The anti-spending motion is gaining momentum forward of Black Friday
It's the time of year to prop up your savings.
In the days leading up to Black Friday, financial experts warn of overspending, especially amid an economic crisis caused by the coronavirus pandemic – and consumers are listening.
A campaign titled "In the Black Friday," spearheaded by the National Financial Educators Council, is encouraging consumers to avoid debt this holiday season and save for longer-term financial goals.
Buyers previously said they plan to spend less overall this year – averaging $ 997.79 overall, down $ 50 from 2019.
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Before the pandemic, vacation spending had increased almost every year, leading to credit card balances that took longer and longer to pay out.
According to MagnifyMoney's annual post-vacation debt survey, Americans took out vacation debt of around $ 1,325 in 2019, up 8% year over year.
Although credit card rates have fallen since the Federal Reserve cut its policy rate to near zero in March, credit cards are still one of the most expensive ways to borrow money.
Ticket prices are close to 16%, compared to a record high of 17.85% in July.
If you only made the minimum payments for a balance of $ 1,325, it would take more than five years to repay, while there would be more than $ 600 in interest expense (assuming an interest rate of about 15%).
Wrapping your credit cards in financial goals is one way to keep your spending in check, advised Pamela Yellen, author of The Bank On Yourself Revolution.
"Every time I take out a card, I see a picture or some words that represent an important goal for me," said Yellen. "I have the opportunity to stop and decide if what I want to buy is more important than that.
"If it undermines my goal or not, I could buy it," she added. "If not, I have the satisfaction of knowing that I have moved one step closer to my goal by choosing not to buy the item."
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