First Person: Future Income Fears May Freeze Holiday Spending

Yahoo Contributor Network

When it comes to holiday spending, we have put our credit cards in the deep freezer out of reach. I'm not surprised that retailers are expecting tepid sales this year when consumers such as me are so worried about future income. In other words, it's difficult for me to splurge on Christmas gifts when I'm worried about having a job in the new year. According to a recent article by CNNMoney, retailers are expecting a brutal holiday season. Morgan Stanley estimates sales at stores open at least one year will grow only 1.6 percent, which is the worst since the Great Recession of 2008. Even if I keep my job for another year or longer, I already know my health insurance costs will increase by $300 a month. If my company continues to ask employees to take furlough or unpaid days off, my paycheck could decrease by another $100 to $200 each month. I have been coming up with some plans for a frugal holiday that is still festive.

Shopping discount retailers

I won't be stepping foot in the mall this year because I rarely find any deals there. Also, it costs a lot of money in gasoline for me to get to the mall. I do plan to shop at discount retailers and dollar stores that are located within walking distance to my house. According to CNNMoney, experts expect discount retailers to steal market share this Christmas season because some people still want name brands for less.

Grabbing my grocery cart

I have noticed a lot of stocking stuffers at the grocery store as well as the health food store market. To fill up the stockings, I plan to buy $5 or less "treats" that I wouldn't ordinarily buy. I can also find discount greeting cards at the grocery store as well as clearance items in bins.

Giving useful, practical gifts

This year, my sons each say they plan to save any Christmas money they receive so they can afford items they need for their jobs. They are also requesting specific tools, clothing and practical items they need for their respective jobs. Although it's not as glamorous to receive a wet/dry vacuum for Christmas as opposed to an X-Box game, it's a present that will help them earn money instead of waste time.

Paying with cash

My husband and I want to avoid the debt trap this holiday season so we are making only cash purchases. By using cash, we can't over-estimate how much we have to spend for the holidays. We borrowed the "envelope systems" from personal finance guru Dave Ramsey. For the holidays, we write down the name of each person on separate envelopes with a budgeted amount of cash. On the envelopes, I jot down the different items the person mentioned throughout the year.

Right after the Great Recession, I felt a lot of frugal fatigue. I went out and splurged because I had a lot of pent up shopping energy that needed to be released. This holiday season, I'm feeling an intense need to reign in the spending again. I think the fact that I recently found out how much more money I'd be spending on health care insurance next year had the biggest impact on my consumer confidence. It also hasn't helped that I'm surrounded by friends who have recently lost their jobs in recent months. I'm realizing that exchanging hugs with family and friends is important than the material things we exchange.

More from this contributor:

A Debt Free Christmas

Financial New Year's Resolutions

Fighting Fair About Money

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