Thrifty Thinking: Avoiding Holiday Overspending

I recently had the chance to interview Nicole Lapin, personal finance expert, about budgeting during the holidays.

• What are some general tips for people to know if they want to avoid overspending during the holidays?
• The holiday season is supposed to be merry and bright, but due to the high cost of the holidays and the interpersonal “politics” of things like gifting, shopping and entertaining, it can also be filled with friction between family, friends and loved ones. A recent Bankrate survey found that 45 percent of Americans feel compelled to go beyond their comfort zones when buying holiday gifts, and it turns out women are significantly more likely to feel pressured to overspend - moms especially!
• This season learn how to manage your holiday cash flow while racking up credit card points that you can use all year round! We all have that friend who always “forgets” to pay their tab that you covered. If you can minimize these IOU’s  – you’re one step closer to savvy financial management. A great way to rack up credit card reward points if you have a rewards credit card is to pick up the tab for shared expenses and then have your friends pay you back. For example, if you have a credit card that gives you a bonus at restaurants or at grocery stores, volunteer to pay and get the rewards points your credit card offers, then have your friends pay you back with Zelle. The money will be in your bank account before you get your receipt – and you can redeem those credit card points for whatever you want. Make sure you get paid back and that you pay your balance in full each month, though - earning those points isn’t worth it if you’re carrying a balance and getting hit with interest charges. Marketwatch has some tips on how to get people to pay you back, too.
• If parents can't make it to the mall, what are some ways they can shop for holiday gifts from their couches at home?
• Get appy and savvy. If you're jonesing for something but it's not on sale yet, sign up for Shoptagr and you'll be alerted when it does go on sale. Another app I like is Honey - you can install it in your browser at www.joinhoney.com and it will search automatically for any coupons online before you check out of a site automatically. Be careful though - it's easy to go crazy clicking and buying—especially if you're tired or in a bad mood. So approach your holiday shopping just like you would approach a trip to the grocery store. Plan ahead, write a list and know what you are searching for so you are less prone to the pitfalls of online shopping rabbit holes.
• Honestly, my favorite gift to send from my couch is money! It’s the best gift you can give that never goes out of style or over budget - and recent studies show EVERYONE wants money for the holidays this season! So this year, instead of braving the outdoors and trying to rush the mall on one of the busiest shopping days of the year, give your friends and family the best gift of all: whatever they want. I like to personalize every gift, so whether that’s writing and mailing a nice card or writing “to spring for that checked bag when you come to visit” or “for a new pair of your famous argyle socks” in the memo line when you use Zelle to send your gift, you know you’re staying on track for your budget and giving a personalized gift that they actually want. It’s a great way to give people a thoughtful gift that won’t break the bank - and they’ll know you really care and listen. Plus, you never have to leave your couch.
• Giving money is a win-win for you and your friends and family for several reasons: holiday shopping can get stressful at the best of times - and oftentimes, the gift you worked so hard to find, pay for and bring home will end up getting regifted or even worse, sent to a landfill. Money in your bank account never gets sent to a landfill, plus you don’t have to wrap it. Also, shopping without a budget or a plan on what to buy can be a budget buster - malls are easy to get lost in for hours, and if the weather conditions get dangerous to travel in the last thing you want is getting stuck without a gift - or stuck spending beyond your means in the mall when the snow creeps up on you!
• That said, if you do want to get a physical or experiential gift (but don’t want to brave the weather!) consider coming together with friends or family and decide on one single higher value gift you know the receiver wants, whether that’s a spa day for your mom or the latest Xbox game for your nephew. Then, use Zelle to split the cost throughout the group - this way everyone gets equal credit for the amazing gift and you can all stick to your budgets and stay warm while doing it.
• How can people save on holiday travel?
• Look for the best holiday travel deals - but avoid hidden fees. Holiday travel can get expensive quickly, especially if you’re traveling with kids - plane tickets add up fast, and it can be hard to keep kids occupied for long periods of time! To get around this, always hunt for holiday travel deals. Websites like Hipmunk or KAYAK search multiple airline and travel sites at once, making sure you’re getting the best deal on all your holiday travel. Be careful of fares that might have hidden fees, though - lots of airlines have “basic economy” tickets now that don’t allow you carry-ons or for you to choose your seats, and the last thing you want is to end up having to spread your family out across an airplane.
• Split the cost of travel whenever you can. Whenever you can, split the cost of travel with family who live nearby - after all, if you’re all going to Grandma’s for the holidays you might as well all go together. Renting a minivan or even an RV and playing road trip games on the way is a way to save money and keep your kids occupied at the same time. Instead of constantly passing money around throughout the trip, let one person pay the cost of gas money or rental car charges and then use Zelle to split the costs seamlessly. Points junkies will rejoice –  and the money will be in their bank account before their credit card bill is due. Plus, you’ll all save on ATM fees if you’re not withdrawing money in towns where your bank doesn’t have a branch.
• If you can, skip the travel entirely and host a party together at someone’s home! This year, team up with family (or friends) to host a higher quality get-together without going broke when you share the responsibilities - and the costs - instead of going out for a big expensive group dinner or trying to cover the costs of everything solo. Not everyone is an A+ party planner though, so let everyone take on the responsibilities that best suit them - maybe your aunt makes a mean mulled wine but can’t even microwave something without it exploding, and maybe your cousin who doesn’t even have the time to pick up a store-bought pie on the way would rather just send you money to pay for a cleaning service the next day or a babysitter who can keep kids occupied while the adults stay up past their bedtime.