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. Even though 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.
Set a budget for your holiday shopping. Make a loose list of what you bought and spent last year, and then evaluate your current financial situation. Can you spend the same, spend more, or do you need to cut back?
If you need to cut back, first look at look at 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, look at groups you exchange gifts with, like family or co-workers. It could be time to suggest a different scenario, like drawing names, a White Elephant exchange, or with family, propose that adults only give gifts to the kids. 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, increase that amount so you can save as much as possible.
If not, set up an account with an automatic savings platform, like Acorns, which will take and invest the “spare change” every time you use a linked card. What I mean by this is that if you spend $10.50 on your debit card, Acorns will withdraw $.50 and add it to your Acorns account. You can even set it for 2x or 3x roundups and/or designate an additional amount to be withdrawn every month. By Black Friday, you’ll have a nice little pot to shop with.
Use a Savings Tool When You Shop
To avoid a mad dash in December – and potentially overspending because you’re in a rush – start shopping now. As you build your gift list, set deal alerts with Slickdeals.net, and you’ll be notified when your intended gifts go on sale. Also, install the Slickdeals browser extension to be alerted to available cashback and coupons as you shop.
Get the Best Deal on Online
You can find so many amazing gifts online, but it’s hard to tell whether or not you are getting the best price. Try installing the PayPal Honey browser extension. As you browse, you’ll be able to see whether the price of an item is historically low or high and the extension will find and test coupons for you, too. Googling the item and clicking on the “Shopping” tab is another option.
Doing this will provide you with info on where your item is being sold and for how much. In this tab, you can also use a variety of search filters to narrow your search.
Use the Right Credit Card
Before you check out, make sure you are using your credit card that offers the best cashback or points on your purchase. That might be a store card, like Target’s or Amazon’s cards that offer 5% 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, where you can earn 2% cashback on everything you buy.
Speaking of credit cards, remember to read those promotional emails that you receive from your credit card carrier. They regularly partner with retailers to offer exclusive discounts for their cardholders, so it’s worth a look!
Starting early can also give you time to make some of your gifts, if you’re creative in that way. DIY gifts can be a huge money saver, and the act of hand-making knitted items, ornaments, collages, etc, will be so much more pleasant if you’re not frantically throwing things together at the last minute! Search YouTube or the websites of craft retailers, like Michael’s or JOANN for inspo.