(BPT) - By Jason Gaughan, Head of Consumer Credit Card Products at Bank of America
This year, shoppers are looking for ways to stretch their dollars throughout the holiday season so they can start 2023 on strong financial footing. In fact, nearly 1 in 2 Americans (45%) intend to spend less this holiday season than last year. And, for 68% of those with reduced budgets, they attribute their financial modesty to inflation and rising everyday prices. Despite the current economic environment, holiday shopping doesn't need to be stressful - if you do it right, you can maximize your financial health as we head into the new year.
Here are four ways to help you make the most of your spending this holiday season, and beyond:
- Stick to your budget. Nearly two-thirds (60%) of consumers plan to follow a budget to combat financial stress around the holidays, but don't let the word 'budget' scare you if you haven't already mapped one out - it's never too late to start planning and tracking your spending. Begin by totaling up what you've already purchased and combine it with your remaining expenses. Consider all your anticipated costs and be as detailed as possible. For example, assign a dollar amount to each person you plan to buy gifts for and don't forget to weigh other holiday expenses that may seem small but add up quickly - like shipping fees, wrapping paper and holiday decorations. From there, make sure the total fits within your overall budget. As you look at the numbers, determine what your priorities are. What can you comfortably spend on gifts, travel or holiday hosting without breaking the bank? Whether your holiday shopping is already underway or you've yet to get started, building a budget - and sticking to it - is key.
- Get creative with gifting and make a plan. One of the easiest ways to end up with impulse purchases that don't fit your budget is to wander aimlessly through stores or browse endlessly online. Think about what stores you'll need to go to for the items on your list and develop a shopping plan so you're less likely to purchase without purpose. Also, try to get creative with your gifting to help ease the financial burden. Consider going in on joint gifts or thinking beyond material items. Nearly half (48%) of people said they prioritize shared experiences, like a trip or concert, with family and friends over giving material items, and many others plan to make 'do-it-yourself' (DIY) gifts or give a sentimental act of service.
- Use a credit card that rewards you as you go. A cash back card that offers rewards on everyday purchases is a simple way to earn rewards while you spend all year long. From online shopping and traveling over the holidays to filling up your gas tank or taking on new home improvement projects in the new year, cash back cards can be a great tool to earn rewards that can help offset your spending. For example, the Bank of America® Customized Cash Rewards card allows you to earn 3% cash back in one of six categories of your choosing, 2% cash back at grocery stores and wholesale clubs (on the first $2,500 in combined choice category, grocery store and wholesale club purchases each quarter), and 1% back on all other purchases. As your cash rewards grow, you can redeem your earnings as a statement credit or deposit directly into your Bank of America® checking or savings account to help offset the cost of your routine spending throughout the year.
- Keep your 2023 goals in mind. It can be easy to get carried away with so many expenses piling up throughout the holiday season, but if you stick to your budget and keep your financial resolutions for the coming year in mind, it'll help you stay on track. And when you take the time to plan ahead now, you'll join the 80% of Americans who have already set financial goals for 2023, including 44% who have prioritized increasing their savings in the new year. In addition to some of the tips listed above, you can get a head start on your 2023 savings now by using a tool like Bank of America's Keep the Change® savings program, which rounds up every purchase made on a Bank of America debit card to the nearest dollar and transfers the change to your savings account.
No matter what your New Year's financial resolutions are, keeping them in mind while you spend during the end of the year can help set your priorities straight and enable a stress-free start to 2023.