While the excitement of the holidays and the gift-giving season can be a magical time for children, adults face a plethora of additional expenses during the last two months of the year. Whether its gifts, food, decorations, the perfect outfit for that holiday party, or airfare to visit family – there’s no denying the holidays can put a dent in the wallet.
According to a 2016 Mid-Year Consumer Survey, conducted by the Ohio Credit Union League, 22 percent of respondents spend more than $1,000 on holiday expenses, 35 percent between $500 and $1,000, and 28 percent between $300 and $500. During last year’s holiday season, the average American spent $734 on gifts, $120 on food, $78 on decorations, and $85 on flowers and cards, according to AOL Mass Media.
Projections for this holiday shopping season are in and Deloitte expects retail holiday sales to top $1 trillion between the months of November and January this year. With disposable personal income climbing and consumer confidence staying elevated across the U.S., the holiday shopping season could bring healthier sales for retailers to cap off a tumultuous year. Deloitte said it expects retailers to see holiday sales growth of as much as 4.5 percent.
Traveling can be another major expense throughout November and December. AAA reports that due to low gas prices, 41.9 million people took a road trip last Thanksgiving, and another 36.1 million journeyed by plane. In Ohio, 21 percent of survey respondents said they plan to trek more than 100 miles this holiday season.
With so many additional expenses in a month, it’s surprising how few people set money aside throughout the year for year-end holiday expenses. With no additional income during the holidays, cutting costs may be necessary to stay financially afloat during November and December.
Tips to cut costs for the holidays:
- Credit card rewards: Many credit cards offer reward points for using their card. These points can be used like cash to purchase merchandise such as gift cards or electronics. Try cashing in your points to cover the cost of someone’s gift. If you don’t have a rewards credit card, check with a credit union in your area about offerings.
- Bargain shop: Check online sites such as slickdeals.net, Woot!, and Brad’sDeals to search for the best bargains. If you haven’t signed up for Amazon Prime yet, it may be worth it just for the free shipping, especially if you do a lot of online shopping for the holidays.
- Shop early: The optimal time for holiday shopping is between Oct. 1 and Dec. 1. Spending a small amount on gifts each week before the holiday rush is a good way to avoid putting a large chunk of debt on a credit card at one time. Shopping early also relieves the feeling of rushed, last-minute shopping, which can result in purchasing gifts regardless of price.
Holiday Club Account: Although not applicable for this year, consider enrolling in a credit union Holiday Club account to start saving for next year’s holiday expenses. It’s basically a savings account that you stash money in all year, and have limited access to until the holiday season rolls around.
To learn more about how a credit union can help you save for the holidays, visit www.aSmarterChoice.org and find a credit union in your area.