With the United States on the brink of a second wave of coronavirus, economic uncertainty looms. In these trying times, it is more important than ever to avoid overspending this holiday season. While there’s nothing wrong with buying nice things for yourself or for the people you care about — especially considering how hard 2020 has been on families —the issue lies in spending money you don’t actually have in observance of the holidays. According to a recent poll conducted by CreditCards.com, 46 percent of millennials, 46 percent of parents, and 48 percent of those who have existing credit card debt have plans to either take on debt or go deeper into debt during the 2020 holiday season.
“You need to resist that temptation – it has been a tough year for so many, so don’t close it by digging a deeper financial hole,” advised industry analyst Ted Rossman.
Staying within budget this holiday season is not as complicated as it sounds. All it takes is a little planning.
Establish a budget
Before spending anything, create a spreadsheet that outlines your regular expenses for the months of November, December, and January. Determine how much you will need to cover those expenses and how much you will save during this period. Next, establish a plan to set aside enough money to cover all of those expenses and savings deposits. Once that is done, you’ll have a clear picture of how much money you have available to spend.
Plan to only spend cash
Once you have an idea of how much you are actually able to spend on gifts and holiday-related festivities, commit to only purchasing in cash. This will help you to avoid accruing debt or going deeper into debt by spending money that you don’t actually have. If you must use a credit card, you should have a plan established to pay off your debt, ideally within a month’s time.
Procrastination is a sure way to end up overspending during the holidays. Start your shopping as early as possible as you will be less frantic, you will have more of a selection to choose from, and you will be less likely to jump at the first things that you see.
“Plan ahead,” said Sara Skirboll, Shopping and Trends Expert at RetailMeNot . “Have a list ready of what you’re buying and for whom. Set a budget and make sure you stick to it. I recommend purchasing a discount gift card with the amount you intend to spend on holiday gifts so you’re not tempted to overspend.”
Once you’ve determined that you’ve found the perfect gift, take a few minutes to shop around and compare prices. “Scour the internet for what’s on your shopping list,” says Skirboll. “Some retailers might offer it at a better price or have better offers.”
“Spending just two minutes searching for a code or cashback offer can save you up to $20 during the holiday season,” adds Skirboll. “Consider using sites like RetailMeNot to find the best deals is always a great strategy. Additionally, you can see which brands might be offering cashback offers.”