While inflation has been bearing down on society for months, the holidays will come on time as they always do. Many shoppers may wish to start early when preparing for the holidays this year in anticipation that inflation will impact their holiday shopping season.
What can you to do lessen the impact of inflation while still making the holiday season magical? Start early and set expectations.
Make a List and Check It Twice
Start now by thinking about what you want your holiday season to look like. Determine who you’ll be buying gifts for, and start making a list.
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If you need to cut back this year, set those expectations now. Pivot to a simpler celebration and focus on what is important to you and your family. Communicate your holiday expectations early – if you’re setting boundaries and implementing a spending limit, let your family and friends know your plans. They may be relieved and in turn won’t feel obligated to overspend within their own budgets as well.
Reassure your friends and loved ones that the holiday season can be just as magical without going into debt, and that you can find ways to enjoy the season that are easier on your wallet. If others in your life are still comfortable spending more and would like to continue to do that, that’s all right too – but you need to do what is best for you financially, during the holidays and the whole year through.
So, set a budget, understanding that prices may rise between now and the holidays. If you want to account for inflation, you might want to see what you spent last year and add an additional 10%-15%, depending on the categories where you’ll be spending the most.
If you see something on your list at a good price, pick it up and stash it until the holidays. Keep track of what you’ve bought for gifts, so that you’re not purchasing duplicates. Either write yourself a note or try using an app. Christmas Gift List Tracker (opens in new tab) (iOS) and Christmas Gift List (opens in new tab) (Android) come well-reviewed.
Look for Cash Back
If you can’t find an item on sale, try using a couponing app or browser extension, such as Ibotta (opens in new tab) or Rakuten (opens in new tab), to see if you can make some money back or earn points toward your purchase.
You may want to utilize credit cards with great rewards while holiday shopping, as long as you pay them off right away – periods of time when interest rates are rising are the worst times to carry a balance. Instead, try treating your credit card like a debit card. If you’ve been using a credit card that accumulates points or cash back, put those points or cash toward your holiday purchases to offset some of the inflation that you may be feeling.
Save on How You Get Home for the Holidays
Plan ahead for your travel in addition to your shopping. If you usually fly during the holidays, flights may be cheaper if you buy them now – or you may want to set up alerts for your flight route to find the cheapest tickets.
And finally, while gas prices have been falling lower for the past several weeks, anticipate spending more on fuel to drive this year than last year. To try to minimize those fuel costs as you maximize your mileage, take advantage of some gas-saving tips that actually work. For example, quit hauling around extra junk in your trunk and make sure your tires are properly inflated. Hey, when it comes to spending around the holidays, every little bit helps.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA.
Diversified LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. A copy of Diversified’s current written disclosure brochure, which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
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