The holiday season is the time of year when personal expenses are likely to increase. Whether it may be travel expenses, events, or retail spending. Start preping your holiday savings strategies now. The 2020 holiday shopping season spend is expected to be substantial, but likely less than 2019’s Brick-and-mortar retail and e-commerce spending of $1.007 trillion. Today, holiday shoppers spend less time looking for gifts, but spend more money, especially when shopping online. On average, shoppers in 2019 distributed their holiday spend among the following:
Without holiday savings strategies and spending plans in place, one can easily find themselves overspending. Here are a few suggestions to help you plan and execute your strategy:
Determine if you are in the position to spend this holiday season or not. If you have experienced financial hardships this past year, spending less this holiday may be a wise decision and work toward replenishing your emergency fund instead.
Early-bird shoppers spend more on average. Before Thanksgiving, consumers who do holiday shopping spend nearly $400 more than their later counterparts (Deloitte).
Watch for items you plan to purchase anyway when they are discounted at any time during the year. Prices often fluctuate, and monitoring for the optimal time to buy may save you.
Determine how much you want to spend before the purchase. Suppose the price is not within your budget, delay purchasing it. Secondly, make a shopping list and stick to it!
Open an account specifically for holiday spending and contribute to it each month. Over the year, use this account for gifts, travel, and event purchases. When you can see the money accumulate and decrease over time, you know where it goes.
“Flashing cash” really can make a difference in what you pay. Because credit card processing fees can range from 2% to 5% of each sale, anything the retailer can do to cut costs and keep more money in their pocket can save you. For higher-priced items, ask the retailer if they offer a cash discount and if they are willing to accept cash during COVID-19. Secondly, using a credit card can accumulate interest charges if you carry balances longer than one month, making your purchases more expensive.
Enjoy the holidays with your savings and holiday savings strategies in place to help ensure a positive financial outcome long after the holiday ends.
First Fruits Asset Management has been in the financial services profession since 2007. We work together to create a personalized financial plan. We then review and revise the plan as situations and/or goals change over time. Contact us today to learn more about how we can build a partnership with you today.