How not to get into debt with New Year and Christmas shopping?

Given rising prices, the Christmas 2022 and New Year holidays could be a headache for families, who have reduced their purchasing power by around 150 soles, according to the Peruvian Institute of Economics for Lima.

What should they keep in mind before making their purchases the end of the year? Edmundo Lizarzaburu, a professor of management and finance at Esan University, elaborates that the key is to make a list of what you want to buy first.

“The most important thing is to prioritize, that is, to analyze what expenses we can do without, and what expenses we are not going to do without, to compare this with the income stream that we can have (…) What needs to be done is to reconsider and allocate no more than 20% or 30% of income this month,” he said.

Lizarzaburu notes that in order to be able to spend money calmly, it would be ideal to plan a budget for purchases end of the year in October and November.

Two out of 10 workers in the country receive a raise or bonus in December, according to a Datum survey, but experts warn that spending that extra cash solely on Christmas shopping isn’t ideal.

Pacífico Business School finance officer Jorge Carrillo notes that if they have extra income, they should consider accounts they will have to do next year, such as buying school supplies.

“Don’t spend all your surplus. Allocate a portion of a tip, a Christmas bonus, or the biggest sale of your business to savings, bearing in mind that “heavy” expenses are in February or March, such as school enrollment or university pensions. your children. Set the maximum amount you can spend based on your personal or family budget,” he explained.

Due to rising prices, Impronta Research shows that in recent months, 62% of Peruvians have been forced into debt in order to be able to cover their expenses, and many of these debts were generated on credit cards.

At the end of the year, households also frequently shop at various contributions face the high costs that end-of-year parties mean, but financial expert Dennis Cavero recommends avoiding the practice, which puts the family budget at risk in the coming months.

“The main thing we have to take into account is what are the rates charged to credit cards, if they are going to do that they have to be careful to set up an installment plan where they can pay without any problems. most importantly, credit cards, limit them (…) and avoid loanswe can’t go into debt for 12, 18 months for specific purchases at the end of the year, we have to mortgage the finances of the future with short-term solutions,” he suggested.

“If people have flow, income exceeds expenses, they always strive to pay them off as soon as possible, because credit cards are the loans with the highest financial cost or annual interest rate,” adds Lizarzaburu.

Experts also suggest searching for products online and shopping with patience to compare Prices and find deals that fit your budget.

It is worth noting that, according to a study by Ipsos, this year Peruvians expect to spend an average of 926 sols during the Christmas holidays.