Expert: Budgeting Key to Happy Holidays

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Knoxville (WVLT) - So, are Tennesseans spending more of their money on Christmas gifts this year compared to last?

Volunteer TV's Kim Bedford spoke with holiday shoppers and a local economist to find out.

Everyone wants to give the perfect gifts this Christmas

And UT Economist Matt Murray tells us we can expect retail sales in Tennessee to increase about five-percent more this holiday season, compared to last year and there's a reason for that.

"I've got a nephew that's 18 months, a niece that's nine months," says Denny Connatser.

So many to buy for this Christmas.

"My daughter's 22, another niece that's 21," Denny says.

So much money to spend. "Probably more than I want to, but enough to make everybody happy."

"Probably a lot more because I just finished my degree and everyone's been really supportive of me," says Janetta Jamerson.

UT economist Matt Murray says Tennessee shoppers will most-likely be able to give a little more this year.

"Decent job growth for the last year, decent income growth should help consumers," says Murray.

Meaning many may have a little extra money in their pockets.

"Consumers are also benefiting right now from decline in gasoline prices at the pump, going to be saving a little bit in home heating costs because of the mild winter," Murray says.

Some shoppers blame their big spending on the stores.

"Prices have kind of gone up on everything, so in general, every year you spend a little bit more," says Denny.

But many say their loved ones are worth every penny.

"For family, it just comes straight from the heart. It's just you love them," says Christine Cormier.

"It's just to show appreciation. Let them know I love them, and I always try to get things that are thoughtful," Janetta adds.

But what if all those thoughtful gifts are more than your wallet can handle?

"It's going to burn a hole in your pocket, so you just gotta be careful," says Jamerson.

"I try to put back money every month so that it rolls over in November and they push it over into my savings account," says Denny.

Murray says the majority of Americans got burned last December. "People actually spent more last year than they earned in income last year"

So how do you avoid going into debt this Christmas?

"The key is to try to have a budget in place and stick to that budget," says Murray.

Sticking to that budget is where Murray says most folks fall short. He recommends putting a maximum amount you need to spend next to each person on your Christmas list.

If not, he says that credit card bill in January can really hurt you once the holidays are over.