Budgeting & Saving

How to Save on Holiday Spending

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We're officially in the run-up to the holiday season. In fact, half of Americans have already taken to the internet to kick off their shopping, according to a recent Affirm survey.

Creating a budget and tracking your purchases can help keep financial stress at bay. Doing so clarifies what you can afford, which can curb overspending and keep your finances intact during the holidays.

But that's not the only way to save on holiday spending this year. From finding the best deals to getting creative with gift-giving, keep the following tips in mind when crossing items off your holiday shopping list.

Make Your Gift List (and Check It Twice)

This goes hand in hand with making a holiday budget. Saving on holiday spending begins with knowing who you're shopping for in the first place. Take the time to list out who you'd like to give gifts to, along with roughly how much you want to spend on each person.

It's a simple act that could have a big impact on your wallet. Consumers anticipated spending an average of around $1,650 on holiday gifts in 2019, according to Experian data. Going into the holiday season with a gift-giving game plan can prevent you from racking up unnecessary debt.

Take Advantage of Major Sales Events

One way to lock in savings is to take advantage of the season's biggest sales events. Black Friday and Cyber Monday may bring big savings to budget-conscious shoppers. According to Consumer Reports, there's often an abundance of TV deals during this time. Just be mindful of overpriced products posing as great deals. It always pays to shop around and compare prices, especially on big-ticket items. Look for price tracker websites that let you see historical prices of products to see if the sale you're seeing is actually a discount.

Bookmark Your Favorite Sites

Look to your favorite retailers for upcoming sales this holiday season. Check their websites frequently for promotions that could help stretch your dollars further when buying gifts for friends and family. If you're strapped for time, consider signing up for email blasts from certain retailers. This way you'll get notifications about upcoming sales events right in your inbox—and can cancel them once the holidays are over.

You may be able to layer additional savings by using a store credit card or rewards card at checkout. Many retailers dole out extra discounts to cardmembers, and certain rewards credit cards may offer bonus rewards at certain retailers. Just be sure you'll be able to pay off your purchases after the holidays—carrying a balance could wipe out any savings, thanks to high interest rates.

Bring Down Your Shipping Costs

A recent Qubit survey found that 50% of consumers are now doing the bulk of their shopping online. Shipping charges can add up fast when you've got a lot of people on your shopping list. Luckily, there are ways to bring down your total spend:

  • See if you can eliminate the shipping fee altogether by opting for in-store pickup.
  • Wait to order until you have enough in your shopping cart to meet the retailer's free-shipping thresholds.

Explore Outlet Shopping

Heading to an outlet mall—or shopping at outlet stores online—could translate to big savings—often to the tune of 25% to 65%, according to Consumer Reports. You may have to settle for off-season items or last year's models, but it may be a small sacrifice if the price is right.

Some other holiday shopping hacks include:

  • Shopping Tuesdays through Thursdays: This could help you avoid the holiday rush that typically floods in on weekends—that means fewer crowds and less competition for inventory.
  • Checking out the clearance sections: Online or in-store, these sections can provide even greater savings.
  • Inquiring about any available coupons: Some outlet malls send coupons and news about promotions by mail and through email.

Redirect Your Entertaining Budget

With the coronavirus pandemic continuing, many folks are planning on downsizing their holiday get-togethers this year, according to a recent Morning Consult survey—and close to half plan to cancel them altogether. The silver lining is that this could create some breathing room in your holiday budget. Any money you would have normally spent on entertaining can now be redirected to your gift-buying budget. The same goes for funds you may have set aside for airfare or other travel.

If you aren't hitting the road or playing host this year, you could also leave that money in your savings account or use it to pay off your credit cards after the holidays.

Don't Rule Out Homemade Gifts

There's a way to create meaningful homemade gifts that don't feel low-budget. Sites like Pinterest are a treasure trove of DIY holiday gift ideas that have high-end flair. Here are some clever ideas to consider:

  • Personalized boozy bundles, like flavor-infused vodkas or make-ahead hot toddy kits for chilly winter nights.
  • Gourmet desserts and baked goods with a holiday twist; think peppermint bark or homemade apple butter in a mason jar.
  • Holiday-inspired floral arrangements. This could be everything from a festive homemade wreath to a DIY arrangement of succulents.

Get a Solid Rewards Credit Card

One in four consumers planned on opening a new credit card last holiday season, according to an Experian survey. If you've earned cash back throughout the year, you could use that money to pay for a portion of your holiday gifts. Those who are thinking about getting a new card this year would be wise to consider one with a good intro bonus. Just know that carrying a balance could negate your rewards, so paying it off after the holidays is always advised. The following contenders have no annual fees:

  • Chase Freedom Unlimited®: This card offers $200 cash back when you spend just $500 in eligible purchases in your first 3 months with the card. Many consumers could hit this minimum with planned holiday spending. You'll also get 15 months of introductory interest-free financing on eligible purchases (after which your interest rate will be 14.99% to 23.74% variable depending on your credit), which could help pay off those gifts.
  • Citi Rewards+® Card: With this card from our partner, you can earn 15,000 bonus points when you spend $1,000 on the card in your first 3 months; those points are redeemable for $150 in gift cards at thankyou.com. You'll pay a 0% intro APR on eligible purchases and balance transfers for 15 months, after which your interest rate will be 13.49% to 23.49% variable based on your creditworthiness.

The Bottom Line

There are plenty of ways to save money this holiday season. Thinking outside the box and taking advantage of deals and sales events can go a long way in preserving your budget. No matter what, you can protect yourself from potential identity theft during the holidays by signing up for free credit monitoring. It's a simple approach to keeping your credit safe all year long.