Yahoo Finance Quarter of Americans Expect To Spend Less Than $200 on Holiday Shopping — 5 Expert Tips To Actually Do It
The winter holiday season is underway, which often coincides with lots of spending. From holiday meals to decorations to vacations, many people incur significant expenses as the year comes to an end. And buying gifts for friends and family can be a big part of that.
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However, a recent GOBankingRates survey found that many Americans are taking it easy this year when it comes to holiday shopping — 26% plan to spend $200 or less. And only 18% plan to spend over $1,000 on holiday shopping, while 23% said they spent over $1,000 last year.
The downtrend is likely because 42% said their financial situation is worse this holiday season than it was this time last year, while only 18% said it’s better. The rest — 40% — reported being in similar financial situations compared to a year ago.
So, if you find yourself trying to keep spending down this holiday season, consider the following five expert tips to make your numbers realistic, rather than wishful thinking.
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Make a List
Just like Santa, you should have a list to follow for the holidays.
“Whether it’s on paper or through a budgeting app, outline your spending plan. Take the time to list out whom you plan to gift, and how much you’re willing to spend on each recipient,” said Michael Hershfield, founder and CEO of Accrue Savings, a digital wallet platform.
Be specific so you can stick to a plan. If you think to yourself you want to spend around $25 for a gift for a sibling, for example, maybe you end up buying something for $28.99. Add in tax and multiply that overspend by several gifts, and it’s easy to end up dropping, say, an extra $50 that you don’t have or don’t want to spend.
“Be intentional in your spending by setting a specific portion aside for each purchase and putting a limit to ensure you don’t go over,” said Alia Dudum, director of communications and money expert at LendingClub, a lending, banking, and investing company.
Only Buy What You Can Afford Now
This sounds simple, but if you don’t have the cash and space in your budget for holiday gifts, don’t buy them. Financing your purchase might seem appealing, but if you don’t feel the impact of the purchase, you might not even realize you’ve gone over budget.
“Some common pitfalls of holiday spending include purchasing with alternative spending methods such as Buy Now Pay Later and acquiring more debt for shoppers,” said Dudum. “Another pitfall is shoppers using savings for their gifts. Only use a portion of funds that fits your budget without derailing your personal financial goals.”
Buy Now Pay Later (BNPL) is like a modern-day version of layaway, a formerly popular system retailers used to encourage holiday shopping. But these setups can make it harder to stay under your holiday shopping limit.
“While convenient, it’s worth noting that most BNPL platforms inadvertently encourage overspending, leading to an accumulation of debt due to missed payments and exorbitant late fees,” said Hershfield.
Shop Around
Another way to stay within your holiday shopping budget is to shop around at different retailers and online stores so that you don’t end up overpaying for your gifts. It might seem easier to go to one store to knock out all your shopping, but even if you’re shopping at a discount store, certain companies have better pricing for certain categories.
“Take the time to do your research and compare prices online and in-store to ensure you’re getting the best deals on your purchases,” said Hershfield.
Shopping around can also reduce your inclination to make impulse purchases, whether that’s for yourself or gifts for friends and family. If you see an item at one store but wait to compare prices at another store, that could give you the space and time to consider if you want to make that purchase. Here too, a list comes in handy.
“Impulse buying is a common pitfall we’ve likely all been guilty of. In a time where we crave instant gratification, it’s easy to opt into unnecessary purchases. To avoid this, I recommend pulling together a wish list before embarking on your shopping trip, to help ensure you stay within your budget,” said Hershfield.
Search for Discounts
Shopping around also goes hand in hand with searching for the best deals by finding discounts, such as by using browser plug-ins like Honey to find promo codes. Cash-back incentives through platforms like Rakuten can also help alleviate the impact of holiday shopping. “Look for sales opportunities at various websites and use coupon codes to secure extra savings for your purchases,” said Dudum.
Still, be careful to avoid overspending by getting swooned by these deals. You might prefer to treat deals like cash-back promotions as a bonus, rather than thinking you can go over your $200 budget on the basis that you’ll eventually get the money back, as sometimes you can run into issues like finding out a purchase is ineligible for a certain promo.
You also might be able to get creative with how you score discounts. For example, you might be able to use credit card points to buy a gift card at a discount, and if you know you want to use that gift card to then purchase a gift, you might save some money that way.
Accrue is another example of an innovative way to save, as the digital wallet provider can enable you to earn rewards dollars as you save to purchase from a particular retailer, which can limit how much you have to contribute.
Be Proactive
Lastly, being proactive by starting your holiday shopping early in the season can help you stay on track, rather than succumbing to the pressure of last-minute shopping.
“Planning in advance allows you to take advantage of early bird sales, avoid last-minute rushes, and spread out your expenses,” said Hershfield.
Being proactive also ties into the other suggestions here, such as making a list and comparing prices. While it might sound fun to go to the mall and pick out whatever gifts you think friends and family would like, spending within your means often requires more planning.
Keep in mind that following these tips doesn’t have to put a damper on your holiday season. Instead, think of the joy that can come from staying on track financially and reducing financial stress.
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This article originally appeared on GOBankingRates.com: Quarter of Americans Expect To Spend Less Than $200 on Holiday Shopping — 5 Expert Tips To Actually Do It
