COLORADO SPRINGS, Colo. — Inflation has hit the holiday season causing many of shoppers to look even harder for a good sale. But this holiday season, experts are urging people to think local more than ever before.

"Big retailers as well as small retailers are recognizing people are worried about inflation,” said Stephan Weiller, a professor of economics at Colorado State University. "The holiday season is pretty important in terms of the economy. As a country, we are supposed to spend over a trillion dollars on holiday sales. That's 5% of the GDP, or 5% of what we produce is actually sold during the Christmas season, which is pretty unbelievable."

With inflation increasing the price of goods by sometimes 8%, many people are turning toward shopping online and in big chain stores.

"That’s what big box stores are doing; they’re discounting deep and often and that's what people are seeing,” Weiller said.

"The big box stores and Targets and Walmarts are really captivating the toy businesses,” said Richard Skorman, the owner of Little Richard’s Toy Store in Colorado Springs. “They used to have two or three aisles of toys, but now they have 15 or 20. So, it's hard for small business owner small toy store owner to compete sometimes. We have to innovate."

Economists are now trying to inform consumers to consider small privately owned toy shops for their holiday spending.

"If you're shopping for example at big chains all of that money goes away from the community, it goes to corporate headquarters,” Weiller said. “Spending locally keeps dollars flowing in that community.”

"So, Christmas is a big part of our sales,” Skorman said. “It could be up to 60% of our sales for the whole year, so it's really important for us."

Skorman has kept his business alive by carrying things big box stores might not actually carry.

"We've been preparing for this for months and months,” Skorman said. “We weren't sure if the supply chain was going to be hurt this year because last year, toys were hanging out on boats from China, so we bought a lot local, and we have a good full stock right now."

Economists say that it's hard for small businesses to compete with big chain prices, but Skorman believes stores like his can get through inflation by investing in their customer service.

"You'll find that people who work in locally-owned stores are really knowledgeable,” Skorman said. “And in some cases, local stores can talk you into something cheaper than what you were going to get so that could be an inflation buster. If you lose your small businesses in a community, you really lose your sense of character, your sense of place and a fair amount of money that would be invested and that community goes away."

By now, you may be one of the more than 80 million Americans who has a little extra cash in your bank account. But before you spend it all in one place, or spend it at all, you need to make sure spending it is actually a wise choice.

"For the people for whom it’s an uncertain question, where the dollars are going to come for food next week, then this is a matter more of survival as opposed to spending it,” said Mac Clouse, a professor of finance at the University of Denver. “And they need to use these dollars to make up for what they normally would have had."

He says the first thing you need to do is look at your budget and the things you normally spend money on in a month.

"Put them into an order of what are the things that have to be paid, what are the things that I might be able to talk to the creditors and see if I can get some extensions, and things like rent maybe put it off for a month or two, or car loans," suggested Clouse.

If you are in a position to spend some of that money, Clouse suggests looking at your local businesses. They have less reserves and less capability to stay afloat in a situation like this. His best advice is to put it into your savings account.

"It’s not going to earn them a lot of interest but now’s not the time to be looking for investments that are earning a rate of return and taking risk," said Clouse.

There's already information out on how Americans who got their checks are spending them.

The online bank Current says people appear to be spending it on basic needs like food, groceries, and gas, and not splurging on big-ticket items.