Taking control of holiday spending amid inflation increase

CAPE GIRARDEAU, Mo. (KFVS) – The final inflation report going into the holidays is out, and it shows some less-than-jolly news.

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Consumer prices jumped 2.7 percent for the 12 months ending in November, according to the U.S. Bureau of Labor Statistics.

While economists say that increase was expected, consumers may be concerned about its impact on their spending for the rest of December, especially when it comes to major holidays.

Certified financial planner Derieck Hodges said the cost of food has been the hardest to escape for most people.

“Everybody eats out, people buy groceries, and that has been the one that seems to be persistent, and seems to be affecting everybody, but especially people who live paycheck to paycheck.”

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With essential items costing more, choosing between wants and needs is more serious.

Hodges said people should be “ruthless” when it comes to cutting out wants, and moving groceries, utilities and rent or mortgage payments to the top of the list.

“You want to make sure that the things that matter most to you are being taken care of, before diving into maybe the more luxury things, the discretionary things, like entertainment.”

That can be quite a tall order during the season of gift giving. Presents are technically not a need, but the pressure to provide them anyway is high.

“I think that’s the ultimate struggle, especially this time of year, nobody wants to say ‘no’ to buying gifts…[but] we never want to find ourselves financially vulnerable. If we find ourselves financially vulnerable, we’re frankly making our other family members vulnerable.”

The magic of the holidays can sometimes fool consumers into thinking spending a little too much won’t create as much hardship as it will joy. However, it’s important to stay realistic.

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”Ultimately, anybody who can live within their means, live within their income on a regular, consistent basis, you’ll never really have a financial worry. It’s when we try to extend outside that spending range…we make ourselves less secure.”

When making a push for greater security, people often start with setting a budget, but there’s a preliminary step.

“Before even budgeting, I would first think about my goals, what’s really most important to me,” Hodges said. “When I ask people that question, [financial security is] the thing I hear the most.”

It’s easy to have an attitude of dread when it comes to getting serious about budgeting, but Hodges said the feeling of having control is worth it.

“Rather than thinking about budgeting as a cut process or not fun, it’s really about having choices and control. The more we’re in control, the more confident we usually are.”

Read the full November 2024 inflation report by clicking here.

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