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Your guide to not going broke over the holidays

Emilee Geist
Read Time : 13 Minutes










Your guide to not going broke over the holidays













Your guide to not going broke over the holidays

KEEP THE JINGLE IN YOUR POCKETS

2020 has been a challenging financial year for many, and the holidays are a notoriously pricey time of the year. To help you (and your budget) survive the season ahead, Cheapism reached out to personal finance professionals, savvy shopping experts, and other famously thrifty professionals for their top end-of-year financial tips.



CREATE A THOROUGH HOLIDAY BUDGET

As the holiday season approaches, one of your first steps should be to create a detailed holiday budget, advises Kevin Gallegos, vice president of client enrollment for Freedom Debt Relief, a debt-resolution company. “It’s the best way to save, yet many people talk about sticking to a budget while not actually having one written down,” says Gallegos. “List everything you might spend on the holiday season. People tend to think only of gift items for family members. But don’t forget recipients such as teachers, doctors and neighbors; cards and postage; decorations; entertaining including food, drink, special garments, and child care.”



ALLOCATE A REALISTIC PORTION OF YOUR INCOME FOR HOLIDAY SPENDING


Most people should allocate no more than 1.5 percent of their income for holiday expenses, says Carla Dearing, CEO of Sum180, an online financial-wellness service. “So, if you make $50,000 a year, this means your holiday budget is $750,” says Dearing. “Keep in mind that this figure covers everything, not just gifts. Big-ticket items such as travel expenses should fit within this budget, and smaller expenses like holiday decorating or special dinners out should be factored in as well.”



START PENNY PINCHING IN ADVANCE OF THE HOLIDAYS

To help set aside some extra cash for the holiday season, Jill Caponera, a consumer savings expert for the coupon site Promocodes.com, suggests implementing two weeks of no-spending per month. This may sound impossible, but Caponera is not suggesting you eliminate necessities. “Besides gas in your car and groceries in your fridge, try going on a spending fast for at least two weeks each month where you don’t spend money on any extras, such as that daily coffee you love, or that new shirt you don’t need,” she explains. “You’d be surprised how much extra money you’ll save for holiday gifts when you’re not constantly spending it.”



BOOST YOUR HOLIDAY FUND

Stashing away cash for the holidays may feel impossible with an already tight budget, but instead of merely focusing on saving money, try earning more, suggests Woroch. “For instance, take a look around your home and closets for items you no longer use, such as clothing, electronics, toys and home goods. You can sell these at a garage sale or on Craigslist,” Woroch suggests.



MAKE A LIST AND CHECK IT TWICE


Who doesn’t love giving gifts to people? But those expenses add up, says personal finance expert Rachel Cruze, a New York Times best-selling author and host of “The Rachel Cruze Show.” “Make a list of everyone you need to buy for and only buy for those on the list,” Cruze explains. There are lots of free holiday activities, so spend some quality time with that person instead. They’ll appreciate that just as much, if not more, says Cruze.



RESEARCH THE ITEMS YOU PLAN TO BUY


If you know ahead of time what you want to buy for some of the people on your gift-giving list, get online and compare prices at various retailers. A little legwork can translate into a great deal of saved money on your holiday shopping.



DON’T SPEND MONEY YOU DON’T HAVE


While it might seem like common sense, it’s a concept many people just don’t get, says Cruze. “You can’t afford an item if your only option is to put it on a credit card,” Cruze emphasizes. “What might seem like a good idea in December becomes an awful idea in January when all the bills start rolling in. Don’t buy stuff you can’t afford.”



TRACK EVERYTHING


One of the main reasons that spending can get out of control during the holiday season is that everything moves so quickly and people often forget how much they’ve already spent, says Ryne Higgins, senior manager of ecommerce for Peacock Alley, a high-end linen company. “Track your spending — gifts, donations, meals — in order to reign in those extra dollars,” says Higgins.



DON’T SHOP FOR YOURSELF

Who hasn’t fallen into this trap? You’re shopping for gifts and you see a nice sweater for yourself, or a new pair of shoes you’d love to have, or perhaps the perfect lamp for your guest room. Those impulse buys can be a slippery slope. “This should really go without saying, but it’s amazing how many people go out to do some Christmas shopping and end up buying something for themselves,” says Cruze. “Really? Is that what Christmas is all about — buying a scarf for yourself?”



BUY SECOND-HAND ITEMS

As the holidays shift into full swing and you’re shopping for gifts, be sure to visit local thrift stores, tag sales, or even use online shopping apps such as Poshmark, Tradesy, or eBay. These apps are great resources for snagging pre-owned clothing, shoes, tech products, or accessories that still have plenty of life in them, often for around half the sticker price. “When browsing online aps, try using the search term ‘NWT’ meaning “new with tags” for brand new, unused items at a deep discount,” suggests Caponera of Promocodes.com.



