This blog post is excerpted and adapted from one of the free Delta Community Financial Education Center live workshops, Tips to Manage Holiday Spending, which is being presented this month and is available to both Credit Union members and the general public. Please visit the Financial Education Center's Events & Seminars page to register for monthly, no-cost webinars with practical advice on managing personal finances, including saving and spending suggestions. The work of the Financial Education Center reflects Delta Community’s mission to help both members and others in the community achieve financial success.
This is Part 1 of a two-part blog on this topic. The Financial Education Center workshop related to this post covers this topic in much more detail, and anyone interested in the subject of learning more about managing their finances can attend a Financial Education Center presentation.
Holiday spending may be more expensive this year
According to a report from the National Retail Federation in January 2022, “Retail sales during 2021’s November-December holiday season grew 14.1 percent over 2020 to $886.7 billion, easily beating the National Retail Federation’s forecast and setting a new record despite challenges from inflation, supply chain disruptions and the ongoing pandemic…”. Some of the challenges from 2021 are still affecting the U.S. economy, but holiday spending this year is still likely to be huge.
It's not unusual to increase spending during the holidays as shoppers try to get the perfect gifts for family, friends and colleagues. Although it can be easy to overspend on holiday shopping, with a little bit of planning, budgeting and discipline, it is possible to celebrate without using too much of your cash or maxing out your credit card limits in November and December. By planning and budgeting carefully during the last months of the year, you can prepare for and manage after-holiday bills in January.
Following are practical tips to ensure you stay on budget this year, rather than getting wrapped up in too much holiday spending. The sections below focus on gift-buying research, planning and budgeting.
Research and plan for holiday spending, including budgeting
Before you start any shopping, first research and make a plan. Prior to swiping that debit or credit card, take some time to plan out your gift buying, including upcoming sales, shipping deadlines and where and when you need to purchase gifts. Create a list of who you will shop for. Then, divide the list into immediate family and everyone else. Consider which physical and online stores you need or prefer to shop for presents.
Do your research. Many retailers don’t wait until after Thanksgiving Black Friday sales to offer big discounts. Start comparing prices now—online or in weekly advertisements—and keep track of the lowest prices you can find. That way you’ll recognize a good deal when you see it. Take advantage of free shipping offers, and track shopping trends in case a popular item on your list is at risk of being sold out.
Search coupons, promo codes, internet browser extensions and cellphone apps. Speaking of doing research, looking ahead for sales isn't the only way to get great deals on the gifts you want for your friends or family. Before you shop in local stores, comb through the coupons you received in your mailbox. While you search through the store flyers, make sure to comparison shop for the item you're interested in with online research. Before you shop online, perform a quick web search for discount promo codes or your favorite online stores. Savings can happen just by keeping your eyes peeled for deals. There are also a number of small internet browser add-on extensions to help compare prices and automatically provide discount codes for retailer websites. Some of these extensions also exist as standalone apps for cellphones that can offer cash-back deals and discounts.
Keep in mind shipping costs and time. It’s not unusual for an online item to appear cheaper than its in-store counterpart—until you add in shipping costs. Take note of any delivery or service fees, as well. Keep in mind, many retailers offer shipping coupons or free shipping days to attract customers, so do some research before you click “buy.” Also factor in estimated shipping times so gifts can arrive before they need to be given.
Take stock of your current gift supplies. Do an inventory of your wrapping paper, cards, decorations, gift bags, labels and tape to avoid buying extra materials that you don’t need this year.
Add a few extra gifts to your shopping list. These gifts should be generic in case you receive a surprise gift and need to reciprocate or forget to buy for someone. This preparation can lower stress and save you from scrambling to find something at the last minute.
Review your budget and set spending limits. Give your credit card and anxiety over money a holiday by limiting what you buy to only what can responsibly come out of your financial account. Use this opportunity to create or get your budget into shape, and use it to decide how much money you can afford to spend. Forecast upcoming expenses and determine how much you will have after paying for current necessities. Take a look back at your spending from last year, since this might give you a good idea of how much to budget for this year. Decide who is getting what and set a firm “no more than” amount to be spent for each person. Parents might want to have children make a list of their wants ranked in order of importance. Have children make their lists by early November so you can notify “Santa” of their wishes. Then, once the lists are made and mailed, let children know that no changes are allowed.
Put each household member’s holiday budget in an envelope. When the money’s gone, it’s gone. If you use credit cards for convenience, hold a weekly reckoning with yourself, your partner and your credit card receipts to make sure no one is going overboard. If you must use credit cards, pay them off as quickly as you can to avoid interest charges. If possible, it’s better to pay off credit card balances in one lump sum. Don’t handicap yourself with too much debt as you go into the new year; put yourself in the position to be financially successful.
Take advantage of annual national sales. There are a few days during the 2022 holiday shopping season that offer huge sales:
- November 25: Black Friday, the day after Thanksgiving, is the traditional kickoff to the holiday shopping season
- November 28: Cyber Monday is the Monday after Thanksgiving
- December 14: Free Shipping Day is the day hundreds of stores offer free shipping with no minimum order, plus other special deals
- December 17: Super Saturday or Panic Saturday is the last Saturday before Christmas, a major day of revenue for American retailers, marking the end of the shopping and often having one-day sales
- January 1-2, 2023: New Year’s Day often has sales and discounts as retailers try to keep busy after the holiday rush
Looking for more detailed advice on holiday money management? We have it! This post continues with “Tips to Manage Holiday Spending–Part 2”, which will be published later this month.
Other tips for handling the holidays and spending
Interested in keeping your finances in BALANCE™?
Another resource for good information is BALANCE™. BALANCE™ is a financial education and counseling organization that offers free services to Delta Community members. Some of its services include credit report reviews, debt management, and information on budgeting, money management and home buying.
Visit the BALANCE™ website to learn about their education and assistance programs. Members can also speak with certified credit and housing counselors to get personalized guidance.
Want to connect with a Financial Coach about your specific situation? Chat online, e-mail, or call 1-888-456-2227 to speak with a Financial Coach today.
Note that the services offered through BALANCE™ are separate and distinct from any business conducted with Delta Community and are not guaranteed by, nor are they obligations of, the Credit Union.
