When retailers predict strong holiday sales, that isn't always good news for consumers' pockets.

Two months before Christmas, the National Retail Federation is predicting a 3.7% uptick in holiday spending from 2014 based on what NRF president Matthew Shay considers “several months of solid retail sales” in 2015. That's technically starting now. Last year, Google found 26% of consumers started their holiday shopping before Halloween, while the National Retail Federation discovered that 40.4% of consumers wanted to at least start their holiday shopping prior to Halloween.

For those trying to budget their holiday shopping wisely, jumping the gun may not be such a bad idea. Laurie Samay, a certified financial planner for Palisades Hudson in Scarsdale, N.Y., notes that doing some holiday shopping before Halloween allows consumers some flexibility to shop around for better deals.

“If possible, try to get started on your holiday shopping early,” Samay says. “When shopping last minute, you’re more likely to rush through the process, and you could end up selecting more expensive gifts or pay more for certain items at one store than you could have elsewhere.”

This year, in particular, there isn't a whole lot of margin for error. A survey from Bankrate.com notes that 62% of shoppers are holding back their spending this year. Of that group, 28% cite stagnant income as the main reason, followed by 25% who claim they need to save more. Other reasons include worries about the economy (18%) and too much debt (10%).


“Stagnant income has kept a lid on spending, but also held back progress on saving – even though consumers increasingly recognize how important it is,” said Greg McBride, Bankrate.com’s chief financial analyst, in a statement issued earlier this month.

However, one of the big problems with shopping this early is that human nature doesn't give gifts for others priority unless it absolutely has to. After analyzing online shopping data from the last few year, market research firm Connexity discovered that 52% of shoppers buy gifts for themselves on Black Friday and Thanksgiving weekend. In fact, they generally don't start thinking about others until December -- with Cyber Monday serving as a launching point for their newfound selflessness.

For retail industry observers, there's concern that what's worked in the past could lead to disaster in 2015. The fact that Congress has yet to pass a budget extension and is holding a full government shutdown over the nation's heads right in the middle of the holiday season is only compounding an economic reality that differs widely for average U.S. consumers and those rooting for increased holiday retail spending.

"Similar to last year in the sense we’re coming off a rather disappointing first half, this holiday season brings to light several crosscurrents that still exist for American households,” NRF chief economist Jack Kleinhenz noted when his group released its first projections earlier this month. “While confidence data is encouraging, slower job growth in 2015, deflationary retail prices and the mix of consumer spending somewhat shifting toward big ticket items and services, as well as the wild card in our government spending debates, will all contribute to the slower growth rate of sales expected for the holiday season.”

If you're worried about the toll that a combination of a government shutdown and holiday spending pressure could take on your finances, Palisades Hudson's Samay says that the best strategy is to think like Santa Claus: make a list, and check it twice. Before you enter a single store or browse a website, you should figure out your entire budget for the holiday season. That includes often overlooked expenses like postage, cards and gift wrap.

“Once you have your overall budget, you should make a list of all of the people you’d like to buy gifts for, and allocate a portion of your budget to each recipient: then, you’re ready to shop,” Samay says. “Be sure to stick to your list, and avoid allocating excess funds from one recipient to another in the course of your holiday shopping. That is a slippery slope to overspending!”

Also, if you know that your credit card debt gets out of hand during the holiday season, Samay suggests limiting yourself to cash purchases. However, if you're a regular credit card user and pay down your debt completely throughout the year, she also suggests taking advantage of rewards you've racked up during that span. That could range from a cash-back option to rewards points to retail loyalty programs that pay customers back for each time they shop.

“The holiday season doesn’t have to be stressful,” Samay says. “As with all other aspects of your financial life, planning and discipline pays off.”

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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