Holiday Shopping On A Fixed Budget

Holiday Shopping on a Fixed Budget

The holidays are a time where we tend to overindulge in every aspect of our lives. From food to drinks to gifts, it’s easy to live in excess during the holiday season. Here are holiday spending tips to help reduce cost for a fixed budget.

Updated on Dec 05 2019


The holidays are a time where we tend to overindulge in every aspect of our lives. From food to drinks to gifts, it’s easy to live in excess during the holiday season. While fun, extravagant spending can blow your budget. If you’re on a fixed retirement income, this can be particularly detrimental to your finances. Here are holiday spending tips to help reduce cost for a fixed budget.

Create a separate account for holiday spending

If you’re currently saving for retirement or are already on a fixed retirement income, consider making a separate account solely for holiday purchases. Budget out expenses that are separate from the rest of your finances to help combat overspending. What should be included? All holiday costs including travel, hosting parties, decorations, presents, gift wrapping, etc.

And remember—a thought out budget is an essential aspect of any healthy financial plan—and holiday shopping keeps many Americans from saving for retirement.

Be a smart shopper

If you coupon clip or shop sales during off seasons, you may already consider yourself to be a smart shopper. However, if that same financial-savviness doesn’t transfer to holiday shopping, you may fall victim to excess spending. Here are some tips to be a smart holiday shopper.

1. Use browser extensions

Browser extensions like Honey can save you cash and provide other perks like free shipping or samples. All you need to do is add the extension to your browser and it will automatically apply all current coupons and offers. This is a great resource and can save you a substantial amount of money if you do most of your shopping online.

2. Maximize credit card rewards

Responsible credit card use can translate to quick free money. If you pay off your balance in full every month—which you should always do—then you can get some great rewards. This is especially helpful when on a fixed retirement income, because it’s extra money you haven’t accounted for.

As of November 2019, some credit cards, like the CITI Double Cash Card, offers unlimited 2% cashback on all of your purchases (1% when you buy plus 1% when you pay). You can save this 2% and put it in your holiday account throughout the year. Other cards offer more savings during specific times of the year. For example, the Discover IT card offers 5% cashback (up to $1500) on purchases from Amazon and Target.com made during October through the end of December. If you have a lot of purchases, this can be a great way to save some money.

The only caveat? You must pay off your balance in full every month. Otherwise, the high interest rates will put you into debt and offset any cashback you receive.

3. Take a trip to your local dollar store

Believe it or not, the dollar store can be an untapped resource for holiday shopping. Not only can you find stocking-stuffer worthy gifts like candy, pens, makeup, hair accessories, coffee mugs, toys, and more, but you can also buy wrapping paper, tissue paper, bags, cards, and all of your other gifts giving needs.

Don’t forget the emotional value of homemade items

In this ever-changing technological world, homemade gifts mean more now than they ever have before. Though handmade gifts aren’t free–you still have to pay for the products used to create the item–they tend to be cheaper and you may already have some of what you need at home.

-Cookies, cakes, candy, and more

Festive sweets for the season are always a hit. Baking treats for loved ones is a welcome gift and a genuine way to show someone that you were thinking about them. When you’re stopping by the dollar store to pick up your stocking stuffers and wrapping paper, take a look and grab some bags and boxes that you can use to gift your food items.

-Crafts from the heart

Do you like to embroider? Or, maybe you love to knit or watercolor. Turn your crafty hobby into gifts for your loved ones. These kinds of gifts are usually cheaper than something store bought, though they are time-consuming. These types of presents will bring more joy to the recipient, because it’s from the heart.

Stay disciplined and stick to your holiday shopping budget

Just like sticking to a diet, committing to and staying within a budget is hard. Don’t let your motivation fall by the wayside or cave in to commercial pressure. Regardless of what stores tell you, the holiday season is about friends and family—and that’s all that matters.

Sometimes, financial investments are the best gifts you can give. Speak with a local financial advisor to go over your options.

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