5 Most Effective Ways To Cut Back on Holiday Spending
This holiday season, juggling the desire to gift your loved ones while being mindful of the soaring prices due to seemingly endless inflation might seem like a tough balancing act for many Americans. Indeed, about 2 out of 3 Americans say they are changing their plans due to inflation, according to a new GOBankingRates survey.
The survey also found that 33% of Americans plan on spending less than last year, while 30% say they plan on spending more than last year.
What’s more, because of inflation, 26% of Americans say they expect to spend between $100 and $300 more on holiday shopping this year, while 17% say they expect to spend $500 or more because of it. But there are ways to stretch your dollar and cut back on your spending.
GOBankingRates spoke to several experts, and here are their tips for a cheaper — and less stressful — holiday shopping season.
The recurring advice to help you spend less this holiday season is to start holiday buying early for a slew of reasons.
“Early deals, early savings,” said Jorey Blake, financial advice expert at Albert, adding that most retailers are aware of the inflationary crunch, and most are trying to get rid of excess inventory as a result of people tightening their wallets due to higher prices.
“This trend is likely to continue as long as the state of the economy remains as it is. If you have a specific item in mind, most apps support setting alerts so you know when the item goes on sale,” Blake said.
Cecilia Seiden, vice president of TransUnion’s retail business, echoed the sentiment, saying that many retailers are discounting heavily earlier in the season to clear out excess inventory, and you may find better deals now than during peak holiday sales.
“A longer shopping window also enables consumers to spread out the cost of gifts and minimizes the need to spend on expedited shipping,” she said.
Take Our Poll: How Has Inflation Impacted Your Holiday Shopping Plans?
Stick To Your Budget
While it’s easy to get sucked into overbuying and overspending, one way to avoid this is by making a budget and sticking to it.
“Create a budget and stick to it. Be wise about how you spend your money and hold off on expensive, unnecessary purchases. If possible, hold off for upcoming holiday sales events such as Black Friday and Cyber Monday,” said Jeanniey Walden, chief innovation and marketing officer, DailyPay. “Shop like a CEO-strategic and budget-conscious. Take pride in taking advantage of the best deals out there by collecting coupons and searching for online sales.”
And if you have a certain price target for gifts, stick to it. “The last thing you want to do is enter the new year with a heavy debt burden,” Blake said.
You can do this by setting up monitors and alerts to track gift prices and flag great deals that will lead to big savings, said TransUnion’s Seiden, recommending tools such as Google Shopping, the Honey web plug-in, ShopSavvy and Camel Camel Camel, which make this easy. In addition, you can also scan the internet for the best coupon or discount codes and apply them to your order.
This is something you can also do to cut back on travel spending, especially this year with soaring gas prices and inflation which impact airfares. Indeed, the GOBankingRates survey found that about 16% plan to skip traveling for the holidays this year because of soaring prices.
“If traveling is part of your holiday plans, try setting price alerts to monitor any drops or increases on the flights you’re hoping to buy,” Albert’s Blake said. “Skyscanner and Google Flights are great tools for keeping track of airfare prices. Sometimes you can luck out and secure a last-minute deal; however, it’s not something worth risking if you know for certain you’ll be traveling this holiday season. If it’s something you’re not quite set on yet, it doesn’t hurt to see if prices come down to be within budget.”
You could choose a signature gift for most people on your list, where you give everyone a slightly different version of the same thing.
“An example might be personalized small canvas bags that you can order online. You can get it done easily, quickly and painlessly and for everyone. Less time shopping means less room for going off track. You can also see very clearly what the total cost will be,” said Bobbi Rebell, CFP, author of “Launching Financial Grownups” and personal finance expert at Tally.
Another option — if you have time and patience — is that you can try some DIY gifts.
“It’s never been easier with Pinterest and social media to find inspiration for interesting DIY gifts accessible at every skill level. Baked goods, hot cocoa mix or soup mix, and chocolate bark are all delicious and welcome gifts,” Seiden said. Another option is to “go for sentimental.”
“Photo books, memory scrap books, video tributes, and other sentimental gifts are often more meaningful than physical gifts, and easier on the wallet,” she added.
Use Apps and Look At Policies and Programs
Seiden recommends taking advantage of post-purchase price adjustment policies.
“If an item’s price drops after you buy it, many retailers will refund you the difference between your purchase price and the current lower sale price, typically within a 7-14 day window after purchase. Target, Costco, Kohl’s, Nordstrom, and Macy’s are examples of retailers with price adjustment policies,” she said.
She also points out that you should not “leave money on the table.” Consumers should make apps such as Rakuten and Slick Deals part of their regular shopping routine. Rakuten cash-back rewards can be upwards of 10% on a given purchase and can really add up, she added.
Rebell has another tip regarding cash-back sites such as Honey and Rakuten: Take a look at their sites and shop on days where they offer double or triple cash back.
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Methodology: GOBankingRates surveyed 1,025 Americans aged 18 and older from across the country between October 17 and October 21, 2022, asking eighteen different questions: (1) Do you plan on spending more or less on holiday shopping this year?; (2) With the current state of inflation how much more do you expect to spend on holiday shopping this year?; (3) What is your favorite place to shop for the holidays?; (4) Do you have to change any of the following holiday traditions this year due to rising costs?; (5) Where do you do a majority of your holiday shopping?; (6) Do you plan to work in retirement?; (7) How much time do you take off from work during the holidays?; (8) How much would you typically spend on a gift for a family member?; (9) How much would you typically spend on a gift for a friend?; (10) Where have you noticed rising prices for holiday shopping/expenses this year? (Select all that apply); (11) When did you start or plan to start your holiday shopping this year?; (12) As the holiday season approaches, which of the following applies to you?; (13) How much do you plan to spend exclusively on gifts this holiday season?; (14) How much do you plan to spend on travel during the holidays?; (15) Who do you tip for the holiday season?; (16) Do you tip extra to service workers (food delivery, Uber, hairdresser, etc.) during the holidays?; (17) What is the primary way you plan on paying for your holiday spending?; and (18) What holiday purchases do you make at the dollar store? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.