12 Holiday Shopping Mistakes That’ll Cost You

Winter shopping.
Eva-Katalin / Getty Images

The holiday season tends to be an expensive time of year. A recent GOBankingRates survey found that the majority of Americans plan to spend between $250 and $500 on gifts alone.

While inflation may be making it harder to keep your holiday spending within budget, there are some moves you can make to ensure you are saving as much as possible. On the other hand, there are mistakes you should avoid, as they’ll end up costing you big time this holiday season. Here’s a look at common holiday shopping mistakes you should avoid making.

Not Using Money-Saving Plug-Ins When Online Shopping

“My favorite tip for shopping online is using tools like Honey and Rakuten,” said Marissa Anwar, director of Darling Escapes. “Honey helps you find promo codes for everything in your cart before you check out, and I have [gotten] anywhere from 10 to 50% off my entire cart. Rakuten gives you money back when you buy through their link. They essentially split their affiliate bonus with you.”

If you don’t use these tools while shopping, you could be missing out on savings.

Starting Too Early

“The biggest mistake I see people make is purely behavioral,” said Derek Sall, founder of LifeAndMyFinances.com. “Sales are starting earlier every year, so naturally, we shop earlier — but then we don’t stop shopping. We end up buying more gifts and spending more because we’ve given ourselves way more time to shop.”

Sall added, “I wouldn’t necessarily wait until Christmas Eve to do your shopping, but if you hold off on your shopping until Thanksgiving or later, I believe you’ll buy less and spend less.”

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Starting Too Late

While you may not want to start shopping super early, waiting until the last minute can also be costly.

“The biggest mistake people make when shopping for the holidays is to not start early enough,” said Lena Gott, CPA, founder of WhatMommyDoes.com. “You’re likely to spend much more when you’re down to the wire to finish buying gifts.

“I recommend keeping a running list of people you need to buy gifts for and then purchasing items that would be perfect for them when you see them on sale. Honestly, it’s never too early to do this. I’ve been known to buy a Christmas gift in May! This ensures you never pay full price for an item, and aren’t pressured to buy something less desirable because you’re out of time.”

“Shopping early also helps avoid the risk of popular gifts selling out or not arriving in time for the holidays,” added Danny Jensen, managing editor of Cheapism.com.

Not Checking the Return Policy

“I have often shopped early to capture sale prices or just to finish holiday shopping early,” said Julie Rains, writer at Investing to Thrive. “By the time the gift recipient opens the gift, though, the return period may have passed. Returns are often necessary for clothing but can apply in other circumstances as well. So I’ve learned to either shop closer to gift-giving time or shop with retailers that have extended return timeframes.”

Paying Too Much for Toys at Walmart

If you plan on buying toys at Walmart, make sure you shop at a time when you can score the biggest discounts — otherwise, you’ll be paying too much.

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“Walmart does their deep discount on toys in mid-December, so if you’re willing to wait until mid-December to buy your toys, clearance items go anywhere from 75 to 90% off,” said Ted Jenkin, CFP, CEO of oXYGen Financial.

Spending Money You Don’t Have

“If you cannot buy a gift without debt, don’t buy it,” said Jaspreet Singh, founder of Briefs Media. “The pain of not being able to give a gift this year is minimal compared to the financial pain of paying off the gift plus interest and fees. Use this as a time to reflect and be smarter with your money so next year you can afford all the gifts you want, without worrying about the price.”

The reality is that you may not be able to afford to give as many gifts as in previous years because of inflation.

“I think the biggest struggle people will face buying gifts this holiday season is that just about everything costs more this year than last,” said Tracie Fobes, founder of PennyPinchinMom.com. “It will be tempting to overspend and buy the same number of gifts as in years past, but this can put you behind financially next year.”

Signing Up for a Store Credit Card on the Spot

“Many retail shoppers will sign up for a store credit card in order to enjoy a small savings on their purchases. But applying for a credit card is an important decision, and not one you should make in a hurry at the checkout counter,” said Jason Steele, credit card and travel rewards expert. “And unless you’re making a very large purchase, your savings are likely to be less than the new account bonus on a competitive cash-back card.”

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Len Penzo of the personal finance blog Len Penzo dot Com also advises against opening a store credit card at the checkout counter.

“During the holidays it can be tempting to go for that one-time discount you get when opening a new credit card at the cashier counter. However, that discount can backfire if you’re not careful,” he said. “For example, if you’re planning to purchase a house in the New Year, the resulting inquiry that hits your credit report can lower your credit score — and that could be costly if your credit score was barely high enough to be eligible for the best mortgage rates before getting that new card.”

Not Comparing Prices

“When shopping in-store, many people get caught up in the moment and forget that many of these products are sold all over,” said Kris Phelps, founder of WealthArtisan.com. “For example, you can scan the barcodes of products to check their prices in Amazon and Walmart’s phone apps. It’s a very low-effort way to save on gifts you’re considering — not to mention, you have the added benefit of seeing what the reviews say about the product.”

Comparing prices is even easier to do when you shop online, so there’s no excuse not to do it.

“Visit multiple websites to discover the lowest prices, [and/or] use one of the many shopping apps to discover the best prices,” said personal finance expert Barbara Friedberg.

Shopping Without a Budget

“You need to establish a budget,” said José Figueroa, Christian personal finance coach. “You already have a list of people that will receive presents from you. Determine how much you want to spend on each person and add the amounts. That’s your Christmas gifts budget, meaning you can’t go over that overall amount. You may also want to establish a budget for items such as Christmas decorations or entertainment.”

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Paula Pant, host of the “Afford Anything” podcast, also emphasizes the importance of sticking to a budget.

“This creates boundaries and parameters that will make sure that your spending falls within the limits that you pre-set,” she said. “It helps avoid impulse decision-making.”

Using the Wrong Credit Card

If you’re not using the right credit card, you’re not making the most of your holiday purchases. Personal finance blogger Donna Freedman recommends shopping with a rewards credit card.

“Pay with the card that gives you the best rewards,” she said.

On the other hand, you should be wary about shopping with cards with high interest rates, said Paul Vachon, founder of The Frugal Toad.

Buying Things Just Because They Are on Sale

“During a sale, you may buy things you really wouldn’t have normally purchased in order to ‘make’ the difference between the original and sale price. That type of accounting gives you the illusion that you can buy even more items,” said Michael Liersch, Ph.D., head of advice and planning for Wells Fargo Wealth and Investment Management. “However, buying things simply because they are on sale and then later figuring out if you need them or who to give them to can wash away all that ‘made money’ — which we all know really isn’t made… money was actually spent, albeit perhaps a bit less since it was on sale.”

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Not Taking Advantage of Price Matching

“Most stores will suspend price-matching during the Black Friday timeframe itself, but right now if you’re taking advantage of early holiday shopping, those policies should still be in place for the most part,” said Julie Ramhold, consumer analyst with DealNews.com. “Don’t ignore these policies as it could mean getting you a great deal ahead of Black Friday and potentially even having it sooner if you don’t have to wait for delivery.

“Additionally, check out any holiday price guarantees some stores have already put into place. For instance, Target has one that notes if you purchase something from them and it drops in price on or before Dec. 24, you can get a price adjustment.”

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Gabrielle Olya contributed to the reporting for this article.


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