We may be deep into the holiday season, but you can still make some important changes.
- Inflation is forcing consumers to rethink their usual holiday spending.
- If you’re already up to your ear about holiday spending, you might want to come up with some last-minute strategy.
The holidays tend to be an expensive time of year. But this year’s holiday season has been especially tough for many, financially, because of inflation.
Not only does it cost more to buy gifts and other holiday items, but many consumers have racked up credit card debt before the holiday season begins to cover their major bills. And so the idea of taking on more debt can seem daunting.
So it’s no surprise to see that 8 in 10 consumers are cutting back on holiday spending this year, according to the BMO Real Financial Progress Index. And you might want to follow their lead, too, even if you’ve already spent quite a bit on vacations to date.
Don’t dig yourself into a deep hole
Credit card interest rates are rising these days as a result of interest rate hikes by the Federal Reserve. This makes carrying a credit card balance more dangerous and expensive than usual. And that’s why it’s worth paying attention to cutting back on your spending for the rest of the holiday season, even if you haven’t made any cuts yet.
What changes can you watch? First of all, if you haven’t finished shopping for holiday gifts, rethink your plans. Instead of shelling out another $200 or $300, give yourself a smaller budget or consider cutting back on your gift list if money is tight. In most cases, a beautifully written card or note will go a long way in spreading holiday cheer.
Next, think about how you will actually celebrate Christmas. Are you hosting a large crowd? If so, it’s not too late to ask people to bring a drink, dessert, or side dish so you have less to prepare (and less to buy). And if you’re asked to drive a long way to see family for Christmas and you feel like you can’t stomach the gas and tolls, bow down, especially if they can’t accommodate you and you have to pay for it. hotel room to make that trip.
Finally, review your Christmas plans. New Year’s Eve is one of the most expensive nights of the year to go out. Even pop-up restaurants tend to impose a pre-fixed menu, which can make you spend twice what you would normally pay for a meal (not to mention limit yourself to food choices that aren’t necessarily at the top of your list).
Instead of leaving the house, consider having a fun night out. Order a pizza or cook something delicious and get rid of the hassle of dressing up and dealing with crowds.
A wise decision
Cutting back on holiday spending isn’t an easy decision, but it may be necessary. You don’t want to start the new year with a huge pile of debt hanging over your head. And if you manage to cut some expenses in the coming weeks, you might not have to.
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