While the holidays are a great time for most, they can have us getting a bit carried away with our spending. Average holiday spending per person is expected to reach $1,802 this year, and with rising prices due to inflation, you’ll have to be careful in order to make the most of this money.
Because of this, it’s important to be strategic with how you spend when the holidays come around. This way, you won’t be stuck with expensive credit card balances to pay off in the coming new year.
Utilizing the below tips will help you stay on budget and avoid unwanted financial stress this holiday season.
Make a holiday budget
To start, it’s important to set a budget for the coming holiday season, as it will keep you from spending more than you can reasonably afford. This means working out how much in total you’ll be able to spend, and can be made easier by breaking this amount down into a comprehensive shopping list.
Consider who you’re shopping for, how much you’ll spend per person, and what you’re going to buy. Don’t forget to include travel expenses, food costs or any other foreseeable expenses.
By going ahead and listing out what you’ll buy and for how much, it’ll cut back on the urge to make impulse purchases and avoid unnecessary expenses. You’ll know for certain what you need — and more importantly — that you can afford it.
Start shopping now
Shopping early for the holidays is advantageous to your wallet. By spacing out large purchases, you’ll avoid carrying high balances on your credit card because you’ll have time to pay them off, rather than buying everything at once and being stuck with debt that’s hard to pay off.
Especially considering credit card APR’s have risen, it's important that you don’t let balances quickly add up. Additionally, if you plan out your shopping now, you’ll give yourself time to put aside a little extra money each month for those more expensive purchases you plan on buying later in the year, as well as have time to shop around for the best discounts and deals.
Find the best deals
Giving yourself time to shop around for the best deals on products is important this holiday season, especially since your money won’t go as far in times of high inflation. Other than Black Friday deals, take advantage of other opportunities, such as Amazon Prime Early Access, which runs from Oct. 11-12. Similarly, Target’s Deal Days will be Oct. 6-8 and is another way for you to save big this year.
Also, utilizing shopping apps can be beneficial to your wallet. Some apps, like Ibotta, offer cash back rebates on eligible purchases, while many stores, such as Walgreens and Target, have their own apps that provide access to exclusive offers and weekly deals.
Save on travel
Since 2019, domestic airfare for both the Thanksgiving and Christmas holidays has increased in price. Despite this, there are still ways in which you can save on travel expenses. Being flexible on what days you fly will allow you to shop around for the cheapest airfare, as flights booked in the middle of the week will be cheaper than those on weekends.
Booking flights for Thanksgiving travel on Nov 21-23 will offer some of the cheapest prices this year, as will flying on Thanksgiving itself. Similarly for the Christmas holidays, booking early helps, and the cheapest days to fly will be on Dec. 12 and Dec 13. Additionally, avoiding checking baggage can save extra cash as well.
Because of the cost of airfare, you may also reconsider driving instead of flying, as a way to save money. If this is the case, just make sure you’re saving on gas as best as you can; small things like properly inflated tires and using cruise control can allow you to maximize gas usage.
Bottom Line
Overspending during the holidays is understandable. We want to see our loved ones and get them the best of the best, and this usually comes with a high price tag. However, with the help of the above tips, staying within budget is doable when the holidays come around this year.
Next: High-yield savings account — what it is and how to open one.
