Making Cents Blog

10 Smart Ways to Budget for Holiday Gifts

For many of us, the holiday season is full of exuberance and celebration — but it can also be financially stressful. Buying gifts, hosting parties and traveling to see family and friends can add up quickly.

The average holiday shopper will spend $738 just on gifts, greeting cards, décor and other holiday-related items, according to the National Retail Federation.

But if you plan a savvy shopping strategy and use some creative cost-cutting measures, the holidays can be much more enjoyable, relaxing — and affordable. Here are some tips to help make your holidays merry and bright:

1. Examine your discretionary income. If your income has changed recently, or if you are expecting a year-end bonus, closely review your budget to see exactly how much you can afford. In addition, contributing each month to a holiday savings account, such as our interest-bearing Holiday Club, can help offset seasonal expenses.

2. Use a credit card that rewards you. Our Alliance Visa Rewards Credit Card offers up to $600 cash back per year – that’s potentially a lot of extra “jingle” in your pocket for the New Year. Since Visa is accepted at millions of locations, the ways you can earn cash rewards while holiday shopping for your loved ones are virtually endless.

3. Analyze last year’s gift buying habits. Did you end up buying presents at the last minute? Could you have saved money on entertaining and travel by planning ahead? Examine your credit-card statements and receipts to figure out your average holiday expenses for previous years and work that amount – or less – into this year’s budget.

4. Use the Web to comparison shop. If you plan on purchasing big-ticket items, do some Web sleuthing to learn more about features, benefits, prices and any available rebates. Look for coupon codes and figure out which sites offer free shipping and other incentives that will keep costs down.

5. Use your smartphone for better gift buying. Instead of driving to the store and fighting crowds, shop with apps like Pounce, which lets users buy items just by taking a photo of the product image in the advertising circulars of major retailers such as Macy’s, Target and Toys R Us. Other free apps include Hukkster and Shopkick.

6. Develop a Black Friday/Cyber Monday shopping strategy. Take advantage of great Black Friday/Cyber Monday sales by assembling a wish list, shopping the circulars and mapping out a buying plan. Many retailers run Black Friday sales online as well as offline, so buying gifts on the Web, both on Black Friday and on Cyber Monday, may be an even better option than hitting the mall.

7. Get crafty. Some of the most meaningful gifts do not cost a lot of money. If you’re the hands-on, creative type, give handmade presents and baked goods instead of store-bought items. You can also save by buying ingredients or craft supplies in bulk.

8. Plan in advance to make air travel hassle-free: The day before you fly, check in online, print boarding passes, and pay for checked luggage. Airport parking lots are expensive and often full during the holidays, so reserve an off-airport parking site. The day you fly, use travel apps such as FlightAware to track the real-time status and location of your flight. And ship bulky gifts ahead instead of dragging them on the plane – it may be cheaper than flying with them, anyway.

9. Use free gift-wrapping services: During the holidays, some retailers offer free gift-wrapping if you purchase from them. This service can save you not just money, but the time and hassle of wrapping presents.

10. Remember what’s important. Last but not least, if your holiday expense list is longer than your budget, scale back and remember: What makes a great celebration is not store-bought presents, elaborate decorations or gourmet food, but re-connecting with loved ones.


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