The holidays are just around the corner. It’s important to tackle gift buying and holiday spending with a strategy that doesn’t wreak havoc on your finances.
Last year marked a big jump in spending. Consumers who took on debt during the holiday season in 2018 added an average of $1,230 to their balances, up 16% from 2017, according to a survey from personal finance blog Magnify Money.
Consumers are getting the jump on gift buying this year. The National Retail Federation noted that by the start of November this year, half of holiday shoppers had already started making Christmas purchases.To help keep the season fun and joyous – and to help you avoid the post-holiday money blues – follow these tried and true shopping tips for smart spending.
The earlier your start, the better prepared you’ll be to make smart decisions instead of ones guided by last-minute panicking. You’ll have time to compare prices, search a greater selection and not be tempted to snag what’s left. You’ve also got the added benefit of spreading expenses across multiple pay periods. One tip for early shoppers: make sure you check the return policy so you’ve got enough time to return items if needed.
Make your list
Make a maximum budget for how much you are willing to spend during the holidays before you buy anything. Unfortunately, many families create their lists first and then try to figure out a budget. This strategy almost always guarantees an unhappy January when credit card bills arrive in the mail. Have gifts in mind for those on your list before you leave the house or go online.
Last year, 64% of holiday shoppers said they hadn't anticipated resorting to credit card use, according to Magnify Money. Credit card bills that are loaded with surprises in January can certainly sour holiday memories. One solution is to put the cards in a drawer and only pay with cash (or debit cards) for presents during the holidays. A number of studies have shown that it’s more difficult to spend from a checking or savings account than it is to use a credit card.
Often, people are more conservative when they spend using this tactic. Many financial experts say that you can save 10-to-20 percent by using cash or debit cards instead of credit cards.
Plan travel around peak times
This year, Christmas and New Year’s Day fall on a Wednesday - right in the middle of the week, which makes pairing travel with the weekend more difficult. But to avoid crowds and to get better ticket prices, look at flying closer to Christmas - even on Christmas Eve, then flying home on Saturday. This can make your travel more enjoyable and potentially save you money.
Before gifting yourself, observe the 30-day rule
We say this every year, and it's true. It’s tempting to purchase gifts for yourself during the holidays. Instant gratification is one of the easiest ways to wreak havoc on a budget. The 30-day rule is a good way to learn if you really need to make a purchase. Next time you feel the urge to buy a costly item, wait 30 days to make a decision. After a month passes, you’ll know whether the urge to buy was all that great in the first place. And if there’s something you’d really like but are wary about buying – within reason – drop clues to remind your family and friends of your general tastes. Give them some variety by mixing up the pre points so they can reasonably afford it.
Remember the reason
Finally, it’s important to remember what the holidays are celebrating. If you keep the season’s spiritual meaning – whether it’s Christmas, Kwanzaa or Hanukkah – in mind, you’ll probably enjoy the festivities a great deal more. And by taking a few steps early, you’ll be able to focus on what’s important – more time with family and friends.
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