The holidays are fast approaching, and for many it’s time to shop for gifts. According to the National Retail Federation (NRF), consumers will spend an average of $832.84 on gifts and holiday items such as decorations and food, which is in line with the average for the last 10-years.
The report goes on to say that NRF expects that online and other non-store sales, which are included in the total, to increase between 10% and 12% to between $262.8 billion and $267.6 billion. This figure is up from $238.9 billion last year, which saw extraordinary growth in digital channels as consumers turned to online shopping to meet their holiday needs during the pandemic. While eCommerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience.
With the excitement of the holidays, it’s easy to lose track of how much money you’re spending. Many may also feel pressured to overspend due to factors such as social media, which may make some feel like they have to meet certain gift-giving expectations. But believe it or not, you don’t have to break the bank buying gifts to get those special holiday moments! Here are eight tips from South Bay Credit Union (SBCU) to help keep your finances in good health this season. .
- Have a game plan for your holiday shopping
Successful planning for holiday shopping starts well before the Christmas season begins. “Have a separate savings account for the money you’re using to buy holiday gifts,” SBCU President & CEO Paris Chevalier says. “Start putting money into it before December! The earlier you start, the better.”
- Make a budget for your holiday spending.
You can put back money throughout the year for holiday gifts, but without a budget, there’s still a chance that you’ll overspend. Once you know how much you have for buying gifts, it’s time to make your Christmas budget. “When establishing a holiday budget, check old credit card and bank statements to see what was spent last year,” Chevalier says. “Include everything from gifts to holiday parties, special meals hosted or attended and travel expenses too.” Having a look at past spending habits will give you an idea of how much to budget for this year.
- Holiday shop your home
Before you start making purchases, take a look at what you have at home. Our homes can often be treasure troves of items, many of which we’ve forgotten were there. Look for items that you may be able to re-gift in a meaningful way. Maybe you bought a sweater at a discount that still has the tags and would be perfect for someone on your gift list. Or maybe you have a one-of-a-kind item from your travels that would make a good gift. Also see if you have any other essential holiday items like wrapping paper, decorations and holiday cards around the house. Using what you already have will help you avoid unnecessary spending on duplicate items.
- Do your holiday shopping early
Holiday shopping a month or two before the start of December is a great way to avoid stress, crowds and overspending. If you do your shopping in this window, you’ll still be able to take advantage of holiday sales like Black Friday and Cyber Monday. You’ll also give yourself enough time to shop without feeling the pressure of the last-minute shop. And while other people are scrambling to get their shopping done by December 24, you’ll be able to attend to other holiday details.
- Be smart about your shopping.
If you’re truly looking to keep your budget intact, comparison shopping will be your best friend this holiday season. “Compare prices every time you shop with how much the gift costs on Amazon,” Chevalier says. “Another thing to do as you shop is to make sure you ask for discounts that may apply to you. Sometimes stores will run promotions for new shoppers. They may also offer discounts for teachers, students, veterans or senior citizens. It won’t cost you a penny to ask.
It goes without saying that being a smart shopper also means taking advantage of holiday deals. Black Friday, Cyber Monday, and Christmas Eve sales can give you the chance to buy big ticket items at discounted rates. If you are doing part of your shopping online, try to combine purchases and buy on free shipping day. Free shipping day is an annual event that occurs on December 14, where you can shop with participating large and small retailers that offer free shipping and guaranteed delivery by Christmas. You can check online for participating stores.
Just make sure you go into these sale days armed with a list. Only buy something if you have a specific person in mind. Avoid impulse buys and don’t be seduced by holiday sales pitches. Remember to stick to the list.
- Track your holiday spending
Let your budget be the blueprint for all of the purchases you make. As you do your holiday shopping, make sure you track your spending. You can use a spending tracking app to help with that. As you shop, prioritize the list and avoid making spur-of-the-moment purchases. If you feel pressure to buy for more people than there is on the list, consider other gifts, such as handmade, and letting others know that you are on a budget this year is okay.
Another way to resist the temptation to go over your holiday budget is to limit your card access. Only take one or two cards and be strategic about which ones you choose. And if all else fails, you can go back to basics and just pay with cash. Cash makes it easier to stick to your budget because you only take out the amount you have allocated for your holiday shopping and go from there.
- Look at other holiday gift options.
Another way to keep your holiday gift budget in check is to look at different ways to gift. For starters, you could set a spending limit for everyone giving gifts this Christmas. If everyone is spending the same amount, you avoid the possibility of anyone feeling like their gift is worth too little or too much. You can also limit who is involved in the gift-giving. Limit gift exchanges to immediate family members. Even then, make sure that all potential targets for gifts in your family actually want to continue to exchange items. Some might want to forgo the process. The thoughtful sharing of your personal time could well be more valuable than items to some.
If you aren’t keen on eliminating gift-giving but want to cut back, even more, buy group gifts. This means that instead of buying a gift for each person in your family, you buy one gift that the whole family can enjoy. This could be a game, tickets to an amusement park, or a new television. Think of something in your home that everyone has wanted to get or to upgrade, and look for a good deal on that thing.
- Spread holiday cheer with homemade gifts and experiences
Buying the things on your loved ones’ wish lists may make an impression in the short term, but often those gifts are forgotten in the long term. Homemade gifts, potentially less expensive than those bought in-store, can generate every bit as much gratitude, or even more so. People appreciate the time, thought, and effort that goes into making them. Start a holiday tradition that you and your loved ones can enjoy every year. These experiences usually don’t cost anything but time. However, what they give in memorable moments is priceless. Downsize holiday spending, not your holiday joy. Limit the size of your Christmas in terms of gifts, and make it big on meaning — from family, friends, and traditions to creating memories.
With these tips, you should be able to easily navigate holiday shopping. The most important thing to remember is not to break your budget — especially if you’d like to start the new year in a healthy financial state. To read more about financial wellness and get more helpful tips, visit our blog today!