The shopping frenzy of the year is drawing near, and you’ve made peace with the fact that you will be spending, one way or another.
We here at Credit Karma believe that you savvy LearnVesters deserve to enjoy the pleasures of shopping and the joy of the holiday season. But we also stick to our mission of smart credit management and healthy finances. If you’re going to put this much effort into shopping ‘til you drop, you owe it yourself to do good things for your financial well-being too.
Here’s our own special Black Friday survival guide. We’re counting down ways to enjoy the shopping season without crippling your financial health, while keeping your credit afloat and avoiding holiday debt hangover after the festivities are over.
5. Keep A Serious Budget, And Stick To It
Buying gifts for loved ones is a cherished tradition, but it must have serious and rigid boundaries. Set a total budget for gift-giving this year, write down every single gift recipient, and set strict gift-giving limits. If you spend $30 more on Dad than you planned, cut down on coworker and neighbor gifts. The most crucial step is to keep track of purchases to monitor whether you’re sticking to the game plan. This way, you can enjoy yourself and not regret it as soon as you see your credit card bills.
4. Plan to Be Spontaneous—Have A Budget For Impulses
Let’s not kid ourselves here—buying something off our shopping list is bound to happen, so here’s the follow-up to #5. Plan to be spontaneous and set a separate budget for impulse buys and unplanned extravagance. Don’t cheat and make this a big hole to spend on yourself; think of this as an emergency fund in case you forget a relative or have to pay extra holiday travel fees. Working this into your budget will give you a more realistic number of what you’ll be spending in the next few weeks. If you have money left over in this budget, throw it into our #1 tip on this list.
3. Group Giving Is The New Gift-Giving Do
Before you hit the stores on Friday, reduce your gift list by calling friends and family to collaborate or set up Secret Santa. Teaming up with people to get gifts, like pooling up money with your siblings to get a gift for Mom and Dad, is a great way to cut back and give your recipient one excellent gift rather than a bunch of knickknacks. Secret Santa is also a smart idea for friends or the office. Check out cool sites like Elfster to help organize Secret Santa online. Instead of getting a gift for everyone in your circle, you can focus your sights on one person.
2. Forget Stuff—Give Experiences
Deal-of-the-day and social coupon-buying sites, like Groupon and Living Social, are a source for cool gifts at big discounts. Instead of gifting things like snowboard gear or a makeup kit, how about a related experience they can appreciate, like a trip to Tahoe or day at the spa? Plus, since many sites are localized, it’s a cool way for recipients to check out their city. Your loved ones will remember a fun-filled experience long after using their “stuff.”
1. Gift Yourself
No, we don’t mean buying that stylish trench coat you’ve been coveting all fall. To fund our shopping sprees and gift-giving, most of us dip into our savings, ring everything up on credit, or give up a habit like eating out or salon visits. But, we must maintain our savings habits even through this spending frenzy. Start a holiday piggybank and give back to your savings every time you spend. We suggest that for every $50 you spend, contribute $10 back to your holiday piggybank, or even $10 for every $100, whatever you can do. Every time you get free-shipping or a refund, put that into your holiday piggybank too. At the end of the holiday shopping season, you have something to get you back on track to building your savings.
How To Thrive In The Holidays, Not Just Survive
Last disclaimer before the big shopping day: Keep in mind the purpose of the holidays—friends, family, good eating, and the warmth of the holiday spirit. Luxury gifts and big bargains just don’t make the cut on this list. So really, the best piece of advice to put your finances in perspective is to simply keep in mind the most important reason to celebrate the holidays (and that doesn’t come with a price tag).
Tell us in the comments: Do you set up a gift budget before shopping?