The market continued its upward swing last week, with all three major indexes posting a gain. The Federal Reserve Bank’s preferred inflation measure, the Consumer Price Expenditures report, comes out this week, and may provide some insight into the possibility of another rate cut in December.
As you head out to start your holiday shopping this week, the best way to do that is to make a plan. Before you hit all the sales, sit down and make a list of people you exchange gifts with. Look at your budget, and divide it up. By budget, I mean what you have available to spend. Not what you can put on a credit card and pay off over the first half of 2025. If you can’t pay off the card in full in January, you can’t afford it, and it is time to revise your budget.
Once you have your list and your budget, review the sales. Make a list and stick to it – the stores will have all kinds of door busters and impulse items waiting for you when you first enter the store and at check-out. These items are often of lower quality and/or overpriced.
If you know you’ll be shopping at a particular store, look at their app or other sales options. Some offer discounts for using their app, some for signing up for emails or texts. Both are great, if you use them for discounts on what you are already planning to buy. Remember that just because you bought something on sale, it doesn’t mean you saved any money. It’s only savings if you are able to pay less than the normal price for a planned purchase.
Store credit cards can be problematic. Sure, you may receive 10% off your purchase. But opening a new card is a ding on your credit report. And having the store card may encourage you to purchase more than you otherwise would have. Again, buying things you don’t need and didn’t plan to purchase just because they are on sale is not saving. It is spending.
Consider gifts of experiences, such as going out together for a meal or performance. Another option is home-cooked meals that you drop off during the holiday season, or baked goods. You can give memberships to local organizations like Historic Annapolis, Maryland Hall, or the Maritime Museum.
For larger families, switching to a Secret Santa, or only giving gifts to children, can be a cost savings. Same for large friend groups or workplaces. Have a party and do a White Elephant exchange. Agree in advance on a dollar limit.
Your action item this week is to avoid being sucked into the commercial side of the holidays. Gifts don’t have to be extravagant and over-the-top. A small, meaningful gift from a local business can have a big impact.
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