Tips to save money during holiday season

Tips to save money during holiday season

MYRTLE BEACH, SC (WMBF) - South Carolina ranks as the eleventh biggest spender in the nation, according to a recent study.

The countdown is on for the biggest shopping season of the year. But before you get carried away with those deep discounts, you need to stop and think. Americans are in more debt right now than three years ago, according to consulting firm A.T. Kearny. That's saying a lot since the economy is improving. So before you start marking off those wish lists, you need to make a plan.

Americans' addiction to debt and spending is continuing to be a problem. Consumers in every state are blowing their hard-earned money, especially in South Carolina. The Palmetto state ranks eleventh in the nation for big spending, adjusted by our income and cost of living, according to Wallet Hub. South Carolinians spend the most on homes, utilities, health care, car and credit debt, and personal expenditures, according to the 2014 Biggest Spender analysis.

Experts say we are seeing a cyclical effect right now. Consumers are spending more money as they earn more money, but we're also spending at a much faster pace. That is exactly how we bit off more than we could chew in 2007, when the markets crashed.

"A lot of people are struggling," says Patrick Munro, the owner of Northstar Financial Advisors. "Especially young people have a lot of student loan debt. Homeownership is at an all-time low because people can't afford a mortgage on top of their student loan debt as well. So there's less money for Christmas gifts."

So with the risk of overextending ourselves again, it is very crucial that you keep your financial budget in check now. That way you don't dig a deeper hole this holiday season and start the New Year off on the wrong foot.

Big companies are banking on you losing your cool at the mall this holiday. They spend millions in marketing to convince you to spend your money, even if it's money you don't have. So before you hit the stores, you need to take time to crunch the numbers.

"Budget" is the key word. If you get your finances in order, you can build a holiday budget and stick with it. Keep in mind, budgets will differ depending on what part of the country you're in when you factor in cost of living. But in South Carolina, here is a recommended budget:

Mortgage/Rent 35%

Personal and groceries and daily spending 20%

Transportation 15%

Savings 10%

Healthcare 10%

Insurance 5%

Debts 5%

So if you're in the hole right now and not sure why, experts recommend factoring these percentages against your current income. Then compare that to what you normally spend month to month. Wherever the excess is, that's where you need to find a way to trim.

When you're first starting, budget for just the minimum payments on your debts. Once you get your feet on the ground, you can build in extra payments.

"These are tough times for a lot of people," says Munro. "And the retailers know it. But people have the tendency to going into debt at times like this because they're in a very emotional season. You can avoid all of that."

Figuring out these expenses is time consuming. But once you do, it will make budgeting for all the holiday gifts, parties and travel a lot easier. Then you won't be shocked once those bills roll around in January.

If you've heard the phrase "Cash is king," it's true, according to financial experts. If you can start putting away money starting in January, then you can pay cash once next holiday season rolls around. Here's an added bonus to using cash: your personal information can't be hacked. While credit cards are convenient, they present a whole range of security issues. Home Depot and Target have been the most recent victims of mass hackings.

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