If you were aghast when the credit card bills arrived this past January, now is the time to start thinking about how to avoid a repeat performance of holiday debt. Although it feels early to start thinking about the holidays, starting now will give you plenty of time to budget, build a shopping fund, and even do a little early shopping so you’ll hardly have a bill to pay.
Look Back
Set a budget for your holiday shopping by evaluating what you bought and spent last year. Can you pay the same, spend more, or do you need to cut back?
If you need to cut back, think about the individuals with whom you exchange gifts. Can you spend a little less per person? Or are there people you can remove from your gift-giving list (maybe a card will suffice this year)?
Next, consider the groups you exchange gifts with, like family or co-workers. If one or both groups cause financial strain, consider suggesting an alternative scenario, such as a name-drawing activity, a White Elephant exchange, or proposing that adults only give gifts to the kids within the family. The other people in your group are probably in the same boat and will appreciate the suggestion!
Start Stashing Now
If your bank allows for auto withdrawals into a savings account (and if your budget allows), consider increasing that amount to save as much as possible.
Another way to save is with a “spare change” app, which you link with your debit and credit cards. Every time you use the card, the app will withdraw the spare change from that purchase and invest it for you. The process works like this: when you spend $9.50 on something, $0.50 is automatically withdrawn and saved.
With Acorns, the app I use, you can even ramp up the withdrawals to save more aggressively. This kind of incremental saving is a great way to save, especially when you feel like you can’t.
Get the Best Deal Online
You can find so many amazing gifts online, but it’s hard to tell whether you are getting the best price.
Try Googling the name of an item and clicking on the “Shopping” tab for info on where your item is being sold and for how much. In this tab, you can also use a variety of filters to narrow your search.
Also, install a browser extension, like PayPal Honey. As you browse, you’ll be able to see whether the price of an item is historically low or high. Honey will find and test coupons for you, too, helping you save money.
Use the Right Credit Card
When you shop, use the credit card that offers the best cashback or points on your purchase. That might be a store card, like the Amazon Prime Visa card or the Walmart Rewards Card, which both offer 5 percent cashback, a travel card that allows you to earn points towards your next vacation, or a general cashback card, like the Bread Cashback American Express, which gives you 2 percent back on everything you buy.
Get Crafty
Are you creative? Whether you are a painter, a knitter, or a needlepoint whiz, making your own gifts is a great way to save money. Plus, handmade gifts are cherished.
If you plan to make gifts, starting this early will give you time to prepare, purchase supplies, and MAKE without rushing.
For inspo, search YouTube, Pinterest, or the websites of craft retailers, like Michael’s or JOANN.
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