5 Budgeting Tips for Smart Holiday Shopping

A holiday shopping survey by Accenture found that only 33 percent of consumers plan to spend more in holiday shopping than they did last year. Another 76 percent said they plan to do research online to find the best prices for the gifts they want to buy. 

I think this is the right idea. Not setting high expectations for yourself and being careful about where you buy which gift is a strong start to smart holiday shopping. 

Aside from gifts, when you think about all the purchases you make –decorations, greeting cards, travel, food and cookies, etc.—it really adds up. According to the National Retail Federation’s Holiday Consumer Spending Survey, the average person celebrating Christmas, Kwanzaa or Hanukkah will spend $967.13, up 3.4 percent from last year.

Here are some ways to plan your holiday spending so you don’t start 2018 in debt:

1. Look at your discretionary income. Your holiday budget will depend on how much you have left over after monthly expenses are covered. Take a look at how much you spent during the last holiday season to get a sense of what you may need to buy this year. Come up with a realistic figure that you can afford to spend and stick to it.
2. Prioritize. When deciding what to buy, think about your family’s favorite traditions and memories. Invest in creating memorable experiences, not gadgets or trinkets that will be long forgotten by next year. Decide who you need to buy gifts for, maybe immediate family and a few close friends, and set a limit for how much you’ll spend on each.
3. Put together a shopping strategy. You can do a lot of research and comparison shopping from home before you step foot in a store. Look for coupon codes and determine which websites offer free shipping. You don’t have to shop on Black Friday to get good deals—many retailers are already offering clearance sales on fall apparel, footwear and other items now.
4. Don’t rely solely on credit cards. Don’t get me wrong—credit cards are a great way to purchase items online and offer more protections than cash, but don’t charge items if you can’t pay the balance in full when the bill comes.
5. Track your spending. Creating a budget doesn’t do much good if you don’t keep track of what you’re spending. Make a record of everything you spend related to the holidays, including clothing, postage, wrapping paper and more. If you go over budget in one category, cut back in another.

When the holiday season is over, consider a Christmas Club account for next year. It’s an easy way to set aside money each month. The funds you’ve accumulated over the year are electronically transferred to another Pinnacle account in early November so you can start shopping.

There are only six weeks left before Christmas. Make sure to use that time (and your resources) wisely!

Leslie Godfrey can be reached at 865-766-3079 or leslie.godfrey@pnfp.com.