As fun as shopping during the holidays can be, shoppers tend to make certain mistakes when buying gifts. Those mistakes can cost time and money.
That’s why it’s important to have a plan that helps you avoid common holiday shopping errors like overspending and waiting until the last second. Learn what some of those mistakes are and how you can avoid them.
- Forgetting to make a holiday budget and failing to plan for holiday gifts in your year-round budget can be costly and stressful.
- Credit cards can cause you to overspend even if you’ve set a budget.
- It can be easy to opt for convenience and speed when gift shopping, but don’t forget to compare prices before you buy.
- Give yourself enough time to plan out how and where you want to buy gifts. This will help you avoid scrambling for gifts at the last minute.
No Holiday Budget
Before you buy a single present during the holiday season, create a budget that provides boundaries for how much you want to spend. Here are some steps to take:
- Make a list of which items you want or need to buy and how much you can specifically afford for gifts.
- Determine your spending budget beyond gifts. Many people forget to add holiday cards, office parties, white elephant gifts, and travel expenses. If you are planning a party, add it to your list as well.
- Once you add up all your projected costs, plus the estimated cost for gifts, then you’ll have your holiday spending budget. 1
It’s important to stick to your holiday budget. When you have used up all of your holiday money, it’s time to stop spending.
Keep in mind that people tend to overspend when they use credit cards compared to cash. As a matter of fact, according to a study conducted by researchers at the MIT Sloan School of Management, not only are consumers more likely to buy something at a higher price with cards, “they also are likely to give larger tips and make more impulse buys.” If you end up spending more than you can afford, it could take you months to pay off your balance.2
To combat the tendency to overspend with credit cards, consider using cash or a debit card to buy gifts.1
Buying To Impress
It’s tempting when you have some money to spend to go out and buy extravagant gifts for everyone on your list, whether they’re your parents, a significant other, or a close friend. But try not to go overboard just for the sake of trying to impress the recipient. Most people in your close circles would likely prefer a thoughtful gift rather than one that’s simply carrying a hefty price tag.
A 2018 study from Groupon found that 53% of people can’t remember more than half of their Christmas gifts from the year before.3
Forgetting To Buy Someone a Gift
One common holiday shopping mistake is forgetting to buy a gift for someone important. This is why shopping with a list is critical because, for one, you do not want to leave out certain people when it comes to giving gifts. Here are some key steps to help you remember:
- When you make your list, write down all the important people you’d like to give gifts to and ideas of what to give them.
- When you shop, whether online or at the stores, take your list with you and consult it as you go.
- Cross off each person as you find the perfect gift so you don’t overbuy for one person and forget another.
Forgetting To Compare Prices
It can be easy to forget to do price comparisons for gifts. Instead, you may set aside one day to shop at local malls and stores.
Instead of stressing yourself out by running from store to store trying to find the perfect gifts during the holiday season, try comparison shopping online first.
Even if you decide that you’d still rather make the trek to the stores, comparing deals (like Black Friday sales) and prices online can give you a clearer idea of how much an item should cost you once you see it in a store.
If you enjoy the experience of going to stores during the holiday season but like the convenience of comparing prices online, buy your gifts on store websites and select the store pick-up option.
Waiting Until the Last Minute
Waiting until the last minute to do your holiday shopping can inevitably backfire. As you rush to try to find a decent present for your family and friends in nearly empty aisles of a store, you may wind up spending too much on an item that feels less thoughtful or sincere because you have no other options.
Avoid this holiday shopping mistake by shopping ahead—perhaps even before the holiday season begins. If you know what you want to get everyone ahead of time—say, in September or October—you have months to keep an eye on prices.
Forgetting Your Year-Round Budget
A significant financial mistake that people can make during the holidays is forgetting to spread the cost of holiday shopping over the entire year. Setting aside money each month to cover the cost of the next holiday season can help soften the financial blow.
Consider putting the money into a holiday savings account or earmarking the money in your normal savings account. This allows you to purchase your holiday gifts without overspending or worrying about how much you have to spend on them when the time comes.
Frequently Asked Questions (FAQs)
How do I stop overspending during the holidays?
One of the best ways to avoid the mistake of overspending is to set a budget. Write out the names of the people you want to buy gifts for. Think about what you want to buy them, then write down how much their gift will cost. This will help give you a sense of control over your spending?
How can I save money on holiday shopping?
Plan ahead. Identify the gifts you want to buy people, then do price comparisons online. Keep an eye on Black Friday sales and other promotions. Also, sign up for retailers’ mailing lists and first-time customer offers, both of which could provide discount codes for future purchases.