. Sometimes we make mistakes with money and that's okay. You don't want to dwell on that and go ...You know, and bring yourself down. Acknowledge that...okay, I made a financial mistake. I need to learn from this and move on. But don't dwell on it. You know, if you can return things, do that. If not, again, move on. Don't, don't beat yourself up for, for not meeting your exact budget amount because you don't want to kind of have that dreary, sad feeling from buying. You know, buyer's remorse, it's a real thing. Do your best. And if it doesn't work, it doesn't. You know, if you if you've made a few mistakes, it's okay. You learn from them and you move forward.

Susan: So we're going to start with the list and hopefully capture everybody that we're going to buy for right? 

Carrie: Yep.

Susan: Yeah. Make a list and then we see oh gosh, my budget is probably a little bit more than I thought. Right? So, do I have your permission to like cross people off my list?

Carrie: Absolutely. There's, there's nothing wrong with that, um, you have to again worry about yourself, as well. This time of year we want to be generous. A lot of you know maybe all year,during, you know, during the whole year. We want to be generous. And we do sometimes overdo it this time of year. And maybe if you're not crossing something off...someone off, maybe you're reducing the amount that you spend or the number of gifts that you give to somebody.

Susan: I know you know that's a good idea because I, I feel obligated sometimes to purchase a gift for everybody that I've ever met. Or every teacher you know, my for we've got. I remember when my kids were little, we would give to the Sunday school teacher, the paras, the music teacher, the gym teacher, the principal, the school secretary... every coach. And for us adults, it might be your garbage collector, your mail person, your neighbor, your handyman, and, I don't even know, your second grade teacher. And frankly, I should be giving my UPS driver, who has quickly become my best friend during the season, a gift, but you know, I'm not sure that that's such a good idea. So I know that there will be something that comes up. Should I plan, a little extra money in my budget or will that just give me the license to spend more?

Carrie: That will give you the license to spend more. Do your best to stick to your budget. But also remember holidays, it's more than just giving gifts. You know, it's more than how much we're spending on somebody. You know, this is a time to be resourceful and allow yourself not to buy a person a gift. Or if it's going to add more pressure to you, bake goods to give to everybody, you know, if you don't have the time, you don't have the resources this time this year - give yourself the okay to not to do some of these things. Breaking a holiday tradition like buying gifts can be really tough to swallow. Right? It is something we do every year. Especially if you have children there. I'll be honest, my kids expect presents every year. That's, that's really what they do. But if you need to make that tough choice for your financial future, so it's not in jeopardy. Just become a little more creative and have a conversation with your family and say this year is going to be different. Be open. Be honest. Don't scare your children into thinking that you know we're in a dire situation, but just say this year might look a little different than than years past.

Susan: You know, can I say something here? That is so true, because we had a conversation with my family and I frankly thought that I was going to be opening up this can of worms. You know, changing gift giving, traditions and all, but I was really surprised, Carrie. That everyone was open to the idea of limiting gifts and frankly, I think they were relieved. I think everyone was really scared to speak up, because they were kind of scared of upsetting the status quo. So, this year with my four adult kids, four of whom are in college and broke. We decided to draw names and that's quite a change for us because we were typically, you know, everybody bought something for everybody else and then Santa came in the morning, so. We decided this year we're going to do the four gift rule, and I'm sure you've heard about that. So the four gift rule is  buying something they want, something they need, something to wear, and something to read. And we drew names. So we're really scaling back, but frankly, I thought everyone was relieved. Which surprised me.

Carrie: Yeah, those are great ideas. You know, it leads me to my next tip for the holidays this year is yeah, that family conversation. Like you said people. basically seemed relieved. So if you're having, and maybe it's not because of financial difficulties, but if maybe everybody else is kind of on that same page going... “oh I was too afraid to bring it up”. So just having those open, honest conversations is so important when it comes to money. Making sure everybody's on the same page. Because if you're not, you're competing, right, you're competing for those same resources. So making sure everybody has, you know, you've talked about your, your financial goals for this holiday season and everybody's working toward those same goals, you're going to have a better outcome, too.

Susan: Yeah, I thought it was kind of funny. I went to... my extended family draws names and then we have a theme for the year. So we spend like 20 to $25 and one year, we had a gift card exchange. And I thought that was so silly because I'm giving you $20 and then you're giving me back $20 and I don't know. It just seemed kind of silly to me. But this year, what we're doing is we're creating gifts around the 12 Days of Christmas. So sometimes we've done, like neck up or waist down or your favorite color. But we can get super creative and spend less money that way. So…

Carrie:Yeah. 

Susan: Resourceful. Right?

Carrie: Yeah, you know, and even if money is not an issue, you can still do other things to, for to change things. So this year in our household so again, I have four teenagers But I plan on taking them shopping, they're each getting $25 to actually spend on a gift for.. to donate. So not just teaching them about getting gifts this time of year, but also that there are people out there who are less fortunate, who may have lost a job, who may have had their hours cut. And providing them with that lesson that we need to have compassion during the holiday season and that we can help others too, and not just worry about what we're getting.

Susan: And oh my gosh, I love that. I love that idea of giving them money to donate. What a great idea. So, I want to go back for a second, to online shopping, because so many people are going to be clicking this, this season. Do you have any tips for us?

