Holiday shopping tips: How to be financially smart this season

It’s the time of year when shoppers can get caught up in holiday deals and spend beyond their means.

Emily Irwin, managing director and senior director of advice at Wells Fargo’s Wealth & Investment Management, has called this trend the “swipe and forget” or the “click and forget.”

In January, some customers are faced with sky-high bills that they cannot pay.

“Getting caught up in that holiday whirlwind can lead to what I call the credit card or holiday hangover in January,” Irwin said. “The bills are starting to come in, and potential vacation buyers may find they don’t have enough cash flow to pay those bills in full.”

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Even if the deals seem attractive, these items could end up costing some customers more in the long run if they can’t pay their bills right away, Irwin said.

Credit cards can hit consumers with high APRs, and if consumers miss a payment altogether, it could also hurt their credit score, she added.

A Black Friday sale sign outside an Aldo store on Black Friday in New York, USA, on Friday, November 25, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)

The first trick to being a financially savvy shopper isn’t necessarily taking advantage of all the big shopping days like Cyber ​​Monday. The first thing shoppers should do before heading to the store or online is to list what they need for themselves and what they want to get for other people, Irwin said.

It’s also smart to add a subcategory to assign a dollar amount to certain people and certain items, she added.

“I think that’s a really good place to start because that gives the whole picture of what you’re hoping to accomplish during your holiday season, and then you can determine where to move within that,” Irwin said.

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A Black Friday sale sign at a Hollister store on Black Friday in New York, USA, on Friday, November 25, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)

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This can help shoppers keep track of everything and adjust a budget if necessary, Irwin said.

Another tactic is stacking discounts. This means using paper or digital coupons and credit card rewards. Shoppers can also buy through a website that gives cash back on purchases.

Consumers should also look at the fine print of an order. For example, it’s important to see how much shipping and taxes there are, and whether there are ways to cut those costs, Irwin said.

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One thing shoppers should avoid is opening too many credit cards in an effort to save money.

Typically, stores will ask customers if they want to open a credit card to save anywhere from 5% to 20% on a purchase, but Irwin strongly urges signing up.

If you open too many cards, “you start splitting your accounts between a variety of different financial instruments that are hard to track,” Irwin said.

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