PHOENIX (3 On Your Side) -- Before you know it, the holiday season will be here. While the National Retail Federation is "cautiously optimistic" about spending, many families impacted by coronavirus may have a much tighter budget than usual.
"Thinking ahead is really key to avoiding debt over the holidays," Andrea Woroch, a family finance expert told 3 On Your Side.
The first step is to create a holiday savings account.
"What I recommend is cutting maybe one, two, or even three regular expenses," Woroch said. "Whether you cut it out completely or maybe just reduce it so that you now free up some extra cash that can be put towards that holiday savings."
Then set a budget for each person and each gift.
"When you're not writing it down, it’s so easy to overlook the total impact of how much you’re spending," Woroch said. "Maybe instead of buying a $20 bottle of wine as a hostess gift, you bake cookies instead."
According to NRF, 43% of holiday shoppers say they plan to begin shopping in November.
"Retailers are ready with inventory and sales, and there’s no reason to wait until Thanksgiving weekend to kick off your gift shopping," said NRF President and CEO Matthew Shay.
"This allows you to manage your cash flow, so buy a gift maybe every week leading up to the holidays and then by the time Christmas rolls around, you don’t really feel that pressure of buying everything at once," Woroch added.
If your budget still doesn’t feel like it’s stretching enough, you can get some extra cash in your wallet by selling stuff you don’t need anymore, like clothes your kids have outgrown.
If you use a credit card to shop, make sure you’re cashing in on all the rewards your card may offer, but be careful to pay off the balance right away to avoid interest.
Worach also says it's important to set gift expectations with your family and friends. A quick conversation may be able to save you some financial stress.