The holiday season is officially upon us. From window displays to party space rentals, retailers across the country are gearing up for another robust holiday season, with total consumer spending anticipated to reach $1.45 trillion.
However, for many people, especially those who continue to feel the sting of global inflation, learning how to budget while holiday shopping — and still getting all the items on their list, is a growing concern.
As a local, not-for-profit bank, HRCCU recognizes the strain that holiday spending expectations can place on members of our community and beyond.
Fortunately, this list of spending and budget tips for holiday shopping, including some excellent products offered by HRCCU, can help alleviate the financial pressure that builds this time of year.
Start by Setting a Holiday Budget
Sticking to a budget while holiday shopping obviously starts with setting reasonable spending limits. While studies from the National Retail Federation predict the average person will spend about $1,000 for gifts, food, decorations, and parties this holiday season, individual budgets may vary.
To determine a good budget for your needs and situation, we recommend revisiting spending patterns from past years while taking inflation into consideration. You may want to make a list of people you want to buy gifts for and how much you intend to spend on each of them, as well as write down a list of events to host or attend and what needs to be purchased or made for them to estimate the projected costs.
Add all these numbers together to determine a total holiday budget. Then, divide by the number of weeks between now and December 1st to see how much money needs to be set aside in a savings account to meet your goals.
Tip: Be generous when calculating estimates and round up. It’s always easier to spend less than the amount saved, rather than the other way around.
Smart Money Habits to Help Stick to Your Holiday Budget
Once you crunch the numbers and decide how much money you need to save, consider the following best practices when it comes to the actual purchase of holiday gifts and supplies. These tips can help you check off all the items on your list, while still staying — possibly even under, budget.
1. Price Check
No matter how extensive the planning, it’s common to find the perfect gift that’s way over budget. Don’t give in to temptation or decide that all is lost. For those who start their shopping early, it’s simple to ask about future sales or use a smartphone to price check on the spot.
Remember, many retailers will honor the lowest advertised price for hot holiday items.
2. Plan Ahead
One surefire way to bust a holiday budget is to wait until the last minute to buy gifts. Not only will shoppers miss some of the best early season sales, but the added stress of limited time will make them less diligent regarding prices and factors such as shipping.
For those who are worried about having enough cash and are reluctant to use credit cards, taking out a low-rate holiday loan to help pay for items early in the season may be an option. When sticking to a savings plan, it’s possible to pay it off quickly in the new year.
3. Don’t Forget Shipping
When it comes to planning, also remember that a price online isn’t final until the purchase is made.
Some items available online may be cost less than their in-store counterparts on the surface, but once shipping gets added, that discount may dwindle or even disappear. Especially as December draws near, pay attention to shipping times as well, as expedited shipping will cost even more.
4. Shop Slowly
Similar to waiting to the last minute, the habit of bundling holiday shopping into one trip can cause needless stress and lead to overspending. Holiday shopping sprees (even online shopping sprees) can be fun in the moment, but many people get caught up in the frenzy and stop being savvy about costs, foregoing price checking and ignoring shipping costs.
This is actually a phenomenon that researchers have dubbed the “shopping momentum effect.” It basically means people are more likely to spend more money once they spend some money. However, doing something as simple as leaving a store or holding items in an online cart and making a final decision later can counteract its effects.
5. Review Your Spending Frequently
A holiday budget is only helpful if you stick to it. Therefore, it’s important to make sure that you continually refer back to the total spent and update amounts as spending occurs. If the problem is spending too much too soon, it may be necessary to adjust your savings plan or consider alternative gifts for some people on your list, such as homemade options or group gifts.
Keep Your Budget on Track with HRCCU’s Low-Rate Holiday Loans
Budgeting for the holidays can always be a challenge, even with a strong plan in place and clear, reasonable spending goals. Whether inflation prices catch you off guard or unforeseen circumstances limit spending during the holiday season, HRCCU is here to support you as you balance financial fitness with the spirit of giving through our low-rate holiday loans.
Unlike the adjustable interest rates on credit cards and other personal loan options, HRCCU’s holiday loans offer borrowers a fixed interest rate and steady monthly payments that they determine in advance.
We also offer borrowers the unique opportunity to delay the first payment on their loans until February 2023, allowing plenty of time between the end of the holiday season and the first payment. Contact us for info about the HRCCU holiday loan program and start your application today.
