Spending can get out of control in the blink of an eye, any time of year. That effect is only multiplied during the holiday season. Between family events and all of the gift giving, we need to get creative when looking for ways to avoid breaking the bank.
The holiday season between November-December is predictably the biggest consumer spending time of the year for many businesses. The past few years have seen the U.S. spending between $3-$4 TRILLION on holiday-related expenses. According to another study from the National Retail Federation, the average American spends around $900 on all things holiday related.
Those are some pretty staggering numbers when you step back and take a look at them. With all that money being spent, we also have plenty of opportunities to save! We don’t need to fall into that $900/person bucket if we can avoid it.
Creative Holiday Saving
How can we continue to build our wealth without sacrificing the good times that the holiday season offers? We don’t want to break the bank on gifts, but also don’t want our loved ones feeling unloved! Let’s have a look at some tips you might not be aware of for wise holiday saving and shopping.
Money You Never Knew You Had
Something that gets overlooked all too often is the perks associated with using a credit card. We’ve talked before about the perks of getting into the world of credit from a younger age. Certain cards have associated benefits like a 0% APR, points on travel, etc. These can be used to your advantage when it comes time to start buying gifts for the holidays.
In my personal case, my Bank of America Travel Rewards card provides points for general spending and double points for travel spending. Over time you rack up a bunch of points, which can be used to redeem gift cards at hundreds of retail outlets. Over time, I’ve accumulated over 100,000 points from work-related travel. I have been able to expense these travel fees with my company, thus getting all of that money back in my bank. The points on the card, however, keep adding up – it’s effectively free money in my pocket!
A lot of folks have no idea about the full perks they have access to with their spending methods. I was able to get myself a $500 Best Buy gift card last month, used on a new flat screen TV and headphones. Getting them both was basically free, as the card came from credit card points and I was able to expense the underlying cash.
When shopping this holiday season, check if you have any perks on cards or other free money you may not know about! I plan to redeem another $500 gift card for Amazon and use it to get all my holiday shopping done. Not a dime comes out of my bank account or savings – I’d call that a big win.
Scour For Deals
In the event that we do need to fork over our hard-earned dollars instead of credit card points, we have other ways of getting the most for our cash. There are plenty of plugins and apps out there which help us find the best deals.
To the right is a screenshot of a Chrome plugin I use called Honey. It’s a free plugin which detects e-commerce sites and when a purchase is about to be made. From there, Honey scours the web and its internal database to ensure you are getting the best price. If a discount is available that you aren’t aware of Honey will tell you about it!
In addition to the Chrome plugins and apps out there for you, make sure to be looking at holiday deals wherever you shop. You’d be amazed how many folks pay list price for the sake of convenience, instead of shopping around for the best deal.
Set a Budget Upfront
Unless you are like me and have done 10 flights back and forth to Australia, you may not have enough credit card points to cover all of your holiday shopping. When the time comes to inevitably tap into your bank account, make sure you do so with a plan. Just like groceries, utilities, and other expenses, a specific budget for “holiday shopping” goes a long way.
Start with a dollar number in mind for overall holiday spending. Remember that the average American is dropping between $700-900 all in. Make a list of everyone on your shopping radar for the season. After getting a rough idea on what to buy for each, it’s time to understand the ballpark spend overall.
Once you know what to get and who to get it for, try using the credit card point method, or find deals to reduce that overall spend. Anything left over becomes your budget to work with for the year. Using some of the tricks above will get your overall spend down significantly!
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Joe Savoia
Joe is a 2014 graduate of Northeastern University and currently works in a field sales role for technology company Acquia. He has worked internationally as one of Acquia’s earliest Australia-based employees and helped in the early stages to develop that region. Today Joe is based out of Boston and lives in Somerville, MA. Joe’s primary interests vary widely, including everything from robotics/AI to finance, blockchain, and the rapidly evolving world of tech we live in.