10 Tips to Shop Smarter and Safer This Holiday Season

It is hard to believe, but the holidays are almost here! This year the COVID-19 pandemic will definitely change the way most families celebrate this year. Smaller family gatherings, and less exposure to in-store shopping will be key to staying safe this holiday season.

The holidays are a great time to spoil the ones you love with gifts, but it's also easy to get carried away and overspend. In fact, according to an annual survey released by the National Retail Federation, the average person will spend a little over $1000 this holiday season.

Do not make the mistake of overspending, which results in you starting off the new year in debt. Remember the holidays are supposed to be a good time, not a time for stress and debt.

My Tips to Shop Smarter and Save This Holiday Season 1. Make a Budget, Then Create Your List Before making that list of items you want to buy for your loved ones, set a budget for your spending. You can either set an overall spending limit for all your holiday gifts, or itemize it down to a specific amount per person on your list. It's also smart to keep this handy. Create a special holiday list on your smartphone so you have it with you all the time.

A quick way for you to spoil your budget is to forget to factor in all items related to the holidays. When creating a holiday budget you need to factor in all expenses that would go beyond your normal expenses:

Party Expenses. Is it your responsibility to bring the fruit-cake to the work holiday party this year? Be sure to include some budget for that. Don't Forget The Teachers And The Bus Driver. If you have kids in school like me, you know this can add up. Be sure to include some budget for the teachers and bus driver. They work hard, so it is a great way to show your appreciation. Wrapping Supplies. Hopefully you stocked up on wrapping supplies when they went on clearance after the holidays last year, but if not include that too. Decorations. Is the inflatable Santa in the front yard beyond patch repair? Be sure to include any new decorations you plan to purchase this year. Charitable Donations. Contribute to the less fortunate this year. Allocate a budget for that, or better yet donate your time for a good cause this holiday. This is especially true this year with so many individuals going through hard times during the pandemic. Most of all be practical with your budget. If you have a special someone that you want to buy an expensive gift, have a plan on how you can make the difference on other items. Think of items that you purchased last year, that may have not been required.

2. Track Your Spending with a Separate Holiday Account If you read my article on How to Align Goals with Multiple Savings Accounts, I stress the importance of allocating funds for specific purposes. While I do not specifically have a Christmas savings account, I do have a one-off account that I contribute money to throughout the year. I use it around the holidays to track spending. Your budget will be hard to stick to if you do not have a specific account that you can use to track your spending.

So while some people advocate a cash budget for holiday spending to avoid going over budget, I think that is crazy. First of all it's hard to order items online with cash, and second think of all the credit card cash back points you are going to lose. However, when using credit cards you have to be responsible.

Pay it down as you spend with Credit Cards to keep your balance down. A strategy I use for holiday shopping is to pay with whatever credit card will give me the most points for that specific item, but then immediately apply payment for the item from my one-off savings account. It's easy to do if you link your one-off account to all the credit cards you use.

By having a separate account for your holiday spending you can easily see where you stand on your budget, and not confuse it with your normal day to day spending.

3. Shop Online As stated before, with the Corona Virus Pandemic this year, shopping online is going to be a necessity. In addition to limiting your exposure to the Corona Virus, one of the great advantages of shopping online is that you can save time, gas and other unexpected expenditures. Think about it, a normal trip to the mall usually involves a lunch out, gas, and a few unexpected items that you did not plan on purchasing. Now I am not saying to be a homebody, and not get out at all, but try and do the majority of your shopping online. It definitely makes it easier to stick to your shopping list, when you are not being tempted by that great outfit in the display window that will look awesome on you.

4. Avoid Shipping Charges During the holiday season a lot of stores will offer free shipping, so be sure to factor that in the equation when comparing online prices. This is where services like Amazon Prime and Sam's Club Plus are really excellent. I have made my money back 10 times over on the savings on shipping with both of these services. But even if you are buying from a different retailer, chances are you can get free shipping or find a coupon code that offers it.

5. Use Cash Back Apps While I always recommend that you use cash back apps, I definitely stress using them during the holidays when you are trying to squeeze every bit you can out of your budget. If you are not using cash back apps, you are basically throwing money away. For instance an 8% cashback on a $100 outfit you are going to buy for that special someone from Banana Republic could net you $8 back.

There are several great cash back apps you can use, but my three top earners right now are Ebates, BeFrugal, and Ibotta. In addition to the cash back, Ebates and BeFrugal are excellent about finding additional coupons you can add to the purchase to save even more. Ibotta is great not only for online cash back deals, but also for holiday food shopping to earn cash back on groceries.

By combining cash back apps, credit cards points, and coupons, you can save enough to be able to afford an additional gift or two for your loved ones.

6. Start early If you have a hectic schedule, start your holiday shopping early. By starting early you have a better chance of getting good deals, and avoid having to pay expedited shipping for that last item on your list. Avoid the Christmas Eve shopping rush. The pressure to get gifts last minute will not only cause you stress but also hurt the overall budget.

7. Use Credit Card Points and Discounted Gift Cards The holiday season is an excellent time to cash in on all the credit card reward points you have been accumulating all year. One of my favorite strategies is to try and stretch out those points as much as possible. Some credit card companies like Discover allow you to trade in your credit card reward points for discounted gift cards.

So rather than trade in your points dollar for dollar for cash, you may be able to score a discount on a gift card. For instance, Discover Rewards offers you a $50 Bed Bath & Beyond Gift Card for $40 worth of your bonus cash that you earned. Use this strategy if your credit card company offers something similar. Use these discounted gift cards towards purchases you were going to do anyway. Plus, gift cards make excellent gifts for teachers, the mail man, etc.

If you are not a big credit card user you can still earn free gift cards. There are many survey and cash back apps that will allow you trade points for free gift cards.

8. Do a Gift Exchange Instead of Buying Gifts for Everyone If you have an extended family or a big group of friends, buying gifts for everyone is a quick way to go over budget. Secret Santa is the way to go this holiday season. Each member of the group buys a single gift, and a reasonable spending limit is set for all those involved. This works out well since then all gifts will be of similar value and no one will feel short-changed. This will not only save you time, but allow you to focus on that perfect gift for your Mother-In-Law who is never judgmental.

If you celebrate the holidays with multiple families, another strategy is to buy family gifts rather than for individuals of each family. Some good examples of gifts the whole family will enjoy are board games, restaurant vouchers, or outdoor games like Cornhole.

9. Wrap Your Own Gifts Now even if you are all thumbs when it comes to gift wrapping gifts, do not pay extra money to have your gifts wrapped. I am all for having really nice looking wrapped gifts. In reality the wrapping is going to end up getting torn, ripped and tossed, so save your money and wrap the gifts yourself.

10. Buy Your Holiday Related Items After Christmas The best time to buy that new Christmas tree or other holiday decorations is after Christmas in early January. You can score some good deals on holiday items that are drastically marked down after Christmas. Plus, this is a great time to purchase wrapping paper and Christmas Cards, as these too may be marked down as much as 80%. You will have a head start on next year, and save a bunch!

Final Thoughts The holidays are a great time to spend with friends and family. Take the time to remember the real reason for celebrating. Do not get caught up in the marketing hype that will have you opening up your wallet instead of your heart this season. In the long run the quality time you spend with your friends and family is what they will cherish in the years to come.