Bruno Figueiredo is a senior vice president of consumer banking for Bank of America Corp. He also is the chairman of Rhode Island Financial Literacy, a group focused on improving the financial lives of working families and low- to moderate-income individuals.
Figueiredo has a bachelor’s degree in business from the University of Rhode Island and a master’s in business administration from Salve Regina University. He spoke with PBN about tips for financial planning during the holidays.
PBN: What are you seeing this year in terms of consumer spending around the holidays? How, if at all, is that different than in years past?
FIGUEIREDO: Consumers have proven resilient in 2022. While they are likely to have a tougher time next year, especially if the labor market deteriorates, they are starting 2023 in decent financial shape. Deposit balances are coming down, but slowly, and credit card usage does not currently look out of line with pre-pandemic levels.
After a slow start compared to 2021, holiday shopping picked up toward the end of November. Nonetheless, overall retail spending across November looks soft – down 0.3% month over month, up 0.2% year over year – and total spending continues to be supported by spending on services rather than goods.
PBN: How much of a risk are scams/identity theft with holiday shopping this year? Is that more than in the past? How can shoppers protect themselves against these risks?
FIGUEIREDO: With more Americans at home and online than ever before, people are increasingly using technology to work, shop and connect socially. However, this new digital reality also provides fraudsters with fresh opportunities to target you. Scams are on the rise, as sophisticated criminals try to capitalize on our changed circumstances. Fortunately, you can protect your financial and personal information by learning about the scams and the best ways to avoid them.
Cybercriminals set up a fake store online (or on social media) that offers products at cheaper-than-usual prices or for items you might urgently need. At checkout, you may not have the option to use a trusted third-party payment platform, meaning criminals could directly access your information. They may also ask for payment by wire or gift card so that it can’t be traced.
If the price of an item seems too good to be true, it probably is. If you’ve never heard of the website or merchant, research the web and ask your friends or family. Examine if the website is secure and lists a phone number or physical mailing address you can easily verify. Also, you can search for the company on the Better Business Bureau.
PBN: For those who have already done their holiday shopping and potentially spent more than they wanted to, how should they begin to recover/restore their savings?
FIGUEIREDO: Spending more than you wanted is common and building your savings can seem like a pipe dream. But small changes now can yield big benefits later. Here are three basic steps to start making meaningful progress toward a brighter financial future.
- Think 1% at a time: Resolve to put just 1% of your income into savings over the next month. By doing so, you’ll flip an important mental switch: Before, you were someone who wasn’t saving for the long term, but now you are. That’s a key difference because it’s much easier to ramp up your savings if you’ve already formed the habit. So however modest, take the first step.
- Get analytical about your budget: You may think you have no breathing room but take a hard look at the money you shelled out over the past month. Divide every cost into two categories: “need” and “want.” Then go through your “wants.” Are you getting manicures when you could touch up at home? Friday night takeout pizza when frozen would do? Reduce those extra expenses to create space in your budget for regular saving.
- Prioritize your future self and make savings automatic: Each month, you pay regular bills: your cellphone, your student loan, your rent. Add someone else to that list: your future self. When you treat savings as mandatory, you make it that much easier to stay serious about staying on track. Once you’ve figured out how much you want to save each month, and you’re confident you’ll pull in enough income to meet that goal, you can set up automatic transfers between your checking and savings accounts. By automating deposits, you can eliminate the temptation to redirect your extra money to other things.
PBN: How can you keep your holiday spending on budget?
FIGUEIREDO: There is such a thing as being too generous, especially during the holidays. To help get you through the season with your wallet intact, write down everyone you plan to give gifts to – from your nearest and dearest to your in-laws and the mail carrier. Then put a dollar figure next to each name. Setting price limits helps you keep your holiday budget on track. Also, use your phone to see if you can find a better price elsewhere. Many stores have price-match policies if you find a better deal. Finally, one of the surest ways to overspend is to wait until the last minute and buy all your gifts in a rush. Not only are you more likely to overspend, but it also makes an already stressful time of the year even more so.
PBN: What are the biggest gaps in financial literacy you see for adult consumers?
FIGUEIREDO: From saving for a down payment on a major purchase to funding a college education, we all are making dozens of financial decisions each day. Yet, many feel stressed about money, are dissatisfied with their financial situation or are unprepared for their future.
Financial literacy is a need that we should all be committed to supporting by providing resources that are available to all. There are lots of free resources for improving financial literacy, including Bank of America’s Better Money Habits website.
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
