Best Tips for a Savvy Holiday Shopping
We all become a bit prodigal when it comes to holiday shopping. And this is not surprising. With all the magical atmosphere in the air, we usually get more relaxed and let our guard down. But the marketing evil never sleeps, so holiday window displays keep trapping us along with their sales and promotions.
But if you lose control over your finances, you can easily find yourself with exorbitant credit card bills and a dent in your wallet. To prevent you from this dramatic scenario, we want to offer you some tips on how to stay vigilant during the holiday season and make your holiday shopping budget friendly.
5 Money-Saving Strategies for Your Holiday Shopping
Below are 5 ways to stay on top of your finances during the holiday hustle and bustle.
1. Create a Holiday Shopping Budget
It's just that simple: when you know for sure how much you can spend, it will be easier for you to stick to the plan. Note that your holiday budget doesn't mean to be low. Budgeting is about being mindful and reaching your financial goals.
Start with listing all your debts and mandatory payments. Then, figure out how your expenses match your income. This will help you be realistic about your money-saving opportunities. Then, estimate how much money you need for your holiday shopping. Do some math, and don't forget about gifts, holiday event costs, small things to please yourself, and other needs and wants. However, you should be down-to-earth and make sure you can afford the things you put on the list.
Suppose that you already know how much money you need. Divide the sum by the amount you can set aside each month and get the number of months you need to reach your financial goal. Does it look realistic? Do you have all this time left? If the answer is yes, congratulations! But if it takes you more time than you actually have to save the amount you need, you will have to prioritize your expenses and probably do without some plans and ideas.
However, creating a budget is only half the success. Even the most well-thought-out plan makes no sense if you don't stick to it. So remind yourself of the goal you set, and don't dip into your savings unless absolutely necessary. Include holiday shopping into your expense categories and set aside a certain amount on a monthly basis.
2. Don't Fall For Holiday Sales and Promotions
Besides being a way to save money on shopping, it's also a one-way ticket to a zero account balance or even going into debt. Remember that the merchants' and brands' goal is to make you buy their products. Items on sale always seem attractive. This way, you start to think that this is a great deal and lose control of your spending. However, it doesn't mean that you should avoid sales in every possible way. Just make sure to approach them wisely. Compare prices, buy according to your shopping list, and don't make impulse purchases just because the price is lower than it was.
3. Use The Right Card to Pay
Many Americans still use credit cards when it comes to holiday shopping. Some financial experts consider this way of financing a slippery slope. However, you can benefit from purchasing items by card instead of using your savings if you approach it wisely.
This becomes possible due to multiple promotions and bonuses available to credit card holders during a holiday time. Thus, you can buy the needed thing by card, get the due discount or extra perks, and repay the amount using your nest egg.
4. Shop at Local Merchants
When you buy something from local merchants, you support small local businesses and get some perks for it. Thus, a Mastercard local program allows cardholders to get an automatic cashback of up to 5% when purchasing something in participating local stores and restaurants.
5. Shop in the Off-Season
You don't need to wait until the holiday bustle completely covers the city to buy the items you need. Moreover, this will help you approach shopping in a more balanced way and avoid impulsive purchases.
You may think that holiday discounts make your shopping experience more profitable and affordable, but the point is that it is not. In most cases, it results in exorbitant bills and future credit card payments as you start spending more than you expected due to sales and promotional offers.
Ways to Finance Your Holiday Shopping
Below are the best options you can turn to when it comes to holiday financing.
Savings is your debt-free way to purchase everything you need. However, you should think about it in advance by creating a holiday budget and sticking to it on a monthly basis. But life is life, and sometimes we can find ourselves financially unprepared for holidays. This way, we may need some additional financial assistance.
Credit cards are one of the most popular options people use to cover holiday shopping spending. On average, Americans put up to 65% of their overall holiday spending on their credit cards. As we've already mentioned, it can be a wise solution due to some extra perks and discounts that you can get as a cardholder. However, you need to be ready to give a portion of your future earnings toward paying off your credit card bills long after the holiday ends.
Buy Now, Pay Later Loans
Most major retailers offer buy now, pay later loans, which are a type of installment loans that allow you to split the cost of your purchase into several parts. The first payment needs to be made right away, and the further ones are billed to your debit or credit card or bank account.
Some BNPL options come with no interest, while others may charge some fees. In most cases, BNPL loans are available when you shop online. If you do your shopping in a store, a retailer can offer you a one-time virtual card that works similarly.
A personal loan can be used for a variety of personal needs, including holiday shopping. This loan can be obtained through traditional lenders, such as banks and credit unions, but is also offered by online lenders. Traditional options require you to have good credit and go through a hard credit check, while their online alternatives usually come with no hard check or minimum credit score requirements. The maximum loan amount is usually $50,000.
Personal loans are repaid in equal monthly payments within up to 60 months. An interest rate may vary depending on your credit score, ranging from 5.99% to 35.99%.
Holidays do not necessarily take a toll on your budget if you prepare for them in advance and approach them wisely. Just follow our tips on budget-friendly holiday shopping and spend your magic weekends without breaking the bank. If you unexpectedly run out of money and need some additional help to sort out the problem, consider some alternative financial options to tide you over.