Image source: Getty Images
The holidays tend to be an expensive time of the year. And this year, they might cost the average consumer even more due to inflation.
In a recent report by Deloitte, consumers say they plan to spend an average of $1,455 on the holidays this year. And of that, $507 is earmarked for gift-buying purposes.
Discover: This credit card has a rare $300 welcome bonus
More: These 0% intro APR credit cards made our best-of list
Alert: highest cash back card we’ve seen now has 0% intro APR for 15 months
Now on the one hand, $507 may not seem like a large amount of money for gifts, especially if your personal list tends to be extensive. But if you’re in a financial crunch — say, your rent has gone up and your savings are largely gone as a result — then you’ll need to be careful with how much you spend.
Overspending on gifts could be just the thing that drives you deep into credit card debt. And that’s a fate you should do everything you can to avoid.
Don’t let gift-giving push you into debt
Many people rack up holiday debt because they want to bring joy to other people in the forms of terrific gifts. But while that’s a nice thing to want to do, harming your own finances is not a nice thing to do to yourself. And so rather than risk debt due to gift-related spending, take steps to keep your costs to a minimum.
First, start your holiday shopping as early as you can. That way, you’ll have more of an opportunity to compare prices and scope out different sales events.
Next, make a point to keep receipts for the gift items you buy, and continue to track their prices even once those items are tucked away in your closet, basement, or garage. Many retailers offer price matching during the holidays (as well as year-round).
So, let’s say you buy something on sale for $39.99 and you spot it even further discounted to $29.99 a week later. That retailer might be willing to refund you the difference without a hassle provided you have your receipt as proof of purchase.
Keep in mind that some retailers will even match lower prices offered by competitors. So if you buy a given item at Target and Walmart ends up selling it at a lower price, Target might step up and match that better offer.
Finally, don’t assume that every gift you give out has to be purchased in a store. If you’re crafty or know your way around an oven, consider homemade gifts like hand-knitted scarves and hats or batches of cookies instead. Your loved ones might appreciate those gifts from the heart, and homemade gifts might cost you a fraction of what you’d pay at a local retailer.
Keep your spending in check
Whether you’re planning to spend $507 on holiday gifts this year or a very different total, your goal should be to limit your spending to a number you can comfortably afford. And if you employ the right strategy, you can make the most of a more limited budget — and avoid closing out the holiday season with a pile of debt to pay off.
Alert: highest cash back card we’ve seen now has 0% intro APR until 2024
If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
Read our free review
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.