As you begin holiday shopping, you may be trying your best to avoid going into to debt when purchasing gifts. According to a 2024 Holiday Outlook from PWC, overall spending is expected to increase this year to an average of $1,638 per shopper.
Taking on too much additional debt can negatively affect your finances, like a dip in your credit score. However, the right practices can help you spend within your means and shop for the holidays responsibly. Below, CNBC Select details a few tips to stay within budget and minimize your spending.
What we'll cover
Compare savings accounts
Stick to your budget
You might have a well-thought-out holiday purchasing plan, but once you get into the heat of shopping, you may find your list growing. Budgeting will ensure you know where each dollar is going, which can be an effective way of holding yourself accountable. You also want to avoid making a budget but then never looking at it again.
You Need a Budget (YNAB) is a great option that helps you organize your finances through its zero-based budgeting system. Every dollar is assigned a "job," such as grocery store spending or car payments, and can help ensure you're putting enough in the right categories.
You Need a Budget (YNAB)
Cost
34-day free trial then $109 per year ($9.08 per month) or $14.99 per month (college students who provide proof of enrollment get 12 months free)
Standout features
Instead of using traditional budgeting buckets, users allocate every dollar they earn to something (known as the "zero-based budgeting system" where no dollar is unaccounted for). Every dollar is assigned a "job," whether it's to go toward bills, savings, investments, etc.
Categorizes your expenses
No
Links to accounts
Yes, bank and credit cards
Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
Security features
Encrypted data, accredited data centers, third-party audits and more
Terms apply.
If you don't have as much experience with budgeting, Monarch can be another good starting point. It helps you track all your finances in one place and can help you visualize your money with graphs and charts compared to just a spreadsheet.
Monarch
Cost
$8.33/month (billed $99.99 annually); $14.99/month (billed monthly) - get 50% off your first year of Core Plan with code CNBC50
Free trial
7-day free trial is available before subscribing
Standout features
Net worth tracker, investment portfolio tracking, goal creation and progress tracking, budgeting and expense tracking
Categorizes your expenses
Yes, but users can modify
Links to accounts
Yes, bank and credit cards, as well as IRAs, 401(k)s, mortgages and loans
Availability
Offered in both the App Store (for iOS) and on Google Play (for Android); web version also offered
Security features
Utilizes industry-leading security practices, according to Monarch's website
Terms apply.
Keep your holiday funds in a separate account
If you have difficulty managing your money, sometimes the best method can be to have a separate holiday fund. Keeping your holiday spending money in a high-yield savings account allows you to earn interest on your funds and still make easy withdrawals.
The Western Alliance Bank High-Yield Savings Account offers an above-average APY and has no overdraft or monthly maintenance fees. To accelerate completing your savings goals, you can set up automatic transfers each month.
Western Alliance Bank High-Yield Savings Account
Annual Percentage Yield (APY)
3.80% APY
Minimum balance
$1 minimum deposit
Monthly fee
None
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
No overdraft fee
Offer checking account?
No
Offer ATM card?
No
Terms apply.
Shop around for the best deals
Sometimes the price tag you're looking at is the best you'll find. But more often than not, there's a better deal out there. Taking the time to peruse the internet or visit other stores for lower prices on items you need can save you lots of money — especially if you have a lot to buy.
Of course, shopping around can be time-consuming, but browser extentions like Capital One Shopping and PayPal Honey can help when it comes to finding discount codes for different retailers, in addition to offering shopping rewards. By taking the time to shop around for the best available price before buying, you can save significant money — sometimes even hundreds of dollars if you're doing a lot of shopping online.
Capital One Shopping
Cost
Free
How to save
Earn Capital One Shopping Rewards on eligible purchases, automatic coupons and price comparisons.
How to use it
Download the Capital One Shopping app or install the browser extension.
How to receive your savings
Capital One Shopping Rewards can be used to purchase gift cards.
Terms apply.
Use the right credit cards
If you're going to use credit cards for your holiday spending, consider using a card that lets you earn cashback. Plus, some cash-back cards offer generous welcome bonuses and a 0% intro APR period, which means you can save on interest charges if you need to finance some of your purchases.
The Chase Freedom Unlimited® (see rates and fees) offers an above-average return on everyday spending, plus as a new cardholder you can earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers get long intro APR
- No annual fee
- Travelers face a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
Pro tip: Using a credit card that offers purchase protection can provide some extra security for some of your holiday gifts.
The Wells Fargo Active Cash® Card is a solid choice for earning unlimited 2% cash rewards on eligible purchases and it comes with a $200 cash rewards bonus after spending $500 in purchases in the first three months. This card also has an introductory APR period.
The Wells Fargo Active Cash® Card is great if you want simplicity thanks to its flat-rate 2% unlimited cash rewards on purchases and $0 annual fee.
- High flat-rate return on purchases
- Intro-APR for purchases and qualifying balance transfers for a year
- No annual fee
- Cell phone protection
- Has a foreign transaction fee
- Limited redemption options unless you pair it with a Wells Fargo card that allows point transfers
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 18.49%, 24.49%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don't expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Balance Transfer Fee
3% intro for 120 days from account opening, then up to 5%, min: $5
Foreign Transaction Fee
3%
FAQs
How do I cut back on holiday spending?
There are a few ways you can reduce your holiday spending, such as creating and sticking to a budget, setting price limits for any gift exchanges, opting for homemade gifts or free experiences or narrowing down your list of gift recipients.
What is the average holiday spending?
Consumers are expected to spend an average of $1,638 on holiday spending, according to the 2024 PWC Holiday Outlook.
How do I pay off holiday debt?
There are many different strategies for paying off debt, with two common options being the snowball method and the avalanche method. The snowball method focuses on paying off the smallest balance first, while the avalanche system targets the debt with the highest APR first.
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