The Holiday shopping season is upon us, and stores are already offering discounts and sales to lure in shoppers. Thanksgiving is right around the corner and we all know what comes after that, the most busiest Holiday shopping season. First, we have Black Friday with retailers promising big discounts, followed by cyber Monday, and “sales” continuing until Christmas Eve for those last minute shoppers and well into the New Year. Also, don’t forget about the after Holiday clearance sales. There’s just always a reason to shop and spend money this time of year, and retailers are counting on you opening up your wallets, spending big, so they can increase their revenue and make big profits to make up for lost revenues caused by the pandemic. Now that more people are vaccinated, retailers are expecting things to return somewhat normal, and some shoppers are excited to get back into the malls and stores and return to a more traditional Holiday shopping experience.
The National Retail Federation (NRF) predicts that 2021 holiday sales will grow between 8.5 to 10.5 percent from 2020, with overall sales between $843.4 billion to $859 billion. NRF also predicts revenues from online sales to increase between 11 to 15 percent for a total of $218.3 billion to $226.2 billion. That is a lot of money and some of that will be my money and your money, but we don't have to get out of control with our spending and have regrets later.
If you are committed to financial wellness and have been doing good so far, now is the most tempting time to overspend which can derail you from meeting your financial goals. It's easy to get into the excitement of the Holiday shopping season, trying to snag a good deal, and forgetting about your budget; however, this will only lead to stress later on when you get those credit card bills. Below, I am sharing five (5) tips to help you stay committed to a budget so you can enter the New Year stress free and hopefully debt free or with manageable debt that won't keep you up at night:
Create a Holiday shopping budget. Know how much discretionary money you have to shop for gifts and if you plan to charge anything to a credit card, plan ahead what the maximum dollar amount you want to charge on your card, ideally it should be an amount that you can afford to pay back quickly so you don’t end up paying an excessive amount on interest.
Make a shopping list of all the people you plan to shop for and have a general idea how much you want to spend on each gift. For example, you can have an open conversation with friends and family about sticking to a gift budget of under a certain amount, that way everyone can manage their expectations.
Know your trigger and avoid excessive spending traps. You should know whether you are triggered to spend more or able to stay on budget more easily by shopping online or in stores. For example, some people are addicted to shopping online and get great satisfaction adding to cart and if that's you stay away from late night browsing and put down the credit card. On the contrary, for others it's easier shopping for the specific item you need online because going to a physical store might mean buying the whole store or leaving with way more than you intended to buy. Whichever one will help you spend less and stay on budget is the obvious choice.
If you are a creative and artsy person, you can make personalized gifts rather than shopping for gifts. Just make sure the time commitment and amount spent on supplies does not defeat the purpose and overall goal which is to stay on budget.
Last but not least shop with purpose. Give gifts that are useful and practical, and remember sometimes it's not about the amount you spend but the thought process that went behind the gift. Also, make an effort to support small businesses, Black-owned businesses and shop with companies that aligns with your values (e.g. companies that treats their employees well, care about the planet and do good and give back to their community etc.).