Holiday shopping is going virtual this year. Here’s how to avoid overspending
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Retailers expect online orders to dominate holiday shopping this year, and are offering deals before and on Black Friday in anticipation of a low in-person turnout.
Online holiday shopping is expected to rise 35% this year, topping $190 million of the $1 trillion experts expect shoppers to spend nationwide. To compensate, some retailers are gearing up for a more digital Black Friday. Walmart is adding 42 pop-up distribution centers to manage the surge of online orders. Other stores like Target are offering promotions online and in-store, including letting customers reserve time slots for peak shopping days.
“People will be shopping in whatever way they feel comfortable,” said shopping expert Trae Bodge. “There’s not going to be such a bottleneck over Black Friday or Cyber Monday, and we're already seeing retailers offering the kind of Black Friday-level discounts now.”
Shopping online may lead to overspending this year because you don't have to leave your home to get it done. Here’s how to prep your wallet to avoid a holiday hangover.
Prioritize your monthly bills and expenses before making your holiday shopping budget, said Marguerita Cheng, certified financial planner and CEO of Blue Ocean Global Wealth. Limiting travel and dining out because of the pandemic may have freed up extra funds in your budget that can be put towards holiday shopping. For example, if you haven’t spent as much money on entertainment recently, you may have extra discretionary money you can put towards a holiday gift. Shoppers may be able to tap their airline miles for extra cash, said Cheng. You can redeem unused points for gift cards or other products, depending on your reward program, she said.
You can also send gift cards directly to your loved ones digitally using GiftYa, a person-to-person gift card app, said Bodge. “If you have people on your list who are struggling financially, as so many people are, why not send them a GiftYa now? Maybe that will allow them to do their holiday shopping.”
Set gift price expectations with your friends and family the way you would spending limits. It's ok to feel like you can’t shower your friends or family with gifts this year if you’re looking to conserve money or build up your emergency fund, Cheng suggests breaking the ice right away by admitting the awkward nature of the conversation.
Talking about price expectations may come as a relief to your friends or family, said Bodge. “My guess is that if you propose it, there’s got to be at least one other person in your group who's going to be really grateful that you did.”
You may get a gift or two you could have done without. Returns may look different from year’s past, making gift receipts essential, said Bodge. Whether you’re shopping from a local boutique or purchasing a gift from Amazon, it may be hard to return an item without a receipt. “If you do have a gift receipt, you rest assured that return windows will be extended this year,” she said. “If there's no gift receipt in the box, you may be in trouble. I would think about regifting at that point.”
Some holiday purchases may not happen without a line of credit. Americans walked away from the 2019 holiday season with an average $1,325 in debt, according to Magnify Money. One way to avoid buying everything you see online is to never store your credit card information on any device, said Cheng: “That way you actually have to get up, get your card and really think about that purchase.” Setting spending limitations can also be useful. “You can set a parameter, like only charging $500, so you're not caught off guard ,” said Cheng
Talking to your credit lender is always an option if you spend a little more than anticipated, said Cheng. “Talk to your credit card company and see if you can qualify for a balance transfer. You're still going to pay it, but this way the interest isn't as much,” she said. “All of these little strategie can help. We don't want people to feel ashamed or alone. happens.”
Image: Ippei Naoi
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