Tips for saving money as the holiday season nears

With sky-high inflation still weighing on Americans’ pocketbooks as the holiday season approaches, a personal finance expert advises consumers to create a budget to avoid going into the hole. A good rule of thumb is to allocate 50% of your paycheck toward everyday needs and 30% toward discretionary items, while socking away 20% of your earnings, according to Kimberly Palmer of NerdWallet. Even with retailers kicking off holiday sales earlier in the season, Palmer warned against taking on excessive credit card debt. “It’s so tempting right now to overspend,” she said. But Palmer does encourage shoppers to spread their consumption out over the next few months rather than pack most or all of their holiday spending in December. “It can actually help you as a consumer to spread out your spending. It makes it easier on your monthly budget,” she said. “The huge risk is that you end up overspending. So be organized, stick with your list — once you buy a gift for someone, you’re done. You don’t need to buy another one.” Another piece of advice that applies regardless of the season, but that’s particularly important to keep in mind when prices are surging and the Fed is hiking interest rates, is to pay off your credit card balance each month. That way, you avoid having to pay any interest on unpaid balances. “People think by keeping a balance on their credit card it boosts their credit score — it does the opposite,” Palmer said. “So you want to try to pay off you balance in full each month.”