5 Ways to Save Money for the Holidays
With the holidays right around the corner, retailers and e-commerce businesses are vying for your hard-earned money. However, just because it is the season of giving doesn’t mean you have to break the bank to spread good cheer, especially in the current economy that has been gripped by high inflation, rising interest rates, and a looming recession.
If there was ever a time to be creative with saving and spending, it’s now. Below is a list of five ways to save money for the holidays, so you do not sabotage your future financial success.
Set a Budget
You shouldn’t have to put your financial goals — whether it’s buying a house or investing in your child’s education – on hold to impress someone for the holidays. Set a budget and keep it. This includes spending for food and allocating extra funds, say $20, for something or someone who may have slipped your mind. As a guidepost, American households with kids plan to spend approximately $1,300 on the holidays in 2022, on average, which according to budget expert Dave Ramsey is a lot.
When preparing a budget, don’t fall into the trap of trying to match your neighbor’s spending plans. You have nobody to impress this holiday season. Nobody will care if you use hand-crafted decorations made with care instead of buying a pricey inflatable snowman just for show.
2. Think Outside the box
Gifts from the heart can be more memorable and impactful than those with a hefty price tag. That’s why we say to think outside the box. Choose a gift that is sustainable in nature and will give back to society in some way, like a candle made by a company that plants trees for every item sold. This will keep the spirit of giving alive and won’t cost you an arm and a leg.
3. Say No to Store Credit Cards
You may find that your mailbox receives more credit card offers during this time of year than ever before. They might even offer you incentives such as discounts if you sign up. Don’t be fooled.
Companies are using their marketing muscle to lure you into spending in their stores and will charge you a pretty penny in the form of interest for that luxury. It’s very easy to accept these offers and convince yourself that you’ll pay them off early. However, when the unexpected happens, credit card bills fall to the bottom of the heap, and the interest begins to pile on.
4. Avoid Electronics
While it would be nice to buy someone on your list the latest iPhone, things could get out of hand quickly. Buying an expensive item for one person could spill over to other people on your list, leaving you spending more for the holidays than you ever intended to. Please keep it simple and set your sights on meaningful gifts instead of expensive ones.
5. BNPL in Moderation
You may have heard of a credit craze hitting the economy: buy now, pay later (BNPL). Providers make it easier than ever for consumers to make big-ticket purchases and not have to worry about plunking down the entire amount at once. Instead, payments are spread over multiple weeks or months, and often no interest is attached. However, there are hidden risks.
You could easily find yourself juggling multiple BNPL agreements, increasing the amount you’ll have to pay the piper eventually. Funds are typically withdrawn automatically from your checking account; if the money’s not there, the fees kick in. Consumers who spread themselves too thin could default on BNPL agreements, ultimately damaging their credit.
We get it. Spending money around the holidays is contagious. Just be sure and create some boundaries and plan ahead so that you don’t overspend, thinking it’s the only way to enjoy the festivities. Spend wisely; it will be the best gift you can give yourself this holiday season.
Featured Image Credit: Clever Girl Finance