That’s why it’s important to have a plan that helps you avoid common holiday shopping errors like overspending and waiting until the last second. Learn what some of those mistakes are and how you can avoid them.
No Holiday Budget
Before you buy a single present during the holiday season, create a budget that provides boundaries for how much you want to spend. Here are some steps to take:
Overusing Credit
Keep in mind that people tend to overspend when they use credit cards compared to cash. As a matter of fact, according to a study conducted by researchers at the MIT Sloan School of Management, not only are consumers more likely to buy something at a higher price with cards, “they also are likely to give larger tips and make more impulse buys.” If you end up spending more than you can afford, it could take you months to pay off your balance. To combat the tendency to overspend with credit cards, consider using cash or a debit card to buy gifts.
Buying To Impress
It’s tempting when you have some money to spend to go out and buy extravagant gifts for everyone on your list, whether they’re your parents, a significant other, or a close friend. But try not to go overboard just for the sake of trying to impress the recipient. Most people in your close circles would likely prefer a thoughtful gift rather than one that’s simply carrying a hefty price tag.
Forgetting To Buy Someone a Gift
One common holiday shopping mistake is forgetting to buy a gift for someone important. This is why shopping with a list is critical because, for one, you do not want to leave out certain people when it comes to giving gifts. Here are some key steps to help you remember:
Forgetting To Compare Prices
It can be easy to forget to do price comparisons for gifts. Instead, you may set aside one day to shop at local malls and stores. Instead of stressing yourself out by running from store to store trying to find the perfect gifts during the holiday season, try comparison shopping online first. Even if you decide that you’d still rather make the trek to the stores, comparing deals (like Black Friday sales) and prices online can give you a clearer idea of how much an item should cost you once you see it in a store.
Waiting Until the Last Minute
Waiting until the last minute to do your holiday shopping can inevitably backfire. As you rush to try to find a decent present for your family and friends in nearly empty aisles of a store, you may wind up spending too much on an item that feels less thoughtful or sincere because you have no other options. Avoid this holiday shopping mistake by shopping ahead—perhaps even before the holiday season begins. If you know what you want to get everyone ahead of time—say, in September or October—you have months to keep an eye on prices.
Forgetting Your Year-Round Budget
A significant financial mistake that people can make during the holidays is forgetting to spread the cost of holiday shopping over the entire year. Setting aside money each month to cover the cost of the next holiday season can help soften the financial blow. Consider putting the money into a holiday savings account or earmarking the money in your normal savings account. This allows you to purchase your holiday gifts without overspending or worrying about how much you have to spend on them when the time comes.
