If you’re getting ready for a marathon shopping trip this Friday, take a few notes from our friends at Nerd Wallet with this guest blog.
Even when planning an inexpensive celebration, it’s easy to fall under the spell of holiday music and sparkling store decorations while your purchases spiral out of control. Before hitting the stores this year, here’s what you need to know to manage seasonal spending and still enjoy a holiday with all the trimmings.
Stick to a budget
One of the best safeguards against overspending is a reasonable budget or spending plan. Putting some money aside regularly for six months to a year ahead of time helps build a comfortable shopping fund to work with. For additional savings motivation, consider opening a holiday club savings account.
Just creating a budget isn’t enough, though. You’ll have to figure out how to stick to it, which may not be so easy. One effective strategy can be to use a debit card that won’t let you spend more than what’s available. With most of these cards you can’t overdraft, or spend more money than you have on the card, meaning there’s a measure of spending control. An effective strategy is to designate one debit card for holiday shopping and preload it with your entire budgeted amount. Of course, we’re all only human, so you might also want to create a splurge fund on a separate debit card to prepare for inevitable unexpected holiday expenses.
Beware of easy shopping
A little restraint can go a long way. If you spot something enticing, step away from it for a half hour or so before deciding whether to buy. Slowing yourself down while shopping gives you extra time to think, weigh alternatives and consider what you may have to forego if you spend the money. Making the process less convenient in general can also help prevent impulse purchases you may come to regret. For instance, don’t store address and payment information with store websites; if you have to type everything in for each purchase, instead of being one click away, you might reconsider. At bricks-and-mortar stores, shopping at peak times can mean you’ll have extra time in line when you can double check the rationale for buying each item. Finally, remove yourself from merchant email lists so you won’t be bombarded with tempting offers.
Rethink your gift list
Everyone loves to get presents, but does your entire circle of family and friends truly need one each year? To limit costs, perhaps your gift-giving circle could agree to buy presents just for the kids. If the adults you’ll be celebrating with would be put out if you don’t get them something, consider suggesting some less-expensive, creative alternatives you can all agree to.
- Re-gifting: Often gently used items can be of greater use to someone else.
- Dollar store gifts: You might be surprised at the unusual items available.
- Homemade presents: Crochet or knit, bake cookies, create sculptures or paintings, or make a recording of you and your kids singing holiday songs.
Stretch your dollars
Before committing to purchases, be sure you’re getting the best possible price. Locate top buys with free websites such as NerdWallet’s Dealfinder and apps including RetailMeNot, RedLaser and ShopKick. For price comparisons on the go, scan barcodes into Google Shopper. You may also want to use the Amazon’s price check app to compare the online retail giant’s prices to those in stores.
Use smart financing
Sometimes, even with the best planning and discipline, holiday shopping expenses exceed what you may have available. A personal loan can be a good way to handle these expenses, and may be cheaper than using a credit card and kinder to your credit score. They also have structured repayment terms to pay off the debt in a set period of time. With all the cash you need and the tools to spend it wisely, you may even have some funds left over for a New Year’s Eve celebration.
Roberta Pescow, NerdWallet