6 Tips to Spend Smarter This Holiday Season (and Avoid Debt)


Ever since the pandemic hit in 2020, the holidays haven’t felt the same way. However black friday is considered the official kickoff of the holiday shopping season, many of us are getting a head start, due to shipping delays, out-of-stock items, and rising prices. More than 30% of people started checking off items on their lists in September and early October, according to a CNET Holiday Survey.

Early data shows that this year’s gift buying trends are driven by the hope of finding a bargain. And no wonder. Inflation, rising interest rates, stock market volatility and fears of layoffs are driving us to try to cut back where we can. A third of shoppers worry that if they wait too long to buy gifts, prices will go up.

Whether you’re buying your kid a new game console, helping your partner update their wardrobe, or picking up gifts for co-workers, here are some tips to help you spend within your means and keep the cost down. risks of entering the new year with a financial hangover.

Plan ahead

Supply chain clogs aren’t over, and 38% of survey respondents are worried their gift items will be out of stock this year, while 26% are worried about shipping delays. That’s why, even if they haven’t started shopping yet, the majority of holiday shoppers are actively looking for gifts. Planning ahead and comparison shopping are the best ways to avoid stress and be kinder to your wallet.

chart showing why Americans are buying early

Robert Rodriguez/CNET

If you plan to wait until the last minute to buy gifts, know that this is a test of both your time and your budget. When we put off buying gifts until the last hour, we often have less patience for bargain hunting, items become more expensive, and we tend to overspend. If you’re in a rush to buy a gift, don’t overdo it. Just opt ​​for a simple gift card – a practical gift favored by many.

Use credit wisely

More than half of shoppers surveyed plan to pay with a credit card this holiday season. With the Federal Reserve interest rates rising, credit card APRs are also rising. If you’re paying with plastic, use the card with the lowest interest rate, just in case you need to carry over a balance into the new year. And always create a repayment plan to stick to after the holidays, so you can stay on track financially without racking up debt.


Robert Rodriguez/CNET

If you apply for a new credit card, a 0% launch APR can be a good choice if you need more time to cover your balance. Or try a rewards card, which can help you earn cash or points for every dollar you spend. If you’re already an avid credit card user, check to see if you’ve accrued points or cash rewards that you can redeem for holiday purchases.

If you plan to use Buy now, pay later to buy your gifts this year, be careful. Plans such as Affirm, Afterpay and Klarna have become increasingly popular as they offer an interest-free way to pay in installments (usually four). But there are pitfalls, especially if you pay late. If you think you won’t be able to cover the cost of your donation on time, think twice before using an BNPL plan. If you do, be sure to read the terms and conditions.

Set a budget and pay cash or debit card

The majority of shoppers surveyed (74%) say they expect to spend the same or less than last year. If you’re worried about overspending, make a strict spending plan with a list of gifts you plan to buy, especially if you’re trying to take advantage of certain Black Friday and other holiday deals. You can create a budget using Excel or Google Sheets, or use a budgeting app to find out how much you can afford this holiday season.

graph showing more Americans planning to spend the same as last year

Robert Rodriguez/CNET

And if you’re still worried about breaking your budget, do what about half of survey respondents do: shop with cash. A 2021 MIT study found that parting with physical dollars at checkout rather than using your credit card causes a higher degree of pain. This is a good thing. Credit cards have an intangible, “deal with it later” quality, but when we use cash, we only pay for what we have in our wallet, and that can improve our chances of stick to a budget.

While debit cards are also technically similar to cash and can improve your chances of spending less, remember that they lack the purchase and theft protections that credit cards typically offer. .

Set guidelines with your friends and family

If you can’t afford to make it through this holiday season, tell your friends and family. There’s often pressure to get the best gifts for your loved ones, and sometimes we feel like we have to match what others are spending. But other people on your list are likely also facing financial pressures. We recommend reviewing your budget and deciding what level of gifts fits your financial plan.

If you don’t want to ignore freebies altogether, one way to ease the burden is to discuss setting a price limit or spending cap for freebies. Another option is to exchange homemade gifts or offer services, such as babysitting or cleaning.

You can also offer a White Elephant or Secret Santa gift exchange. This type of exchange randomly assigns you the purchase of a gift for a single person in your group, and only one person will be responsible for buying something for you. Combine that with a price limit, and you’ll end up spending a lot less this holiday season.

Sign up for coupons and offers

An easy way to find deals this holiday season is to use internet browser extensions that scour the web for online coupons and rewards, then apply discounts at checkout.

Screenshot of CNET shopping price comparison

To save money and compare gift prices, check out CNET Shopping, a free browser extension that offers two unique features: price comparison and coupons. CNET Shopping automatically searches thousands of retailers to find the lowest price on a specific item and applies coupons to your online cart before purchase. This means you won’t have to search the web for discount codes that often don’t work, and you’ll see right away if there’s a lower price for the item you’re looking for.

Use savings apps to save money

While savings and investing apps won’t help you avoid debt this holiday shopping season, they can give you a head start on next year by setting aside small amounts of cash. money with every purchase you make.

For instance, tassels is a micro-investment platform which invests your remaining change in an Acorns account for just $1 per month. Figure is another savings app that tracks your spending habits and automatically saves small amounts of your money ($5 to $20) in an FDIC-insured savings account. Since its launch in 2015, the app says it has saved users more than $7 billion. You can try it for free for 6 months, then it’s $5 a month.


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