Now that the holidays are once again right around the corner, it’s time to start planning (and budgeting for) your festivities. While that often involves travel, it almost always involves shopping. And for some, that means all the stress that comes with it: long lines, crowded stores, and limited inventory to choose from.
Of course, it doesn’t have to be that way. As financial experts reveal, with a little planning, you can get a head start on holiday shopping (and shipping) and dodge a lot of that excess spending — and excess stress. Here’s a look at what they had to say.
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Planning will be more crucial this year as the United States Post Office recently rolled out a new cost-saving structure that’ll up costs and slow shipping times. That means if you’re sending your gifts long-distance, give yourself at least a couple of extra days before they show up.
You can also look at other options, like FedEx or UPS, or even shipping the items directly from the vendor to the recipient. If you choose this route, it’s a good idea to spring for what the retailer charges to wrap presents. Especially if you don’t want to spoil the big surprise.
Rack Up Cash Rewards
Shopping’s usually inevitable during the holiday season, and one way to be prepared is by looking for special deals where you can get cash back for what you’re spending, which can be used toward more gifts. Or, perhaps, even yourself.
“Every time you shop, make sure you’re clicking through a cash back site like CouponCabin to earn money back for your holiday purchases (or any purchase for that matter),” said Money Saving Expert Andrea Woroch. “Even if you prefer to buy in person, ordering online and choosing in-store pick up ensures you get those items the same day while also benefiting from earning cashback only available for online shoppers. Save this cashback to apply toward other holiday gifts and seasonal purchases!”
Woroch also recommended shoppers “check the cashback reward amount for each retailer that’s selling the item you want to buy and purchase from the site that offers the most back to maximize rewards.” This may take a little more time, but it can lead to big savings.
Spread Out Purchases
Another way to avoid that December crunch time is to start your shopping as soon as possible. That way you won’t be in over your come Christmastime.
“Instead of trying to save money each week, spread out purchases and buy a gift a week,” Woroch advised. “This allows you to manage your cash flow better so you aren’t stressed trying to buy everything at once come December. Plus, I find people aren’t as diligent with putting money away into a separate account each week so this is a more doable alternative.”
Similarly, you can look for Afterpay or other types of layaway plans (ideally with little or no interest) which also helps ease that holly, jolly spending burden.
Get a New Credit Card
This may seem counter-intuitive given that most types of financial advice have you avoiding this exact thing, but as Woroch pointed out, there are benefits to be had when opening new cards for holiday shopping.
“Opening a new credit card will often allow you to make interest-free purchases — some as long as 21 months — so it buys you more time to pay off your holiday gifts without racking up interest,” Woroch said. “Plus, some cards will give you a cash bonus when you spend a certain amount of money within the first three months and that can come in really handy to pay off some of your holiday purchases.”
Think Outside the (Gift) Box
Less conventional gifts are never a bad idea, and as restrictions on things like travel and public gatherings have started to ease up, spending time with someone can be every bit as rewarding as buying a gift for them.
“Experiences are always an unexpected, thoughtful gift idea, and I think as the world starts to resemble some sort of normal, people are looking for fun activities,” explained Genevieve Bellaire, founder and CEO of Realworld. “Also consider intangible products like Spotify, Audible, Masterclass or a subscription to a TV network, most of which are paid in monthly installments.”
So, buying someone a Spotify subscription which costs $10 a month for a year becomes a $120 gift that’s also a manageable expense, or as Bellaire explained, “it’s a gift that keeps on giving and allows you to manage your budget!”
Presence Over Presents
After almost two years of dealing with the stress and uncertainties of a global pandemic, people have started to reprioritize things. Now that people are able to travel more safely, and with more and more places allowing visitors, the time spent together can be one of the most rewarding gifts of all.
“I wouldn’t be surprised if we see more dollars going towards traveling to be with loved ones and spending less on actual gifts,” Bellaire said. “Being together is a gift in and of itself! In regards to financial planning, I suggest taking a look at your budget now and pulling back on any non-essential spending that could be reserved for holiday shopping or travel.”
Stick To Your Budget
Regardless of what your plans are, odds are you’ll be spending money, and it’s important to not only set a budget but stick to it before letting things get out of control.
“When you’re in the holiday spirit, it can be easy to get carried away by store sales and the gifts you want to buy; however, it’s important to stick to your budget when purchasing holiday gifts,” said Tony Wahl, Credit Sesame’s Director of Operations. “When doing your holiday shopping, aim to stick to the 30 percent rule (keeping your total credit card balance under 30 percent of your credit limit).”
“Since credit utilization is one of the biggest factors that impact your credit score, you may see your credit score drop if you accrue a higher balance. The holidays can be a popular time for potential fraud activity as well, so keep an eye out for any inaccuracies on your credit report so you can report them immediately.”
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Last updated: Oct. 28, 2021