Festive Finances: Unwrapping Spending Trends And Strategies For Saving This Holiday Season

A Note From Patricia:

Hello and welcome to Forbes Advisor’s Weekly Brief, where each week we dive into the realities of consumer finance and empower you with knowledge to help make your financial journey easier.?

If you feel like you’re spending more this holiday season, you might be right. The National Retail Federation anticipates spending to increase this year to as much as $966.6 billion, a 3% to 4% increase from 2022. I did all of my holiday shopping online this year and took advantage of Cyber Monday sales to help alleviate some of the costs—and that seems to be the trend with many consumers this year, as e-commerce sales are expected to reach between $273.7 billion and $278.8 billion, according to the same study.?

This week, we’re here with saving strategies to help you navigate the festive shopping frenzy without burning a hole in your wallet.

We would love to hear your thoughts or experiences in the comments section below. Also: This is our last edition of 2023. We'll see you back here in the new year.

Sincerely,

Patricia Louis

Editor, Forbes Advisor

Tips To Avoid Overspending This Holiday Season

Holiday generosity often comes with a big price tag, one that many are struggling to afford this year. Fortunately, there are a few ways to spread the joy without spreading yourself too thin.

A recent National Retail Federation survey found that shoppers expect to spend around $875 on gifts, decorations, food and other seasonal commodities this winter, and according to a recent Morning Consult poll, more than one-third of Americans plan on going into debt to achieve this. Aside from credit cards, Americans are leaning on buy now, pay later services like Afterpay, Klarna and Affirm to finance their gift-giving, which can start the new year off on the wrong foot if you miss payments.

If you want to steer clear of debt before the new year, consider these gift-giving guidelines to frugally spread the holiday spirit:

• Make room in your gift-giving budget for shipping costs. Convenience almost always comes with a cost, so if you’re one of the millions of people planning on ordering your gifts online this year, make sure to plan ahead for the extra cost of shipping or in the worst case, the cost of a return. Some retailers, including H&M, now require customers to pay for a return shipping label to exchange or return an unwanted item due to an increase in returns, as well as shipping and logistics costs.?
• Make a list—and check it twice. It’s easy to get wrapped up in holiday discounts and sales, but remember to shop with intention to keep your budget in check, as one spending report by buy-now-pay-later company Affirm found that an alarming seven out of 10 consumers overspend during the holidays.
• Give gift cards. While the idea of a gift card may seem boring, they come with flexibility and freedom. Your gift recipient will be able to choose what they spend their gift card on, and you can avoid overspending by knowing exactly how much you’re putting down.
• Use cash-back credit cards and coupons to boost your savings. If you have a rewards credit card, make sure to check and activate your offers across every spending category. Additionally, make sure to do your research before you shop, as many retailers may have coupons or discounts offered that you can find in-person or online.

For more ideas on how to strategically save this holiday season, read more here.

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