Good intentions generally only matter when you actually follow through with action.
For example, joining a gym or signing up for a library card only count for anything if you actually work out or start reading more books. But that's not entirely true when it comes to finances. In many cases, even if you fail to follow a budget you set, having had one in the first place at least gives you a way to judge how much you need to save to recover.
When it comes to holiday shopping, the good news is 65% of Americans set a holiday budget, according to Coinstar's 2017 Holiday Survey. On the negative side, 77% of the 2,000 people surveyed expect to exceed their budget and only 37% will put a post-holiday budget plan in place to recover.
About one-third of U.S. shoppers (33%) have made holiday shopping a year-round event, buying whenever they find the right gift, according to the survey. Many of those early birds (27%) make their purchases when the item they are looking for goes on sale and 7% said they complete all of their shopping before Thanksgiving. Only about 12% of shoppers said they plan to shop on Black Friday or Cyber Monday, while 14% define themselves as "last-minute shoppers."
How badly will people blow their budget?
Of the 77% of those surveyed who expect to go over budget, most only expect to do so by modest amounts. In fact, combining those who expect to go over by no more than $50 (31%) and those who plan on being $51-$100 over (21%) accounts for more than half of consumers. Another 15% plan to be $101-$250 over their budget while 10% will spend more than $250 more than they planned.
And while only 37% of those who go over budget will set a recovery plan, that number isn't actually so bad, because if you don't go too far over budget, you won't need to take drastic steps to recover.
According to this survey, most of those who spend beyond their plans will use responsible means to recover, including:
- 29% plan to cut back on treats including expensive dinners.
- 27% say they will spend less on everyday items like groceries.
- 27% say they will put less money into savings so they can pay off their debt.
In two cases, however, consumers will be less responsible, with 10% delaying paying their utility bills. The same amount will put off paying their credit card balances.
The long-lasting pain of short-term overspending
If your overspending means you have to skip a few nice dinners out post-holidays or make a few more cheap meals at home, then exceeding your budget hasn't caused a major problem. If your overspending forces you to not pay utility bills or only make minimum payments on your credit card, you have a bigger problem.
Not paying your utility bills can damage your credit rating, as can maintaining a higher credit card balance, not to mention the interest credit card companies charge. A lower credit rating can impact how much you pay for something really big, like a home or car.
The best advice: Set a budget that you can actually afford and stick to it. That can be especially hard for parents looking to create holiday memories for their children, but if a few less gifts means your family has greater financial security in the long term, that's really a better gift.
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