It might be summer now, but the holidays are just around the corner. If the idea of shopping for Christmas gifts stresses you out, you’re not alone. According to the National Retail Federation, Americans plan to spend over $950 on holiday gifts and decor. When you’re on a tight budget, that number can come as a real shock.
Your 5-step plan to get ready for the holidays
To get your finances in order before the holiday season, follow this five-step plan.
1. Sign up for a rewards credit card
Whether you already have a credit card or not, now’s a good time to shop around for a new rewards card. If you have good credit and a stable income, you can qualify for a card that offers valuable benefits like cash back on all purchases. Over the next six months, you can rack up hundreds of dollars in rewards that you can redeem for holiday gifts or decor.
For example, you can earn unlimited 1.5% cash back on every purchase you make with the CapitalOne® Quicksilver® Cash Rewards Credit Card. As an added perk, you can get a $150 cash bonus after spending $500 or more in the first three months after you open an account.
- Credit Recommended:
- Excellent, Good
- Intro (Purchases)
- 0% for 15 months
- Intro (Transfers)
- 0% for 15 months
- Annual Fee
- Foreign Trans Fee
- Regular APR
- 15.74% - 25.74% (Variable)
- Credit Recommended
- Excellent, Good
- One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases for 15 months; 15.74%-25.74% variable APR after that
- 0% intro APR on balance transfers for 15 months; 15.74%-25.74% variable APR after that; 3% fee on the amounts transferred within the first 15 months
- Pay no annual fee or foreign transaction fees
2. Pay off debt
Unfortunately, many Americans rely on debt to pay for the holidays and take months to pay it off. Some are still making payments on last year’s Christmas in July and August.
However, carrying debt can be expensive, and it can make it harder to plan for the next holiday season. If you relied on high-interest credit cards or personal loans and carry a balance, you could be paying hundreds in interest fees.
Instead, focus on paying off that debt as quickly as possible now, while there’s still a few months until the holidays. If that seems impossible, consider the following options:
- Consolidate your debt: If you have high-interest credit card debt, you can save money and pay off your balance faster by consolidating your debt with a personal loan.
- Transfer your balance: If you have good credit, you can also transfer your credit card balance to a low-interest credit card; many credit card companies offer promotional rates of 0% for up to 15 months.
- Launch a side hustle: If you need more money to pay down debt, pick up a side gig in your spare time. Whether it’s delivering groceries, walking dogs, or driving neighbors, you can make extra money to put toward your financial goals.
3. Set up a new bank account
A good way to keep yourself motivated — and to make your holiday fund off-limits — is to set up a new checking account that is exclusively for Christmas expenses.
Open a new account and set up monthly automatic deposits to start building up your savings. If you contributed $75 per month starting in July, you’d have $450 in the bank to put toward holiday shopping.
Even better, some banks offer bonuses for opening a new account. You could get $100 or more, giving you a headstart on your savings goal.
4. Take advantage of sales
The summer is when many retailers start preparing for the holidays. They clear out inventory to make room for new items, and often put the current stuff on sale. By paying attention to these sales — such as Amazon Prime Day — you can score a great deal.
It’s also a good idea to know when certain items are at their cheapest during the year. According to Lifehacker, July is the best time to purchase furniture, home decor, tools, and video games.
5. Sign up for shopping apps
You can save money and even get a check if you shop strategically with apps. Free to use, the two apps help put more money in your bank account:
eBates: Add the eBates free extension to your web browser and activate it when shopping online. You could earn as much as 30% cashback on all of your purchases. After the quarter ends, the company will send you a check or you can redeem your cash back rewards for a gift card to your favorite retailer.
Paribus: By syncing Paribus to your email, the company will scan your emails for purchase confirmations. Paribus watches those purchases to see if the price drops on any of them. If the price does go down, Paribus will reach out to the retailer on your behalf for a price adjustment and deposits that money back in your account. Over time, the savings can be significant.
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