If you’re tempted to apply for a loan to finance the winter holidays, you’re not alone. Where did it all go? The majority was spent on gifts for family members and friends, the rest was spent on food, decorations, flowers and greeting cards, among other goodies. All of that can add up to a major burden on your salary.
Consider these budget-friendly tips to take the sting out of your holiday spending:
1. Be an informed shopper.
The only way to know if you’re getting a good price on a good product is to do your research. These days, people shop in several stages. Sometimes we research online, then go to a store to make a purchase. Other times, we browse in stores, then search online for better prices. Digital coupons – both in person and online can help you squeeze a few more rands off your bill.
2. Let the sales come to you.
Sign up for emails and texts from your favorite retailers and comparison-shopping websites to be alerted to steep holiday discounts.
3. Use your plastic.
Years ago, there was a negative stigma associated with using credit to shop during the holidays. These days, credit card companies and retailers provide generous discounts or cash-back rewards for using their cards. “Some credit cards offer as much as 5% back on department store and Amazon purchases in the last three months of the year,” says Jodi Furman, author of Live fabuLESS!, which focuses on living an upscale life on a regular salary. “In addition, stores will market credit or debit cards that offer ‘deep’ discounts – like 20% instead of 15% – for new applicants and existing cardholders.” However, if you allow interest on these purchases to build up, you’ll essentially give back that discount. “To avoid interest charges, immediately pay off the total amount you just charged,” Furman says. “You can even pay the bill with your smartphone before you leave the store. This means you’ll get all the advantages of a card and no risk.”
4. Get rewarded.
If you’re making holiday purchases using a credit card, pick one that lets you earn cash rewards or points for the purchases you’re making.
5. Stock your wallet with big bills.
This sounds counterintuitive, but having large denominations in your wallet has been proven to limit spending habits. “People are more reluctant to break up large bills than small ones,” says consumer finance expert Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network.
6. Shop based on value, not a predetermined amount.
It’s good to designate spending limits for each immediate family member and others on your ‘nice’ list. But keep in mind that this is a ceiling, not a quota. You still can give that much value in a present while staying well under your limit. Create and manage your shopping list, including maximum budget amounts.
7. Buy gift cards for less than face value.
Many stores sell them for well under their redemption value, says shopping expert Andrea Woroch, who appears on network shows such as Today, Dr. Oz and Good Morning America.
8. Ship gifts for free.
Many retailers will waive their shipping fee as a standard promotion – sometimes without minimum purchase amounts.
9. Save money by giving ‘free’ gifts.
When you buy ‘stuff’ for presents, sometimes those items can simply gather dust. But when you pair a thoughtful card with a handwritten note to give a precious asset – time – you’ll really make an impact. “Offer a movie day with a child,” Gallegos says. “Or host a party, or give your spouse a day off from chores and or parenting and or cooking duties.” Another idea is to bequeath an important family heirloom. Write a heartfelt explanation to the recipient about its significance on high-quality stationery to make an impact that will last a lifetime. “You’ll preserve family history but not spend a dime,” Hunt says. This kind of gift isn’t right for everyone, though. “Unless a person has expressed a particular love or desire for said heirloom, do not assume your gesture will be appreciated.”
10. Defray your entertaining costs.
You can spend a fortune on holiday decorations if you’re not careful. But why blow hundreds on inflatable santas and enough twinkling lights to put the Griswolds to shame? Furman suggests that you turn to both nature and your loved ones for a more homespun look. “Use branches from your backyard as wreathes or garlands,” she says. “String fresh cranberries for a Hallmark-style throwback look to simpler days. If you have kids or grandkids or nieces and nephews, display their holiday art projects. Take advantage of bows and ribbons that you can use every year.” Avoid decorations that you’d be inclined to toss after the big day. If you’re hosting a large party, your holiday cheer can turn to tears if you’re holed up in the kitchen. Instead of stressing yourself out by trying to host a Martha Stewart-worthy dinner party, boost the fun factor by inviting loved ones for a potluck. “You share recipes – and cost – all at the same time,” Furman says.
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