By Hon. Kimberly Yee, Treasurer of Arizona
As the holiday season approaches, the spending begins. While this is a season for giving, it doesn’t have to be a time to get into debt. While higher costs and inflation weigh heavily this year, the average shopper can be smart about stretching their dollar farther than in previous years. Planning ahead and budgeting for holiday spending is more important than ever. With a simple budget and financial plan, you can show generosity with gift-giving and avoid entering the new year with debt. Here are five practical tips below on how you and your family can shop smart this holiday season.
1. Plan ahead and budget for everything.
Before you begin any holiday shopping, lay out a simple budget and note how much you can spend on gifts and holiday expenditures, including travel. Once you figure out how much you can afford to spend, make a list of everyone you plan on getting gifts for including your family, friends, teachers and co-workers. Don’t forget to include costs such as shipping and packaging. Also take into consideration other holiday expenses such as decorations, food for gatherings, greeting cards, holiday apparel and charitable contributions. By creating a spending plan and sticking to it, you (and your wallet) will feel confident going into the holiday season.
2. Use cash when shopping.
If you are someone who likes to go to the mall to shop for your loved one’s gifts, consider taking out the amount of cash you have budgeted for all of your gifts. By leaving your credit card at home, you’ll need to stay within your budget to get all of the gifts you need. Using cash while shopping, in general, can prevent overspending as you cab physically watch the money disappear. Auto-filling credit card information when checking out of your cart online or quickly tapping your credit card at the store register can lead to overspending more than you have in the bank.
3. Organize a holiday gift exchange.
If you have a large family or friend group, planning a holiday gift exchange with a price limit can help alleviate overspending this holiday season. By only purchasing one gift, your entire group will save money and still have an exciting gift-giving experience. At the Arizona State Treasurer’s Office, my staff does an annual white elephant exchange with a $20 limit. This allows our staff members to be free from having to worry about buying gifts for each of their co-workers, while providing a group gift swapping experience that makes for a great time.
4. Don’t wait until the last minute.
Take advantage of the Black Friday and Cyber Monday deals in November. If you wait until the last minute to do your holiday shopping, you will most likely have to pay for expedited shipping and get stuck buying pricier items. Take advantage of this time to book any future airfare if your budget allows for it. It is also early enough into the season that you may consider making homemade presents for your loved ones. Consider a photo album for grandparents or bake Christmas cookies for your children’s teachers. They may be more grateful for gifts with a personal touch as opposed to something they can buy at the store.
5. Give the Gift of Savings to Someone Else for Future Education
A simple, no stress gift that can be given to a family member or loved one is a gift that can help them start a savings plan for their future education. Consider giving the young person in your life a meaningful gift of saving for their future education by making a tax-deductible contribution to an AZ529 Education Savings Plan. Contributions of any amount from parents, grandparents, relatives and family friends provide cherished, yet simple gifts with long-term meaning to help a young person save for their future education and achieve their future dreams.
The holiday shopping season can be a fun time to pick out the perfect gifts for your family and friends. This is also the time when checking off your holiday list can really hit your pocketbook. With a little planning and budgeting, you can enjoy your holiday season and go into the new year with financial freedom.
