Holiday spending can lead to holiday debt

SALT LAKE CITY — Holiday shopping so far this year has resulted in record-setting U.S. retail sales as bargain hunters nationwide have chased after super-saver holiday deals.

And all that expense can lead to some heavy-duty post-holiday debt if not managed properly, according to financial advisers and analysts.

The four-day period between Thanksgiving and Sunday saw U.S. consumer spending of $54.2 billion — a 16 percent increase over last year. Similar results came out of Cyber Monday, with online sales climbing 18 percent over 2010 — both record-setting levels for consumer spending.

The National Retail Federation reported that shoppers spent an average of $398.62 over the Thanksgiving weekend — up from $365.34 last year. Online sales on Black Friday jumped 26 percent to $816 million and 18 percent to $479 million on Thanksgiving Day, according to Reston, Va.-based research firm ComScore.

Last year, the typical American spent an average of $690 on holiday spending. The NRF found that more than half of the average consumer’s entire holiday budget — $393.55 — was spent on gifts for family members, with video game systems, jewelry, electronics and vacations among the most popular items.

Food was the second highest holiday-related cost at $86.32, followed by gifts for friends at $71.35 and decorations at $41.51.

There are strategies that can help families and individuals from falling prey to the holiday spending trap.

Establish a guideline of what you'd like to spend in advance and stay within those parameters, advised Craig Israelsen, an associate professor at BYU who teaches personal and family finance.

"If you plan for it and it fits into your budget, then you can spend it without guilt," Israelsen said. "At some level, a budget has to be quantitative, and it has to be written down. To the extent that we plan what we’re going to spend within the confines of (the holiday) budget, we've created a (feasible financial plan)."

A local economic analyst said keeping close track of spending could prevent the potential pitfall of running up massive credit card debt that can be especially costly if not managed correctly.