What’s Your Holiday Spending Plan?
Let’s start by looking at some 2022 holiday spending projections to give you insight on what you can expect in the coming months.
A recent forecast from Deloitte shows that consumers are likely to feel the impact of inflation as they look to complete their holiday shopping late into this year. An article from Retail Dive shares that as a result of the economic downturn this year, holiday sales are only expected to grow between 4% and 6%, reaching $1.45 to $1.47 trillion this season compared to an increase of 15.1% during last year’s period, according to Deloitte’s recent forecast. So, what does this mean for you?
A continued rise in prices due to inflation significantly decreases your purchasing power throughout the market. Many families will find themselves revisiting their budget and coming up with new plans for gift giving and holiday party planning to stay within their financial means this year. Your main financial goal throughout the holiday season should be to avoid running up credit card debt or dipping into emergency savings. This will help keep your stress low so that you can head into the new year with financial peace of mind.
Now, let’s talk about your holiday spending plan.
The first step in preparing yourself for these next few months is knowing your financial situation. Take time to sit down with the money managers of your household to review your financial picture and spending plan for the holidays. To better understand what holiday spending you have available, map out the funds you have coming into your accounts over the new few weeks, subtract any bills that are due in this timeframe, and make a list of any holiday-related purchases you know you have coming up to see if you’re on track.
As a Financial Well-Being Coach, here are a few holiday budgeting tips I believe are the most beneficial:
- Make a list of the family/friends/parties you need to purchase gifts for.
- Set a limit for each person according to gift expectations and what fits within your budget.
- When budgeting for children’s gifts, have them make a list and pick the top two items they would love to have.
- Create your shopping list and look for sales on any and everything.
- After finishing your holiday shopping for this year, set up a Holiday Savings account to give yourself a cushion and minimize the stress when this time comes again next year.
Looking for more in depth assistance on holiday budgeting? We’ve got you covered with a blog taking you back to the basics with Budget Building for the Holiday Season.
Bonus Tip: Take advantage of Cashback Checking account offers or Credit Cards that reward you with every purchase. If you already plan on spending a good chunk of change this holiday season, you might as well be rewarded for those purchases with points or cash in your pocket. Many financial institutions will introduce special credit card offers around the holidays, like we do with our $200 Visa Signature Offer. Feel free to shop around to get the most bang for your buck – literally. Just remember to make smart choices with your credit card.
Lastly, let’s find some ways to stretch your dollar.
Again, the most important tool to staying on track with your holiday spending is setting a plan and sticking to your budget… but it can’t hurt finding other places to cut back or save. Here are some suggestions if you find yourself struggling to cover all of your holiday expenses:
1. Cut Back on Spending
- The first place to start when looking for a quick way to save some cash is to cut back on the small, unnecessary purchases. Consider skipping your daily Starbucks run or your weekly Happy Hour after work. While it may not seem like a lot of money in the moment, these purchases add up overtime. You may be shocked at how much you find yourself saving.
2. Maximize Sales
- Black Friday, Small Business Saturday, and Cyber Monday are right around the corner. Check out this blog which shares tips to make the most out of these sales and your holiday shopping trips this winter.
3. Group Gifting
- A great way to cut back on spending is through group gift giving. Talk to your siblings about going in on a gift for your parents or round up your cousins to purchase something special for your grandparents. On top of getting to save a little money personally, you’ll get the satisfaction of giving the recipient something more special or expensive than what they may have gotten otherwise.
4. It’s the Thought that Counts
- No matter what you decide to gift someone this holiday season, please remember – it’s the thought that counts. Whether you purchase the #1 gift off of someone’s list, make something from scratch, or browse the local thrift store for a diamond in the rough, the holiday season is about celebrating with the people that mean the most to us. If there’s anything these past few years have taught us, it’s that spending time together is the best gift of all.
5. Shrink Your Circle
- Consider cutting back on how much you spend on each person, or the amount of people you buy for in general. If you typically buy for extended family members or groups of friends, don’t be afraid to have the tough conversation of pausing or simplifying the gift giving for this year. The odds are that these people will completely understand wanting to cut back because a lot of us are in this same situation. It’s all about spending quality time with the people you love anyway, isn’t it?
The holiday season is supposed to be a time for rejoicing, reminiscing, and recharging with the ones we love after a long year. We know holiday spending can be challenging, but I hope the information on this year’s holiday shopping trends and the tips to creating a plan and sticking to your budget will provide some peace of mind for the season. Please remember that at CommunityAmerica, we are here to help all of our members feel secure throughout their financial journeys. Schedule a financial well-being meeting with one of our coaches today to discuss your holiday spending plans. Happy Holidays!