The average amount of debt that Americans accumulated during the holidays last year was over $1,300 (CNBC). This probably doesn’t seem all that surprising seeing as the holidays are when most retailers have their largest sales (e.g. Black Friday, Cyber Monday, countdown to Christmas shopping/clearance sales, etc.). The pressure from advertisers, the need to buy gifts for family, and even the euphoria of shopping/finding a deal all come together to ruin our odds of keeping a balanced checkbooks during the holidays. As this year has seen an unprecedented turn for our economy, and many are still struggling with the effects of the pandemic, it might be time to reconsider our shopping habits to ensure we get the most for our dollar and don’t break the bank for 2021.
I’m going to breakdown the strategy into 5 P’s
Prepare for unforeseen circumstances
Probe for the best deals
Panic mitigation strategies for overspending
Plan ahead- It should go without saying, but don’t spend more than you can afford. The holidays are no surprise for most, if not all, of us. Since this isn’t your first rodeo you should know better by now and hopefully have saved up some money over the past few months to spend during the holidays. If not, spoiler alert, the holiday season in 2021 will be similar so plan ahead of time to prevent yourself from spending more than you can afford. With 4 weeks until Christmas you still have two to three paychecks to spread your spending across.
Prepare for the worst/best- Leave some cushion room for surprise deals. Don’t blow all your budget on Black Friday to only have to break your budget when there is a clearance sale a week later that you can’t just resist. Look back at your credit card bills or receipts from last year and make sure you have enough money saved to cover a similar amount plus a 10% buffer for unforeseen deals. This buffer is important to maintain in general for the holiday season, not just saving for extra buying power. Even if you feel you don’t need a buffer because you never over shop, don’t forget how horrible of a year we’ve had. It could easily end with your water pipes bursting and the emergency plumber cleaning out your rainy day fund and then some. Paying the plumber is a lot harder when your last three paychecks when to Amazon.
Prevent overspending- Know your limits and limit what advertisers know about you. Once you’ve spent your holiday budget unplug yourself from online retailers, marketing emails, new about “must buy” deals and tempting ads on social media you might fall for. Sometimes ignorance truly is bliss. This might also end up being harder than you might expect, especially this year. Retailers are still trying to play catch up from lost revenue during spring shut downs which means your email will be hit harder with targeted ads, and the ads you see across the internet will be extra tempting this year. Stay focused, consider unsubscribing to emails (you can always resubscribe after the holidays), turn your Adblock on, and remember the less time in front of a screen or at a store means less odds of your temptations getting the best of you.
Probe for the best deals – Save as much as you can then make every dollar you saved go further to get the most out of your money. This can only happen when you’re willing to put in the elbow grease to get the best deals that are available. This has become harder over the years seeing as nothing ever sells at retail price which makes it harder to determine if 50% off really is a deal or just an extra 10% off from the normal “mark down”. There are tools available to help, such as websites like camelcamelcamel.com and slickdeals.com which allow you to look up price histories and deals across multiple sites including expired ones which will help you gauge if you really do need to buy now or if you can delay the purchase for a future sale. After you narrowed down a good deal on an item you already planned to buy, start piling up as many promos as you can. 50% off is good but maybe the retailer also has coupon code that gets you a $10 credit for spending $100, or a free shipping coupon code that you can dig up on google. Don’t just stop there, now that you have the best deal and promo code/ credits apply consider which credit card you are going to use. Maybe the item is the same price on Amazon and Target, but you perhaps you get 5% back at one vs. the other based on your credit card perks. Other things to consider:
- If you are purchasing a subscription or creating a new account for something ask you friends if they have referral code so you can get extra value.
- It’s not uncommon to see 20% off on coupons during this time of year so it might make sense to “prepay” $80 for $100 worth of Doordash credit that you know you will end up using anyway.
- The abandoned cart trick, if you are buying something straight from the manufacturer’s website rather than a big retailer like amazon consider getting to the last step of checking out besides pressing the final purchase button. Wait 24-48 hours and there is a good chance you will see an email along the lines of “Did you forget to finish your purchase? maybe this 10% discount will help you finalize your order.”
- Credit card companies have also been extra generous this year, so double check your credit card portal for additional offers you might be able to activate such as potential statement credits for using a certain retailer or even a lump sum of points for spending a certain amount in a specific category.
Panic response plan- Did you spend more than you thought you would? Is your anxiety now preventing you from enjoying what you purchased? It’s okay to get cold feet, consider returning some of your purchases or exchanging gifts you received for store credit to off set some of the burden. Many companies are extending return policies this year due to the pandemic and it might be worthwhile to consider returning some of the items that no longer seem as necessary as they did at 3 am the morning after Thanksgiving.
In conclusion, this holiday season could make or break your 2021 goals of being financially stable. With all the uncertainties still remaining with the pandemic and economy, it’s best to take a more precautious approach to holiday shopping this year. Saving should be your top priority and maximizing how far your dollar goes should only come into play when you are spending money you have already set aside. Don’t overextend your budget; it’s unlikely your strongest 2020 memory will be what a great holiday season you had thanks to all the stuff you bought. Let’s just double down on putting this year behind us and gear up for an uplifting 2021.
Your mode of describing all in this piece of writing is in fact pleasant, all be capable of simply being aware of it, Thanks a lot.
Wow, amazing blog layout! How long have you been blogging for?
you made blogging look easy. The overall look of your web site
is excellent, as well as the content.
Thank you for this very good posts. I was wanting
to know whether you were planning of publishing similar posts to this.
Keep up wrfiting superb content articles!
Pretty! This has been an extremely wonderful post.Thank you for
supplying this info.