How to Set a Realistic Holiday Shopping Budget You Can Live with

The best way to craft a budget for the holidays is to write down who you will be spending for and how much you plan on spending for each individual. If you have 5 friends you want to buy gifts for (at $50 each) and 5 family members you want to buy gifts for (at $100 each), make note of it. Writing things down not only helps us memorize more but it also helps us stick more closely aligned to our budgets.

Start Early or Later Than Everyone Else

Often times, it pays to have a contrarian viewpoint with regards to shopping. Contrarians will say if you want to save the most money on a winter jacket, it’s best to buy one in the summertime when no one else is looking purchase one. In the same vein, you can consider shopping earlier than everyone else too when it comes to holiday shopping. You’ll see more deals after Christmas has ended and you’ll see potentially new and unknown things before Thanksgiving has started. It helps to be early and in some cases late!

Avoid Falling for Common Pitfalls

Do not let the “value” and the “discounter” in you spend more than you have too! Just because something is on sale, that doesn’t mean you need to buy it. Yes, finding good deals is great but at the end of the day, they are deals for a reason, they are meant to make consumers spend more money. You really aren’t saving money if you buy something on sale that you never needed in the first place. This is counterintuitive logic.

Buy Now Pay Later

Beware of overspending with Buy Now Pay Later (BNPL) services. Although these services may be great for low interest borrowing—BY DESIGN—they are meant to make you spend more! Psychologically, they make consumers spend more, since they break larger purchases down into payments over time, exactly in the same was credit cards do. For the most part, these services are just another thing to worry about that lives outside your budget. They are definitely something you should be mindful of because they can definitely make overspending easier.

How Can Shoppers Come Out Ahead this Holiday Season?

Try to avoid emotional spending and always plan ahead for the items you know you will be getting regardless. Once you have your list, it will make sense to carefully watch those items and be mindful of the best time to make a purchase. You can directly track items on Amazon and put price alerts on participating shopping website you plan on visiting. You don’t need to get too fancy, you can simply put the items on your watchlist and sign up for email alerts for upcoming deals and price changes.

Avoiding Overspending

In order to avoid overspending, consumers should definitely consider re-gifting to save money. No one is going to judge you this year if you don’t overspend. Everyone’s financial situation has changed in the last couple years for better or for worse.

Finally, it may not be a bad idea to use a credit card that offers price protection. Many consumer credit card companies currently offer this feature. This way if you do unfortunately overpay for any items, you have 60 days to get the price difference reimbursed.