The holiday season is a time of giving and enjoying the company of friends and loved ones.
That giving can often bring with it a steep price tag, however, and lead to even the most solid of financial roadmaps hitting a few speedbumps. Holiday spending is expected to increase 5% year-over-year with the average consumer projected to spend $1,463 on holiday shopping in 2021, according to Deloitte’s annual holiday survey.
If that price tag sounds a bit high, here are some tips to keep your holiday season merry, bright and on budget.
Know Your Limits
For many, the joy of giving gifts to loved ones exceeds even the feeling of receiving a gift themselves. In an effort to spread holiday cheer it can be easy to go a bit overboard if you’re not careful.
Before purchasing the first gift this year, start by making a list of each person you plan to give to and set a dollar limit you are comfortable spending for each. Once you’ve made your list, ensure you aren’t feeling sticker shock from the total amount and adjust accordingly.
Once you have determined your total budget, set some time aside to hunt for deals where possible.
If you have people on your list but don’t have the room in your budget to buy a gift, consider making something from the heart instead, as sometimes those gifts can mean even more. This could be a great opportunity to show off those baking or crafting skills you may have picked up during the pandemic.
Get a Head Start
Global supply chain issues have become the norm at times during the pandemic, and they appear to be coming to a head just as the holiday season approaches.
While many consumers typically wait until Black Friday or Cyber Monday to start their shopping in hopes of finding great deals, this year you will likely need to adjust your strategy.
Each holiday season there tends to be a few hot ticket items that are in short supply, and that is likely to increase this year. As a result, many retailers’ deals are not expected to be as great as in years past, so if there is a gift you know you really want for someone on your list (or even yourself), it is best to search and act now and not risk waiting for a better sale.
Make Credit Card Rewards Work for You
If you have a rewards credit card, the holidays are a great time to build or use your rewards. With large purchases on the horizon for the holidays, make sure you’re utilizing your best earning rewards account for purchases when possible to continue to accumulate points or cash back.
For consumers who have already been saving their rewards for the past few months or years, the holidays can serve as a perfect chance to cash them in and save the money you would normally have spent on gifts to put toward something else.
Using your credit cards for holiday purchases can also help keep your money safe, as The Fair Credit Billing Act (FCBA) caps your liability for unauthorized purchases on your credit card at $50. Many debit and credit cards also provide fraud protection and limited liability as well to keep your accounts safe. The most important thing is to monitor all accounts closely, especially during times where you’re making frequent purchases to catch and report fraud early.
If you find yourself in a fortunate position, I encourage you to look for opportunities to brighten the season for others in need. Many nonprofits see increased demand this time of year and an abundance of opportunities to help others are out there, whether you “sponsor a family,” volunteer at a soup kitchen, or even just send a nice holiday card to those in need to show they’re loved.
As with all things financial in life, it is important to remember to live within your means throughout the holiday season. With a proper budgeting and shopping strategy in place you can ensure your holiday cheer doesn’t stretch your wallet too thin.
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