NBC 5 Responds: How to Budget Smart This Holiday Season

Thanks to product shortages and ongoing supply chain issues, expect to pay more for everything from decorations to gifts for the holidays.

Read on for expert advice to avoid debt and surprise fees.

Don’t wait to start shopping

April Lewis-Parks with Consolidated Credit said it helps to write out your budget for each person on your list and get started as soon as possible.

Last-minute shopping could lead to overspending – especially when high-demand gifts may be in short supply.

“As you're shopping, if things aren't available, you might be compelled to buy a higher-priced option because you didn't start soon enough,” Lewis-Parks said.

Use curbside pickup to stay on track

Lewis-Parks said consider picking up purchases curbside to help you avoid impulse buys.

“When you go in the store, you see the sales and the deals and you might be enticed to spend more money than you put in your budget,” Lewis-Parks explained.

This year’s NerdWallet holiday shopping survey reported 29% of shoppers are still paying off last year’s holiday debt.

Check your card statements from last year. Calculate what you spent on interest charges and adjust your budget to keep you out of debt this year.

Also, consider making a gift or offering quality time with loved ones rather than spending money on a present or gift card.

"It's not always about the money, it's about the thought. This year above other years, put your heart and soul into it. Forget spending the money and get creative,” said Lewis-Parks.

Questions to ask if you use a buy now, pay later option

You may have seen the buy now, pay later option at check-out.

Buy now, pay later can be a way to break up the cost of a purchase over time - often in four installments.

It’s a point-of-sale loan the consumer takes out with a third-party financial service. Unlike a layaway agreement with a retailer, the consumer takes home the purchase immediately then pays off the balance.

“I think a lot of people, the thing that surprises them the most is that I've invited another financial company into the room with me,” said Chuck Bell, a program director with the Advocacy Division of Consumer Reports.

Bell said if you are considering the buy now, pay later option, don’t just click through the disclosures. Read the fine print.

“It's really important for any point-of-sale loan that you use or apps that you use, to really understand the rules of that particular app or program,” said Bell. “They may have different interest charges, different late fees, they may send your unpaid bills to a debt collector.”

If you need to return an item, Bell said the retailer notifies the buy now, pay later service. That means you may continue to make payments on an item you no longer have.

“Sometimes consumers have filed complaints, saying it's difficult to get credit for the item that I returned to the store,” said Bell. “They've already taken my second and third payments.”

The Consumer Financial Protection Bureau also explains the buy now, pay later option doesn’t carry the same dispute protections a credit card does.

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