SHOP WHEN PRICES ARE LOW

Savvy shoppers wait for major shopping holidays such as Black Friday or Cyber Week to shop for holiday gifts, says Caponera of Promocodes.com. “TVs, electronics, clothing, shoes, home decor and much more will be heavily discounted over the Thanksgiving weekend, making it the perfect time to stock up on gifts,” she says.



SHOP STORE BRANDS

Big-box retailers such as Walmart and Target carry their own store brand for household items, apparel, home decor, and many other categories. And often, the store brand is far cheaper (and sometimes more popular) than the mainstream name brand items, Caponera says.



USE CASH WHEN SHOPPING, NOT CREDIT CARDS

Some studies report that people spend up to 15 to 20 percent less when paying with cash or a debit card, instead of a credit card, says Gallegos of Freedom Debt Relief. “Before heading out to shop, determine for whom you are shopping and how much your budget allocates for gifts, and take only that amount of cash with you,” he advises.



VISIT YOUR LOCAL DOLLAR STORE

Discount variety stores that sells items for $1 or less have popped up all over the country. And while these stores may not always have the most high-quality items, they can certainly be a good place to shop for basic goods you may need for the holidays, saving quite a bit of money in the process. “The dollar store is a great place to shop for candles, glassware, cookware and more at extremely low prices,” says Caponera of Promocodes.com. “You could purchase small yet thoughtful gifts for five people for under $20.”



SIGN UP FOR DEAL ALERTS


While daily and weekly emails from your favorite retailers can start to clutter up your inbox, it’s worth dealing with over the holiday season, says Sarah Hollenbeck, a shopping and retail expert for BlackFriday.com. “As stores start rolling out their holiday promotions, they regularly send out emails with coupon codes and special deals for subscribers,” Hollenbeck explains.



TAKE ADVANTAGE OF TECHNOLOGY


Using technology while shopping is no longer an option, it’s a necessity, says Hollenbeck of BlackFriday.com. “To save money, consumers need to be smarter, and that means taking advantage of every possible deal they can,” explains Hollenbeck. “Checking retailers’ websites, emails, and social media can offer greater discounts than you would find just walking into a store, meaning shoppers can easily save hundreds this holiday season if they use technology to their advantage.”



GIVE YOUR TIME

Save money on gifts by opting to give your friends, loved ones, and others in your life the gift of your time. It means much more than a present bought at a store for both the giver and the recipient, says Gallegos of Freedom Debt Relief. “Offer to shovel snow for an elderly neighbor or family member through the winter or make plans to care of the yard come spring and summer,” suggests Gallegos. 



DO A FAMILY PROJECT FOR OTHERS IN LIEU OF GIFTS


Create memories as a family while keeping your holiday budget under control. “Assemble food baskets, provide modest gifts to a needy family, knit hats for the troops or sew blankets for babies,” says Gallegos.



MAKE HOMEMADE GIFTS FOR SERVICE PROVIDERS


Rather than giving cash tips for everyone from your doorman to your dog walker, consider making a simple but thoughtful gift instead. “The idea is to let them know you appreciate their service. That doesn’t have to be with a big check,” says Gallegos of Freedom Debt Relief, adding that options include “baked goods, a small gift bag of personal care items, or a small gift certificate to a local restaurant where the recipient can take a lunch break.” Remember that some people, such as teachers, mail carriers, delivery personnel, doctors and coaches, are not allowed to receive cash gifts, Gallegos says.



Regift Unused Gift Cards


If you’ve had a gift card sitting in your draw all year long collecting dust, consider regifting it to save yourself money. Yet another alternative is to use the gift card to purchase holiday presents.



LOOK FOR BONUS REWARDS ON CREDIT CARDS


Many retailers participate with credit cards to increase cash back during holiday promotions. Check your credit card resources for those special increases, advises Ashley Dull, credit strategist at CardRates.com.



GIVE FAMILY PHOTOGRAPHS AS GIFTS


Family pictures can be a thoughtful and budget friendly gift. Do you have photos of your family’s cherished memories tucked in a drawer or closet around your home? Invest in a frame for the picture and give it to a family member who will enjoy it.



REPURPOSE HOUSEHOLD ITEMS TO CREATE DECORATIONS

No need to run to the store and spend a small fortune on items to decorate each holiday season. Instead, try making decorations from common items around your house, or items you might otherwise discard.  String together popcorn and dried cherries to decorate your Christmas tree instead of buying garland or have your children make decorations with construction paper, glue and crayons, they can even decorate old mason jar lids. Need more inspiration? Check out Pinterest.



HANDLE MONEY WISELY TO PROTECT YOUR WELL-BEING


Remember that nothing is more important than protecting your well-being — physical, mental, emotional, and financial, says Gallegos of Freedom Debt Relief. “Finances contribute significantly to holiday stress, perhaps this year more than ever,” Gallegos emphasizes. “From a financial perspective, if you safeguard your budget, you’ll make it through the holidays with less stress and a clearer conscience — which will bring plenty of joy, now and in the New Year.”








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