Black Friday and Cyber Monday sales are already here — days earlier than the deals we usually see the day after Thanksgiving. That can mean more time to shop for the best deals, but the extra days of sales can also lead to overspending. Findings from CNET’s holiday survey show that the majority of US adults are making sacrifices to afford the holiday season, 16% are still using credit cards that they don’t plan to pay back in full on time. And 11% will use Buy Now, Pay Later. While it may be tempting to buy extra items because they’re on sale, there are other ways you can give holiday gifts to your loved ones while balancing your spending and bills this holiday season. Here are our latest survey findings on this holiday season and what experts think.
Most US adults plan to make or have already made some sort of financial trade-off or sacrifice for the upcoming holidays. Here’s a closer look.
Some shoppers are planning to buy fewer gifts or shop for fewer people (30%). Bernadette Joy, a personal finance coach and Money Expert Review Board member, wasn’t surprised to learn this. Joy said that since the pandemic, there’s been less pressure on people to host large gatherings that require buying gifts for more than 30 people. Instead, many are choosing more intimate gatherings, which require fewer gifts. “There is this trend of being more thoughtful about the people that you do want to invest in,” Joy said.
Making trade-offs to afford gifts isn’t fun, but I loved learning that shoppers are focused on not starting the new year with holiday debt. According to the survey, one in four people are also spending less on nonessential items, such as travel, entertainment and dining, to better afford the holidays. Joy understands that making tough decisions to afford gifts and events isn’t ideal, but it’s better than leaning on financing. She encourages shoppers not to put holiday purchases on a credit card. Instead, use savings or cash. Even if you deplete your savings, that’s better than racking up debt, she added.
Saving money is always important during the holidays, the majority of US shoppers are planning to shop Black Friday and Cyber Monday deals. However, many shoppers took advantage of early sales, too. CNET’s commerce managing editor, Russell Holly, said there’s a growing trend to finish holiday shopping before Thanksgiving. Even though early holiday sales are done, there are a few deals Holly recommends ahead of the upcoming Black Friday and Cyber Monday sales.
Apple’s AirPods Pro 2 is at its lowest price point of $154 on Amazon, and the Govee TV Backlight 3 is 33% off which brings the discounted price to $47. And if you’re looking for a new video doorbell, the Google Nest Doorbell is now $100 instead of its usual price of $180. Deals will continue to pop up in the coming days, too.
It’s easy to crawl into debt when holiday gifts, events and travel costs add up. Sixty-four percent of Americans plan to pay for all or some of their holiday purchases using some form of cash, with 46% opting to use a debit card, similar to last year’s holiday survey response. Experts love that. Gregg Murset, a certified financial planner and CEO of BusyKid recommends shopping with a debit card as a self-restraint tool. Without a line of credit tempting you to overspend, you’re more likely to stay on budget. A credit card makes it too easy to “kick the consequences down the road,” he said.
Although most shoppers are opting to use cash or debit, many will still turn to credit cards and BNPL plans for all or some of their purchases. We found that 24% plan to finance their holiday purchases using these methods, while 31% plan to use a credit card to earn rewards and expect to pay it back on time. Evan Zimmer, CNET’s credit card editor, said it only makes sense to use a credit card for holiday shopping if you can afford to pay off the balance in full right away. “You’d earn rewards which you could then put toward a trip or another gift, and you wouldn’t have to worry about costly interest charges,” he said. “Using a credit card for all of your planned and budgeted holiday spending could be a good way to earn a new card’s welcome bonus, too.”
If you’re not sure if you can pay off the balance in full, Zimmer says to steer clear of credit cards. The interest and potential late fees that would accrue will quickly offset any value you’d earn from credit card rewards. BNPL plans are another popular payment method during the holidays that may seem safer than credit cards. These financing plans often have hidden fees and can quickly land you in a debt cycle. Murset and Joy don’t recommend using them, especially for holiday shopping.
If you plan to use a BNPL plan, Joy says it’s best to make the repayment plan a clear line item in your budget. She also discourages shoppers from bringing debt from credit cards or BNPL plans with them into the new year, if possible. The holidays can add up quickly. Before you turn to financing, Murset recommends setting gift-buying expectations with your family and friends and considering ways to approach holiday shopping differently. That could include agreeing to a lower holiday budget for each recipient or giving creative, inexpensive gifts, like coupons for babysitting or dog walking.
Joy agrees. She suggests exploring low-cost gift ideas, including thrifting antique items with sentimental value, gifting family heirlooms or regifting an unopened item you received but have never used. You can also talk to your friends and family about hosting a White Elephant or Secret Santa so you’re only buying a gift for one person instead of many. When you’re shopping for new gifts, set a clear budget so you’re not tempted to overspend when sales and deals pop up.
At the end of the day, remember it’s not worth ruining your finances to purchase more gifts. “Don’t buy it if you don’t have money,” said Murset. “I know that’s so boring, but it’s absolutely the right thing to do.”