Carrie: Yeah, making sure you're staying safe while online shopping is going to be a big issue this year. First and foremost, make sure you're on a reputable site. If you're buying from, making sure you're buying from a secure website someone's looking at the URL and making sure there's the HTTPS, which means it's a secure site when you're checking out instead of just HTTP. That's going to help you out a little bit. Checking your

Susan: Wait, time out. Time out on that. You said HTTPS?

Carrie: S. Yes. S as in SAM. Correct.

Susan Milender: Well, I didn't know that. So if it's HTTP, it's a, it's not a legit site.

Carrie: It is a legit site. It's not secure to enter your, like financial information. So if you ever are checking out from an online retailer, double check. Or if you're ever putting personal information in online somewhere, double check that there's the ‘s’ there because that shows you that site is secure.

Susan: Oh, that's really interesting. Thanks for that. Yeah definitely look. Sorry, I didn't mean to interrupt you.

Carrie: Know that's perfect, I wanted to make sure you had that clarification. That's great. But also checking your bank and credit card statements closely. Or these days, you don't have to wait until your statements come out, you can check pretty much every day if you want. To make sure there's been no fraudulent charges to make sure you can catch anything that happens on there as quickly as possible so you can dispute that. And then if you do pay your balances on your credit card every month, one thing I would suggest is using a credit card this time of year. Because it doesn't give sellers direct access to the money in your bank account and credit cards have the zero liability for fraudulent purchases. So, it's just a little bit safer for you and protecting your money.

Susan: Do you mean safer than a debit card? Is that what you mean?

Carrie: Yes. Because if you're providing your debit card information, that's providing information to your entire bank account right. People could take money out of your account and it's a little more difficult to get money back, than it is to just dispute charge on your credit card.

Susan: Hmm. You know, I know my son just disputed a charge. And just like that, they took care of it. The company was easy. And I, you know, the other thing I wanted to go back to was postage. So when we're shopping online, and we're thinking about sites that might offer free shipping, is that safe?

Carrie: Yeah. Free shipping is a great perk you know, and and helps us save money. Now, during the holidays and all year right. We love free shipping. But you also need to think about the other angles with the free shipping. you know, for example, maybe you won't be able to see your family in person this year, and you want to ship something directly to them. But you have to spend a minimum sometimes to get the free shipping. So, I do see a lot of times people go, “oh, I spent this much to get free shipping”.

Susan: I have done that! 

Carrie: Yeah. So is that free shipping really saving you any money? Or, you know, if you decide to shop for gifts in your hometown and, and buy from your small businesses to help your local economy and help your small businesses out in your community, they might not be able to offer free shipping and that might be okay. So really looking at the trade-off of this free shipping. You know, spending a few dollars on shipping could be an okay thing if you're getting a benefit out of it.

Susan: When we've got so many fun North Dakota local businesses, that it's really fun to shop at those little stores or even online for, to support our local businesses. I just love that idea.

Carrie: And I love….. I love sending North Dakota things home to South Dakota to see the reaction in my family.

Susan Milender: You could be evil that way, couldn’t you. I'm sure when they open the gift. They're like, Oh gosh! Do you get South Dakota gifts then back?

Carrie: I get text messages.

Susan: Well, Carrie, I just want to wrap this up by asking you if you have any more tips for me about holiday spending this year?

Carrie: You know, with the holidays fast approaching, the earlier you can start the better. You know the National Retail Federation found that 42% of holiday shoppers have started earlier this year than they normally do. So planning ahead is, is key. You know, if you can spread those expenses over multiple paychecks it’s going to make it a little bit easier on yourself, if you if you didn't put that money in savings at the beginning of the year. And then once your budget and your list are created, do your best to stick to it - it’s really tempting to buy something just because it's on sale. I get it. Retailers and marketers are really smart, so they know how to get us to spend money. But those impulse purchases can really impact your family finances over the next several months and maybe even years, depending on how much you spend

Susan: Yeah, you know, I am going to heed your warning. I'm going to really stick to my list because I know it's not only good for my budget, but frankly, it's also good for my stress levels. Right, sticking to my budget, and I, I am going to try to start shopping early because I've also heard that deliveries might get delayed. And here's, here's what I envision happening is my delivery might get delayed and then I panic and then I spend way more money because I didn't plan ahead. So, I think that I'm going to heed all your warrant, all your advice about sticking to my budget, making a list, not impulse shopping, and planning ahead. And, and then also communicating and being open to changes this holiday season. And frankly, Carrie, sometimes I just needed me to hear that I have permission to say no. You know, I have permission to say no to maybe those extra things in my budget or extra things in my, in my schedule that can really make me forget about the fundamental reason for this celebratory season. So it comes down to people matter and not things. So, Carrie, I want to really thank you for empowering me to look at the season a little differently. And I'm going to take my Grinch hat off and I'm going to cherish the opportunity to refocus this year on holiday traditions. So with that, I want to thank everyone for listening to Thriving on the Prairie and to subscribe to the podcast and access the full transcript, as well as resource links from this episode. visit www.ag or AG. ndsu.edu/thrivingontheprairie and you can find more resources for families and communities at this website www.ag.ndsu.edu/extension. This has been a production of NDSU Extension. Extending knowledge, changing lives.

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