The holiday season comes with quite a price tag—and now more than ever in 2021. The average American will spend $1,463 during this year’s festivities, according to a recent Deloitte survey, which is a 5 percent increase from 2020. Moreover, 73 percent of retailers believe that consumers will expand their wallets much more this season than they have in years past as the world continues its steady return to public activities and traditional experiences.
However, the survey also notes that high-income households are the main financial drivers of this current uptick in holiday spending, while 65 percent of those who plan to cut back on holiday shopping are from low-income households. So what’s a young 20-something to do in the face of rising inflation costs, supply chain issues, and just the nature of this season? If you’re on a budget, here are some resourceful tips to make holiday shopping more affordable.
Planning Budget-Friendly Holidays in Your ‘20s
Make a Financial Plan and Stick with It
Seven in 10 Americans habitually spend over their budgets this time of year, according to research from the 2021 Affirm Consumer Spend Report. To avoid this common pitfall yourself, it’s crucial to make a financial plan before the holidays are in full swing, then continue to stick with it as the season goes on. Include both normal household living expenses and seasonal splurges in this plan, then trim down as necessary.
Think about which budget line items are essential and which would be fun extras if you have some money left over. For instance, you need to be able to afford rent, groceries and utilities, but must you purchase all new holiday decorations, or can you make do with that box of decorations in your closet from the previous year? Be strategic about where to allocate your dollars, scale back when you can, and save for what’s important.
Get Creative with Your Holiday Gifting
One of the most exciting parts of the holiday season is surprising your loved ones with unique, festive gifts picked out just for them. But it’s expensive to buy gifts for all the friends or family members on your list—and the current inflation rate doesn’t make it easier. That’s not exactly conducive to a small budget, is it?
Fear not, though—you can still have presents to wrap and give out this year without spending too much in the process. You’ll just have to think outside the typical stores or online retailers and get creative instead. Check out this “Thrifty Gift Guide” for ideas on how to snag holiday presents both your loved ones and your budget will appreciate.
Rent Your Outfit for Seasonal Parties
After two years of cancelled plans (looking at you, COVID-19), chances are you want to make sure this holiday season is extra memorable with a full calendar of parties and other social events. However, with the return of celebrations also comes another expense to factor in: What will you wear to these events, and how much will an outfit cost?
According to joint research from Lightbox and OnePoll, in holidays past, it was not uncommon to drop as much as $788 on clothes and accessories for a seasonal party look. But for most young adults with bills to pay on a fixed entry-level income, it’s not feasible to purchase a new wardrobe for each of the functions you’ll be attending. This does not mean you can’t still look both festive and fashionable, however—consider using a website such as Rent the Runway to loan a designer outfit, then return it when you’re done with no obligation to purchase.
Look for Alternatives to Holiday Travel
This is also one of the most quintessential times of year for travel, but whether you board a plane to visit the whole family in Chicago, or you’re planning a ski vacation in Colorado, holiday travel often doesn’t come cheap. In fact, more than two in five Americans will spend an average of $1814 on hotels and flights this season, a NerdWallet poll indicates. Furthermore, approximately $1471 of that total expense will be charged on credit cards, the poll notes.
Travelling is a memorable experience, of course, but it’s not worth being in debt over. So if you don’t have the financial means to afford a plane ticket this year, consider fun alternatives closer to home. Many cities and towns have local holiday markets, festivals, light displays, parades, live shows, ice skating rinks and other activities to fill you with the spirit of this season at a fraction of the cost. There’s no place like home for the holidays, right?
Have Fun this Holiday Season Without Breaking the Bank
In your twenties, it’s not always possible to splurge on the holiday season—and that’s alright (in fact, it’s normal). But no matter how small of a budget you’re on, with smart financial planning and these practical strategies, you can still reach maximum holiday cheer, without sacrificing those personal finance resolutions come the New Year.