With events like Black Friday and Cyber Monday, shoppers frequently hit the malls or hop on their computers or device to score big deals. But as the holiday season kicks into gear, many tend to overspend, too. For some Americans, spending can cause personal finance struggles that last far beyond the holiday shopping season. According to recent research from the Affirm Consumer Spend Report, about 70% of Americans say they typically go over budget during the holidays.
7 Ways You Can Avoid Holiday Overspending in 2021
The COVID-19 pandemic brought about a huge shift in the way consumers spend for the holidays. In 2020, Morning Consult reported that 71% of Americans said that their holiday traditions would change. Even so, the National Retail Federation (NRF) found that retail sales in the 2020 holiday season grew 8% over 2019.
No matter how you’re planning to spend the holidays this year, the risk of overspending is never far away. Here’s how to stay on track.
1. Set a limit on spending and stick to it
If you’re visiting your loved ones for this year's holiday season, you can set a holiday budget to help avoid overspending. To figure out your budget, think about how much money you can comfortably designate for gifts and other holiday necessities. You should only spend within your means, no matter what others are purchasing.
If COVID kept you from visiting loved ones last year, you may also want to consider how that impacted your holiday spending habits. Did you save money by not traveling? Did you spend more money by shopping online for gifts? Taking a look at your financial habits can give you an idea of how much you should reasonably set aside.
2. Use a spreadsheet for your holiday budget
Think of holiday spending as any other expense. You can factor money you need for dinner preparation or gift giving alongside your budget for groceries, bills, vacations, and anything else that you typically spend on. Anytime you purchase a holiday gift for family members and other loved ones, simply write it down in your spreadsheet so you can keep tabs on the total amount you’ve spent. These free templates can also make keeping track of your holiday budget easier than ever.
3. Research the best deals
Holiday shoppers are no longer waiting for Black Friday, and for good reason. Retailers such as Target are offering exclusive one-day deals leading up to the holiday season that you can take advantage of long before Thanksgiving. Keeping an eye on sales such as these can help you save money on gifts while avoiding the frenzy. Many retailers even offer discounts on gift cards, too. You can use such gift cards to give directly to your loved ones or make holiday purchases yourself.
4. Avoid impulse & last-minute purchases
Purchasing gifts impulsively or at the last minute can distract you from your budget and lead you to spend more money on gifts than intended. This year, it’s even more important to avoid last-minute purchases because supply chain issues and manufacturer shortages could mean a delay in the arrival of holiday packages. Sidestep such habits by planning in advance and sticking to a shopping schedule.
5. Give the gift of an experience
One of the easiest ways to save money on holiday gifts is to take the focus away from material items. Instead of stressing over finding the perfect gift for every person on your list, try shifting your focus toward providing quality experiences. This can mean surprising your family by going home for the holidays or simply making a homemade gift out of materials you have at home. Thoughtful presents can extend the excitement of gift-giving while providing quality time and fun moments for you to share with your loved ones.
6. Make your annual party a potluck
If you’ve ever hosted a holiday feast, you know how stressful and expensive it can get. Instead of worrying about making sure there’s enough food for your entire guest list, you can offload some of the responsibility to your guests by asking each invitee to bring their favorite holiday dish to share. Not only will this save you money, but it will also help you have a memorable experience.
7. Host an online get-together
Though the availability of vaccines might make U.S. consumers feel more comfortable traveling this year, that doesn't mean that it's the right option for everybody. If you or members of your extended family are not ready for in-person gatherings, hosting a virtual holiday party is a great option. Doing so can also help you save money on travel costs, hosting and gift-giving. Plus, a virtual event can help you avoid doing any lasting damage to your credit card or bank account.
Keep the 2021 Season (and Your Wallet) Merry and Bright
No matter what your budget is this holiday shopping season, remember that you don’t need to go into debt to have an enjoyable time. If you do end up over your head when it comes to holiday spending, don’t sweat it. No matter what kind of challenges life throws at you, RISE is in your corner with the money you need. Apply for a personal installment loan with RISE or gain free access to your credit score today.