UPDATED: December 12, 2018 – Holiday time is upon us again, and many people are wondering how they can use their money wisely, especially if they are on a tight budget.
This is the season for using your credit cards strategically to compensate you for a portion of your holiday spending. Here are a few tight budget suggestions that will help to make your 2016 holiday spending more economical:
- Don’t overspend! – Yes, it’s wonderful to give, but not at such a cost that it will bankrupt you. Make sure to set a specific budget at the beginning, so you won’t be knocked for a loop when the bills come due
- Budget for absolutely everything – Besides gifts, figure in shopping costs (parking and gas), party food and drinks, greeting cards, decorations, postage on out-of-town gifts and cards, travel expenses, and any charitable contributions or holiday-related clothing.
- Make a list of every person receiving a gift – family, friends, mail person, sanitation workers. Don’t forget the Secret Santas and gift exchanges at school or work
- Set expectations, especially with your children – For all others, explore more economical gift giving options like gift exchanges, grab bags, and even skipping gifts altogether
- Take advantage of new credit card sign-up bonuses – There are some credit cards out there that offer sign-up bonuses that can amount to several hundred dollars. Getting that bonus cash will probably require you to charge a certain amount in a specific amount of time. Under normal circumstances, the amount required might be larger than you would usually spend; but since this is the holiday season, you’re very likely to be spending more than usual.Be careful, though – applying for a credit card might temporarily lower your credit score. Credit card issuers tend to frown on people that open up new cards time and again. Make sure to choose a card that combines ongoing rewards as well as that sign-up bonus
- Check you reward rates – Some credit cards have rotating bonus categories that may offer larger reward rates at Amazon, department stores, and other big retailers during the 4th quarter of the year. This will come in handy if you will be purchasing many gifts.Look for a credit card that offers rewards for shopping at your favorite stores. Also, if you traditionally buy most of your gifts at one store, inquire if that store offers a credit card. These credit cards tend to give you extra discounts. Just be sure to pay your balance off in full each month, since store credit cards are notorious for charging horrible high-interest rates
- Find an online shopping portal that will give you extra points for using them – Mr. Rebates has a $5 sign-up bonus, and then provides cash-back offers from over 2000 retailers – up to 30% off! Stores include Staples, Best Buy, Overstock, etc. Ebates offers cash rewards at a large number of online retailers, plus a $10 sign-up bonus. Go directly to Ebates, and then to your favorite retailer site (think Sears, Home Depot, etc.). Ebates will track your spending, and you’ll get some additional cash back.Find stores that are offering 10% cash back, for example, and your savings will begin to add up. Add your name to get alerts concerning daily double deals, and you’ll get double cash back at chosen stores! A final recommendation is EV Reward, which indexes over 40,000 coupons and rewards for over 10,000 online services and stores!
- Apply for a rewards card that offers 0% interest – The Citi Simplicity card is offering 0% for 21 months, and the Capital One VentureOne card gives 0% interest for a year on all purchases. It’s critical to pay back the card before the 0% offer is gone
By following the suggestions listed above, you’ll be able to stretch a tight budget this holiday season!