It’s the most wonderful time of the year — and one of the most expensive. The holidays and shopping go together like Santa Claus and cookies as well as Hanukkah and dreidels, but without a plan, it can be easy to overspend. Don’t let the holidays bust your budget this year. With some smart planning, you can avoid going into debt this season and make your holiday dollars go even further.

Create a budget.

To avoid overspending, you have to know what you can afford. Start by looking at how much you spent last year; this will help you estimate how much you’ll spend again. Then, determine if that amount is reasonable. A general rule of thumb is to spend no more than 1% of your annual income on holiday expenses. So, if you earn $60,000 a year, you’d want to spend no more than $600 on the holidays. Once your budget is set, make a commitment to stick to it. It requires some discipline, but you’ll be glad you did when your next bank statement comes around.

Use a rewards credit card.

Two words: free money. Managed wisely, rewards credit cards can be used to your benefit and stretch your dollars. Buy your holiday gifts with a credit card that earns points or gives you cash back for your purchases. You can use those rewards to put money in your pocket, pay down charges, book travel, or buy more gifts! A word of caution: Don’t use a credit card unless you have the cash to pay it off within the same billing cycle. Otherwise, you’ll rack up interest and cancel out the benefits.

Shop through a cash-back site.

In addition to getting cash back through your credit card, you can also save a little money by shopping through a cash-back site. How does it work? Retailers pay these sites a commission for sending business their way; the cash-back sites then share that commission with the consumer by paying you back a percentage of what you spent. A few things to keep in mind:

  • You may not get paid right away; check if the site has a specific payout period.

  • You may need to accrue a certain amount before receiving a payout.

  • You may get paid in the form of gift cards.

Be sure to find a reputable site, such as Rakuten or BeFrugal, and double-check their policies so you know exactly what you’re getting.

Don’t wing it.

Knowing what to buy people is half the battle, but if you can determine what you’ll buy in advance, you’ll be much more likely to stick to your budget. Write down what you’ll get everyone on your list and how much you’ll spend on each person, then look for sales and deals to buy those things at a discount. If the item is available from multiple retailers, comparison shop for the best price. Streamline this by using a price comparison app like ShopSavvy or BuyVia. And if you are in a brick-and-mortar store and discover something cheaper elsewhere, ask the store if they’ll price match (most of the time, they will).

Be willing to compromise.

If you’ve tried everything and still can’t afford to go all-out for the holidays, it’s ok to scale things back. Your holiday spirit isn’t measured by how much you spend. There are other ways to give. Hand out homemade cookies or other holiday treats; write letters to your loved ones; plan a day of fun with your best friend; help a family member with an overdue house project. Sharing your time and talents with those closest to you can be the best type of gift. And those experiences tend to stay with us more than anything that comes wrapped in a bow.

Saving money is always a good idea. Talk to your personal banker at your local Marquette Bank branch. We can help you set aside money in savings and more. Come in or give us a call—we’re here to help you with your financial needs.

[1] National Retail Federation, Retail Holiday and Seasonal Trends, Winter Holidays.
[2 ] Nerdwallet, 2020 Holiday Shopping Report.

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