The holidays are here, and inflation continues to drive prices higher. This year, it may be more important than ever to stretch your dollars further as you prepare to celebrate the holidays.
Consider these six ways to enjoy the holiday season while spending less money.
Make a Plan
Before you start holiday shopping, create a budget and a shopping list. If you’re trying to save money, consider buying fewer gifts or less expensive gifts than you normally do. You may be tempted to purchase other items—especially if they’re on sale—but if you have a plan and a list, you’ll have an easier time sticking to it.
You can also save money by purchasing gifts from the right retailers, as you can often find the same item at different prices from different retailers.
If you’re looking for a specific item, take time to shop around and find the seller that offers the lowest price. In addition to the big box stores, remember to check local independent retailers and wholesale clubs. For some items, you may be able to find a good deal from online resellers.
Make Sure “Deals” Really Are Good Deals
Some retailers mark up prices just before the holiday season, only to advertise a “discount” when they move the prices back to their previous level. If you’re purchasing an item mainly because you think you’re getting a good deal, take time to make sure you’re not actually just paying the regular price, jacked up a few days ago to appear like a discount today. You can use an online tool like Slickdeals or CamelCamelCamel, which track historical prices, to make sure you’re really saving money.
Have a Plan for Repaying Credit Purchases
Before using credit to make holiday purchases, whether it’s with a credit card, Buy Now Pay Later, or a personal loan, make sure you have a plan for repayment. And keep in mind that any interest you may eventually pay will essentially drive up the cost of your purchase.
For example, if you use a credit card and won’t be able to repay your balance within the next month, you’ll have to pay interest on the purchase. The longer it takes you to repay your card balance, the more you’ll end up paying.
If you’re using Buy Now Pay Later, you may not have to pay interest, but if you aren’t able to make each payment on time, you’ll end up paying steep late fees. In addition, making holiday purchases without a plan for repayment may have an impact on your credit score, as the amount of your outstanding debt is an important factor in your score.
If you want to make a purchase with credit but you aren’t sure how or when you’ll be able to repay it, that’s a sign to reconsider the purchase.
Use Credit Card Rewards
If you’ve accumulated credit card rewards this year, holiday shopping may be a good time to use them. Some credit cards offer cash back that you can use to reduce your credit card bill for the month or to make additional purchases.
Traveling during the holidays? You may be able to use credit card rewards to save money on flights or hotels.
Don’t Apply for New Credit Cards While Shopping
When you’re making a holiday purchase, it may be tempting to sign up for a store credit card to get an additional discount. However, applying for that store credit card will trigger a new inquiry on your credit report, which may ding your credit. In addition, by adding more cards, you may be more tempted to spend more than you’ll be able to repay within a reasonable time, leading to higher interest fees and higher credit card bills. And that’s not helping you save money.
Work to plan your holiday spending carefully and keep track of how your spending is affecting your credit. If you’re not a member, consider trying ScoreSense with a 7-day trial to easily monitor and track your credit across all three bureaus.