The Best Holiday Deal for Your Budget in 2022
Michael Baum, CFP® RICP®
Vice President & Associate Financial Advisor
The holiday shopping season is upon us. Unfortunately, the highest inflation we’ve seen in 40 years is also part of the holiday season this year, driving prices up for everything from gifts to decorations, holiday dinner and more.
If current economic conditions are making you take a second look at your capacity for spending this holiday season (and they probably should), use this guide on how to help stretch your dollar a little further without breaking the bank – it’ll be the best holiday deal you get this year!
Revisit (or create) your budget.
You should already have a household budget in place as part of your ongoing financial planning and strategy, but the holiday months likely do require some adjustments to take into account the additional spending. Ideally, you’ve already made a plan to allocate some of your monthly expendable income toward your holiday shopping in the months leading up to the holidays.
If you don’t already have a budget and have now run out of time to plan in advance, start by writing out a breakdown of your regularly occurring income and expenses to see what you have left over for expendable income. Then use the rest of the tips below to help stay within the budget you now know you have.
Pay with cash, or plan credit purchases carefully.
While inflation is making it more difficult to afford necessary goods and services, Americans are increasingly relying on credit cards. But interest rates are also going up. So, unless you pay off your balance in full, you’ll ultimately be spending way more on your holiday gifts than the sticker price. To keep your spending in check, and to avoid tacking interest payments on to the cost of your purchases, pay with cash—or be sure you can pay off your entire credit card balance before interest is applied.
Shop sales (and know where to find them).
During the Covid-19 pandemic, many industries were affected by delays or cancellations in product deliveries from overseas. Now that production and transport have mostly resumed, stores have been saddled with excess inventory that they need to clear out in order to make room for new products. The result? Sharp price reductions. Keep an eye out for sales, coupon codes, and free shipping perks before making a purchase, especially at big box stores.
Overstocked products will also find their way to off-price retailers as larger stores sell off their excess and delayed shipments that arrived late. You’ll likely see products and brand names—and possibly new discounts—in these types of stores that you’ve never encountered there before. If you’re looking for a specific gift, compare that item at various retailers to make sure you’re getting the best deal available.
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Leading from the above, while most people are focusing on pumpkin spice and sweater season, stores are hoping to get rid of whatever swimsuits, beach towels, and other summer season items they still have in stock. If you don’t mind giving a taste of summer in December (and who wouldn’t mind receiving that?), you could score significant deals. Remember this tip at the end of winter, too, when prices of cold-weather attire are similarly slashed.
Holiday products may be causing stores the same issues as seasonal products. If holiday inventory was delayed last year, stores had to hold these items for months until those holidays came around again this year. So, there’s a good chance they might be on sale or show up at an off-price retailer.
Support small businesses.
If you have a bit of wiggle room in your budget, purchasing gifts from a small business just might help keep that company in the black during a tough year. Inflation has boosted operational and material costs, causing many small businesses to raise their prices, or cut their staff. Buying small helps stimulate the local economy and keep jobs in your community.
Give yourself the gift of financial security.
While the state of the economy might not be ideal for holiday gifting, be assured that there are ways to use current economic conditions to your advantage—and spread some holiday cheer. But as in the case of our first tip, budgeting, those advantages depend on early planning and an ongoing strategy.
Our team at Weiss, Hale & Zahansky Strategic Wealth Advisors can help you build and manage a personalized financial plan to help you reach your goals, both in the near-term and long-term. Contact us to get started.
Presented by Vice President, Associate Financial Advisor, Michael Baum, CFP® RICP®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259, 860.928.2341. http://www.whzwealth.com