PHILADELPHIA (WPVI) — Thanksgiving dinner will cost 20% more this year due to inflation, and consumers are expected to spend less this holiday season. The good news is there are some things you can do now before the end of the year to secure your finances and maximize your income.
Prices for the Thanksgiving meal have skyrocketed. According to the Action News Data Journalism Team, turkeys are 17% more, canned fruits and vegetables are 19% more and you will pay 27% more for butter.
That kind of news has consumers really concerned about not just the holidays but their financial futures, so Action News talked to a personal finance expert about what you can do.
As communities try to spread holiday cheer, inflation is playing the Scrooge role.
Forty-one percent of holiday shoppers plan to spend less this year compared to last year. Fifty-eight percent are concerned about their finances heading into the holiday season.
“Be aware, be intentional and be thoughtful about how you’re going to handle it. Be careful about your spending but also be realistic,” said Bobbi Rebell, a personal finance expert from Tally.
She says to make a list and a budget and stick with it. Then pay down your debt using what’s known as the “Avalanche Method”.
“That’s where you’re going to pay down the most expensive debt first. So if you have a credit card with super high interest, that’s going to be first on your list and then you make your way down,” said Rebell.
Also, take advantage of technology.
“Apps like Tally can automate that and figure out the most efficient way to pay debt, to pay down your debt and that’s going to help you get there much faster as well,” she says.
Moving into 2023 — Rebell says to set financial goals. Check your pre-tax contributions to your retirement accounts. Make sure you’re contributing the maximum amount and getting the maximum match from your company.
“You can make changes at any time unlike healthcare decisions. So this is something where you have a lot of power,” said Rebell.
Speaking of healthcare, max out your HSA, your health spending account, if you have one.
And if you have money in an FSA, a flexible spending account, use it by the end of the year or lose it.
Also, be aware you can contribute more to your 401K for 2023. The new contribution limit is $22,500.
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