4 Ways To Manage Vacation Spending During The Pandemic – Forbes Advisor
Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.
After more than a year and a half of pandemic life, we are well acquainted with the new normal. As we prepare for a 2021 holiday season that will in many ways mimic that of last year, new concerns have arisen such as vaccination issues, travel hesitations and soaring food and travel prices. gasoline.
While you might just be starting to think about holiday shopping, we’re already well into this holiday season when it comes to sales.
Last year, the holiday shopping season kicked off with Amazon Prime Day, which was carried over from its typical summer appearance to mid-October. This year, Amazon started offering vacation-level deals even earlier, on October 4. Promotions at other major retailers quickly followed.
Read more: From Supply Chain Problems To Shipping Delays: Is It Worth Shopping For The Holidays Now?
This head start extended the holiday shopping season to nearly three months, compared to a ânormalâ year when holiday sales increase around mid-November. This extra time can be useful if you like to plan ahead and have a well-prepared budget. But what if your finances have changed dramatically since the start of the pandemic?
The Forbes advisor spoke to a few experts to help you understand how holiday shopping will be different this year and how you can protect your wallet from the temptation to overspend.
Why retailers are extending the season
Much of the lengthening of the holiday shopping season last year was due to the need to stagger the process.
Stores limited capacity so customers and associates can keep physical distance in aisles. And encouraging shoppers to buy early has helped online retailers deal with warehouse congestion.
This year, the focus is more on supply chain issues and inflation than overcrowding. The old norm of booking successful sales deals for Black Friday and Cyber ââMonday no longer works for many retailers, and it doesn’t work for many consumers either.
As has been history all year, production has been delayed due to everything from temporary factory closures to overcrowded ports to driver shortages.
Read more: Why is inflation rising right now?
Many sales campaigns this year remind us not to wait too long to buy gifts. âMany people experienced shipping delays during the pandemic and might want to order early to play it safe,â said Scott Rick, professor of marketing at the Ross School of Business at the University of Michigan.
Offering as much choice as possible throughout the season gives retailers a better chance to meet your needs (keeping you coming back again and again throughout the year).
A longer shopping season can increase stress
The outlook is good for vacation spending, with the National Retail Federation anticipating the highest holiday retail sales on record.
A survey by professional services provider PwC found that 75% of consumers plan to spend as much or more this holiday season than last year. The survey also found that households earning $ 150,000 or more will spend nearly double the vacation average on gifts, travel and entertainment.
But the economic recovery has been uneven, leaving some to prosper while others continue to pick up the pieces of life interrupted by job loss or illness.
Every layer of uncertainty, from our health to our finances and beyond, creates more and more anxiety for many of us. âWhen someone is anxiousâ¦ they don’t make the best decisions,â said Maggie Baker, psychologist and financial therapist and author of âCrazy About Money: How Emotions Confuse Our Money Choices and What to Do About Itâ.
If you’ve been into the âofficialâ holiday shopping season for more than a month and feeling stressed, here are four ways to manage your budget for the season.
4 Ways to Budget That Extra-Long Holiday Shopping Season
If money is tight this year, you are not prevented from enjoying the season, but you may need to adjust your budget. These strategies can help you tailor your holiday traditions for that weird second year.
1. Recognize that things are different
Before embarking on any vacation or shopping planning, Baker recommends having a conversation with your family or friends about expectations for the season. Talk about what would make you feel better during a stressful time. The answers can help you determine how much you can comfortably spend and avoid misunderstandings with those close to you.
âIt’s important to recognize that this won’t be your normal Christmas,â Baker said.
She added that our reaction to negative elements in our life can be twice as strong as how we experience positive events. This negativity bias can put a damper on your vacation, even if you’ve done your best to keep things cheerful.
2. Rethink your priorities
If your income changed during the pandemic, you may not have any savings to tap into to fund your vacation. âIf vacation spending is important to you, can you find ways to save in other parts of your budget and redirect them to your vacation spending goal? Said Amy Richardson, CFP and Schwab Intelligent Portfolios Premium Planner.
Richardson said he’s looking for ways to cut spending, even temporarily, to free up extra money. Call to try to renegotiate your cable or Internet plan, or turn to any unused gift cards you may have on hand. If you have credit or debit card rewards, you may be able to convert them to gift cards or get cash back.
Now is a good time to look for ghost fees, too, advised Kevin Condon, senior vice president of deposit products at Bank of America, those recurring expenses that you might have overlooked after a free trial ends. Canceling even small expenses can free up some extra money. If you use a budgeting app, it can identify recurring subscriptions for you; if not, take a look at your last bank statement.
3. Adjust the scale of your holiday celebration
A miniature celebration may be enough to keep morale high during the winter. “Consider making a secret Santa Claus [exchange] this year instead of buying freebies for everyone, âsaid Richardson. âAgree on a spending limit, pick a name, and buy a gift instead. “
If you don’t know how to set boundaries that everyone will stick to, have a conversation that recognizes how this year is different and explain what that means in concrete terms. Some people around you may need a little reminder that not everyone can afford to participate at the same level.
âIf you are installing guardrails, it can be fun to live inside those guardrails,â Condon said.
4. Look for deals, but don’t get overwhelmed
Obsessing when you’ll get the best deal can cause you to lose the price comparison, and it probably won’t save you a lot of money.
Rick noted that it’s hard to beat a retailer who seems to come up with a different âdealâ every time you turn around. Try not to get too lost in researching prices and buying options. Many of the proven money-making tips like making a list and sticking to your budget still apply here, he said, although leaning into creative or utilitarian forms of gifting certainly helps, too. A handmade gift or volunteering to help a relative around the house can show your gratitude just as well as a store-bought item.
For online purchases, Richardson recommends installing browser extensions that will compare prices to help you determine the best time to buy. When it comes to in-store purchases, many retailers will offer a better price if you can prove that another retailer is advertising it; some also offer generous price adjustment windows during the holidays.