How to build a holiday shopping fund and avoid debt

Holiday shopping is ramping up, but a report from Intuit QuickBooks found that 63% of shoppers are worried about higher prices impacting their holiday budgets. Thankfully, one retail expert says there are ways to build up a holiday shopping fund and avoid starting the new year in debt. For Phoenix resident Cameron McConnell, the holiday shopping rush is already over. "I'm actually done already. Yeah, I'm an early one," McConnell said. McConnell started shopping months ago, picking up gifts here and there and making trade-offs to stay within his budget. "I'm only a couple years out of college, so you know, just trying to save money where we can, but also, you know, still making the gift sentimental," McConnell said. For shoppers who haven't started buying gifts, retail expert Trae Bodge, co-founder of the Threadneedle Alley Foundation , says it's not too late to build a holiday fund. "The first step really is to look back at what you spent last year, and then try to establish an actual fund," Bodge said. She recommends setting up a separate savings account dedicated to holiday spending, preferably a high-yield savings account, so the money isn't mixed in with everyday expenses. "And then setting up auto deposits as much as you can right now," Bodge said. "Obviously, because the holidays are just a couple weeks away, you might want to supercharge that a little bit." To bolster that holiday fund even more, Bodge recommends looking around the house for items you no longer use that could be sold for extra cash. "I actually sold a handheld Game Boy on eBay the other day in half an hour, and I got a couple hundred for it," Bodge said. Clothing, electronics, household items and unused cameras are among the items that could bring in extra money through resale platforms. Bodge recommends sites such as eBay, Poshmark, ThredUp and Vinted for selling certain items, along with MPB for used cameras. Once shoppers have their holiday spending money, Bodge says the next challenge is making sure they don't overspend. She recommends creating an actual gift list, rather than keeping one in your head, with a spending limit for every person. "I use the Notes app on my phone. I have my recipients' gift ideas for each, a budget for each, and then check things off as you go," Bodge said. She also suggests using artificial intelligence to brainstorm gift ideas and avoid spending money on presents that recipients may not want. "Something else that I've been finding has been kind of fun is that people are using AI to shop," Bodge said. "Use AI just to bounce some ideas off. If you can give a very specific prompt about a person and get some really good gift ideas." When it comes to paying for those gifts, Bodge says shoppers who are already carrying credit card debt should consider using a debit card instead. For those using credit cards to earn rewards, she recommends paying off the full balance by the next statement to avoid carrying holiday debt into the new year. For Jeanette, who lives in Phoenix, staying within her budget is already a priority. She hasn't started her holiday shopping yet, but she knows how much she can afford to spend sending gifts to her nieces and nephews in Ohio. "I pretty much give them all the same amount on either gift cards, or you know, whatever," Jeanette said. "If I have five nieces and nephews that are still of sending money age, then you know I might say you know $350." Rather than setting up a separate holiday savings account, Jeanette says she keeps a mental budget for how much she needs to spend. And when it comes to avoiding holiday debt, she has one non-negotiable rule. "If I don't get the cash to pay for it, I ain't paying for it," Jeanette said. This story was originally published by Jane Caffrey at the Scripps News Group station in Phoenix.