Four Steps Everyone Should Take Before Holiday Shopping Begins

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The National Foundation for Credit Counseling® (NFCC®) shares tips to help consumers have a safe and affordable retail experience.

nonprofit credit counseling

National Foundation for Credit Counseling

Reducing holiday spending may be helpful, but careful planning and preparation can make those dollars go even farther.

While millions of shoppers are expected to descend upon shopping centers and malls across the country hoping to cash in on post-Thanksgiving savings, some are deciding to stay home and avoid spending. Half of the respondents to the most recent National Foundation for Credit Counseling® (NFCC®) online poll revealed that they plan to reduce holiday spending because they are financially worse-off than the year before.

“Reducing spending may be helpful, but careful planning and preparation can make those dollars go even farther,” said Bruce McClary, spokesman for the NFCC. “It’s not too late to start finding ways to save this year and in the year ahead.”

The NFCC recommends that holiday shoppers use the following steps before the spending begins:

Review Savings

Experts agree that the use of a dedicated savings account can help avoid holiday debt hangovers in the year ahead. Before anything else, it’s time to see if there is enough room in savings to cover all of the expenses. Having enough cash to avoid using credit cards is good reason to celebrate. If savings are short, the next steps are very important.

Calculate Debt Ratios

If planning to use credit, it’s always best to look at the big picture before setting foot in the store or going online. A good indicator of financial health is the debt to income ratio. This is how to determine if there is room to save and spend, or if it’s time to put the budget on a leaner diet. The formula is simple. Divide all monthly recurring debt payments by gross monthly income. The sweet spot is 36 percent or lower. Lower is always better.

Check Credit Limits

It’s always a good idea to know the credit limit for all credit cards before charging new purchases. Check each credit card for the assigned limit as well as the balance owed and interest rates. If the balance is approaching half of the available limit, it’s a good time to think about paying it off instead of making it grow. A high debt ratio on a high interest card is a clear sign that it’s not a good time to be making things worse by adding more debt.

Make Shopping Lists

If it works for Santa Claus, it should also work for the rest of us. Make a list that includes all of the gift items and holiday-related supplies to be purchased. Include the cost of each item and leave room to compare discounted sale prices. Once the list is complete, check it twice. Monitor spending for each item by using the holiday-themed financial calculators located at on the NFCC website.

For a more affordable experience next year, divide all of this year’s holiday expenses by 10 and save that amount each month between January and October. A balanced budget and some extra savings will add some cheer to the season! If help is needed finding money to satisfy holiday expenses, reach out to an NFCC Certified Counselor. To be automatically connected to the closest NFCC member agency dial (800) 388-2227, or to find an agency online, visit


The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC members annually help millions of consumers through more than 600 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC member, call (800) 388-2227, (en Español (800) 682-9832) or visit

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