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Upping your spending this year during the holidays? Read on for ways to make sure that doesn’t get you into financial trouble. 

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The holidays are right around the corner, and you may be getting more and more excited for them with each passing day. You may also be gearing up to spend a small fortune to celebrate them to the fullest.

More than one-third of U.S. consumers plan to spend more this holiday season than last year, according to a survey by Square. But if that’s your plan, make sure to run through these important questions first.

1. How will I pay for my purchases?

Maybe you’ve been saving for the holidays since the start of 2023. If that’s the case, and you have plenty of money set aside to celebrate the season in full force, then by all means, go for it.

But if your plan is to pay for your holiday purchase by charging them on credit cards and tackling your balances when you can, that’s less ideal. In that scenario, you’re setting yourself up to lose money to interest. You should also know that if your credit card debt gets too high, it could hurt your credit score.

When it comes to non-essential purchases — meaning things you don’t need in order to function — it’s generally best not to spend beyond your means. This extends to the holidays, too. So if you only have a certain amount of money in savings to pay for things like gifts and decorations, stick to that limit.

2. Will spending more on the holidays impact my other goals?

Maybe you’re hoping to buy a home in 2024. Or maybe you’re planning to upgrade to a better, more reliable car. You might be able to spend more on the holidays this year without impeding those goals. But make sure that’s the case.

It’s nice to throw a fun holiday party, and that might be a big seasonal expense you’re planning for. But what would you rather do: drive a more comfortable vehicle all year long or enjoy one single night of catered food and drinks galore?

3. Do I really need to spend more to make the holidays special?

Since the holidays only roll around once a year, it’s easy to understand why so many people feel compelled to go all out. But before you up your spending, think about whether that’s really necessary. You may come to the realization that you’re able to enjoy the season to the fullest without spending more than you’ve spent in the past.

For example, you may want to add extra lights to your home this year at a cost of $300. And you may also want to spend $100 extra to host a true Christmas feast.

But that $400 could be money that will serve you well in other ways — for example, by allowing you to upgrade a piece of furniture that’s seen better days or helping you buy a new laptop that won’t constantly crash on you. So think about whether you really need those extras before spending your money.

It’s not so surprising that a good 33% of Americans plan to spend more on the holidays this year. But before you start charging up a storm, think about whether your money should be spent elsewhere. And remember that it’s the spirit of the holidays that matters more so than anything else.

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