The average holiday shopper will spend $737.95 on gifts, decor, greeting cards and other holiday items this year, according to the latest data from the National Retail Federation.
If you're worried about having enough saved up for the holidays, use these seven tips to budget for holiday gifts:
1. Take a close look at your discretionary income. Your holiday budget will depend on how much extra money you have after your monthly expenses are covered. If your income has changed recently or if you are expecting a bonus before the year's end, review your budget closely to determine exactly how much you can afford to spend on extras this season.
2. Look back. Consider how much you spent over the holidays last year and if you have any regrets about your spending activities. Did you end up buying items at the last minute? Could you have saved money on decorations and other items by planning ahead? Look at your statements and receipts to figure out your average holiday expenses for the previous years, and work that amount – or less – into this year's budget.
3. Start comparison shopping online. If you plan on making any big-ticket purchases this season, do some online research to learn more about features, benefits, prices and any available rebates. Look for coupon codes, and figure out which sites offer free shipping and other incentives that will keep costs down.
4. Shop the circulars without leaving home. Store circulars around the holidays typically include the hottest deals of the week and special holiday buys. Instead of making the trip to the store and dealing with crowds to purchase those fast-selling items, shop with free apps like Pounce. Pounce allows users to buy items just by taking a photo of the product image in circulars of major retailers including Macy's, Target and Toys R Us. Pounce founder and CEO Avital Yachin points out, "By not having to brave mall madness and holiday traffic, users save money on gas, tolls and parking. They can also do all their shopping on 'their time,' not just during mall hours."
5. Consider homemade gifts this year. If you're the crafty type, make a gift list of people who might appreciate handmade gifts or baked goods instead of store-bought items. You can save money on your gift spending by buying ingredients or craft supplies in bulk and by taking advantage of special offers at craft and thrift stores.
6. Put together a Black Friday shopping strategy. It's no secret that you can find some incredible deals on big-ticket items and in-demand products during Black Friday weekend. If you have some specific items on your gift list, including personal electronics, computers, televisions, toys and even kids' clothes, put together a Black Friday wish list so you can shop the circulars and map out a plan to round up what you need. Keep in mind that some retailers run Black Friday sales both online and offline, so you might be able to save yourself a trip to the store if you jump online when Black Friday madness begins. If you miss out on Black Friday fun, remember that Cyber Monday can also be a great time to score a few deals on this season's must-haves.
7. Don't rely on credit cards to fill in the gaps. Be a smart holiday shopper this year and stay out of debt by putting together a gift list that you can honestly afford. While it's tempting to overspend during the holidays and just charge your credit card when you run out of cash, you could end up starting the New Year in debt. If you can realistically pay off the charge amounts before the end of the billing cycle, use a rewards credit card to earn some money from your holiday spending spree. As long as that balance ends up being paid in full before the billing cycle ends, you can enjoy a modest discount on those holiday purchases – and stay under budget.
Sabah Karimi writes for the consumer blog Wise Bread, where you can find ways to make money over holiday break.