Holidays, and in particular, holiday spending can leave your budget seriously bruised…even if you do hit all the sales.
Remember, the stores are offering these great bargains out of the goodness of their hearts. They’re doing it to get you to their stores (or websites) to sell you stuff beyond the 55-inch 4k, 3D capable OLED television for $49. I mean, if you saved hundreds on that, you have hundreds of ‘extra’ dollars, right? And where better to spend it than the store that ‘gave’ you all that extra cash?
Don’t fall into the Black Friday trap. Have a holiday spending budget and stick to it like Odysseus sailing past the Sirens songs of deep discounts.
Holiday Spending Heats Up
Black Friday is also no longer a one-day event. It has morphed into a spending extravaganza that lasts almost 2 weeks. There’s early Black Friday specials that have already begun at some stores, there’s Amazon Black Friday Week, as well as Cyber Monday.
Retailers make about 30% of their entire year’s revenues during this time of year. And according to research by retailer industry researchers RetailMeNot, stores are starting promotions earlier and leaving them in place longer than ever before. Also, most are revamping their strategies from last year as online shopping has begun to take off in earnest.
Software giant Adobe expects Cyber Monday to pull in $6.6 billion in sales this year, a 16.5% rise from last year. And mobile sales will exceed desktop sales for the first time in history. RetailMeNot anticipates the entire weekend’s sales will be 47% above last year, with the average consumer spending $743, this weekend alone! And most people spend about $967 on Christmas presents during the entire season.
While all this sounds exciting, remember, according to CNBC, the average person has $1000 in their savings account. That means a Christmas shopping spree could wipe out years of savings.
You Don’t Have to Be a Grinch
It’s certainly easy to get wrapped up in this time of year and spirit of giving can be tough to suppress. But there are some solid tips to help you get through Christmas so you aren’t financially recovering for 11 months until the holidays come around again.
•The List. Have everyone make a list of their top 3-5 (depending on how many you’re buying for) gifts.
•Stay focused. For big families, use Secret Santa so everyone isn’t buying for everyone else.
•Use tech to your advantage. Set up your online banking personal financial management tool with specific spending limits so it can alert you when you’re getting close.
•Reverse engineering. Work backwards by setting a specific amount for spending and divide by the number of people you’re buying for.
•Change the game. Sink it all into a holiday getaway and avoid the issue entirely.
Other ideas revolve around handmade gifts – give cookies or homemade jams and jellies to friends and family. Knit a scarf or have kids make their own cards. Or get each person one thing they really want within a certain price range. Most of these ‘important’ gifts are forgotten and lost in a closet or shed in short order anyway.
The holidays aren’t about spending tons of money, or getting the most gifts. It’s about celebrating with friends and family. Staying focused and not caught up in the spending frenzy is the best way to have a great holiday without a spending hangover December 26.
And in the spirit of the Christmas season’s colors, try to save your green to stay in the red!