The holiday season can be a stressful time as consumers ramp up their spending on gifts and travel and face extra bills in the new year.
Shoppers are planning to spend an average of $1,047.83 this year, which is a 4% increase from last year, based on the survey conducted by the National Retail Federation, a Washington, D.C.-based trade group, and Prosper Insights & Analytics.
Consumers 35 to 44 years old are likely to spend the most during the holiday season, at a total of $1,158.63.
Shoppers will spend the most money on gifts for their friends, family, and co-workers at an average of $658.55. They plan to also purchase greeting cards, decorations, candy, and food, totaling an average of $227.26. Consumers said they will spend another $162.02 on sales and deals during the season.
Here are eight tips on how you can save money during the holiday season so you can enjoy them and spend less time worrying about those credit card bills.
2019 Holiday Budgeting Tips
1: Secret Santa
Instead of buying all of your family and friends gifts for the holidays, start a Secret Santa. Being surprised is more fun and you will spend less money.
Ron McCoy, CEO of Freedom Capital Advisors in Clermont, Florida, is trying it out with his family for the first time this year.
“It’s ridiculous for people to go out and spend money they don’t have just because our culture is to spend, spend, spend,” he said. “My young adult children love the idea of not spending a fortune this Christmas. I still believe it’s the thought that counts, not how much you spend.”
2: Shop Online
Avoid shopping at the mall or at shopping centers because you are more prone to spontaneous purchases or deals that seem to be too good to pass up. You can also save money on parking and tolls.
When you’re shopping online, watch out for hidden costs associated with shipping, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.
“The sale price of the item may be unbeatable, but some merchants pack in high shipping costs that could erase most of the savings,” McClary said.
Shopping online means you can avoid the madness of trying to find a coveted parking spot, avoid the rush of the crowds and buying mania, said Daren Blonski, managing partner of Sonoma Wealth Advisors in Sonoma, California. “Online shopping allows you to control your spending and not get sucked into those last-minute ‘have-to-have’ purchases. Although, watch out for those nasty pop-up ads in your social networking feeds.”
3: Make a List
Shoppers who make a list of gifts to purchase are more likely to not exceed their budget.
“Plan ahead to avoid any surprise expenses that could drain your savings or lead to unmanageable debt,” McClary said. “This means making a complete list and sticking with your plan. The list should be based on what you can afford without interfering with necessary living expenses or existing debt obligations.”
4. Give Gifts of Service
If you cannot afford gifts for everyone on your list, another option is to provide gifts of services like babysitting or dog sitting.
“It can be anything that shows you care and has value while not costing you a lot of money,” said Jim Triggs, CEO of Money Management International, a Sugar Land, Texas-based non-profit debt counseling organization. “You can make baked goods or make inexpensive crafts to give away as gifts. Print out some of the pictures of you and your loved ones that you may have on your phone. This can be inexpensive and a very thoughtful gift.”
5. Regift
Holidays don’t have to set you back, put you into debt or a financial crisis, Triggs said. If you receive a gift that you do not want or need and you know a friend or family member would enjoy the gift, don’t “feel bad about regifting it if you’re on a tight budget,” he said.
“Most friends and family do not want to see their loved ones going into debt during the holiday season,” Triggs said.
6. Use Reward Points and Miles
Instead of shelling out your hard-earned money, a good way to save money is to examine your existing rewards points and miles. Bankrate.com recently asked people how many they had and while many people didn’t know, the ones who kept track had impressive stockpiles, said Ted Rossman, an analyst for Creditcards.com and Bankrate.
Even at a conservative valuation of one cent per point or mile, Bankrate found the average frequent flyer account balance is worth about $340, the average hoard of hotel points equals approximately $230 and the average credit card rewards stash is $160.
“You might already be sitting on a considerable amount of value that you could turn into free or discounted travel, cash back, gift cards or merchandise,” he said.
7. Shop Through Credit Card and Airline Portals
Consumers can also save hundreds of dollars by shopping through credit card and airline portals during the holiday season.
“This is an excellent double-dip opportunity,” Rossman said. “Whenever you buy something online, don’t go directly to that retailer’s website.”
Instead, log into a website like the Chase Ultimate Rewards portal, the American Airlines AAdvantage eShopping mall or Rakuten. These examples all allow you to earn bonus points or cashback.
“Pay with the right rewards credit card for an added boost,” he said. “For example, if you click through the American Airlines, you’ll get eight AAdvantage miles per dollar plus whatever you earn from your credit card company. A good choice would be the Chase Freedom, which offers 5% cashback at department stores this quarter.”
8. Treat Yourself
Give yourself some leeway to spend on things you don’t anticipate, Blonski said.
“Just like when you’re trying to live on a diet, it seems to help when you allow for a little ‘cheat meal,’ — it takes the drudgery out of the process,” he said. “If it’s a planned frivolous spend, you don’t have to shame yourself for it.”
Source: The Street
