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Americans Say Inflation Will Change How They Shop For The Holidays

While there are still a few months until the start of the 2022 holiday season, that hasn’t stopped some consumers from thinking about getting their Christmas shopping started. Adding to the usual stress associated with finding the perfect gifts for loved ones, a recent spike in the prices of everyday items is causing many potential buyers to reconsider their holiday spending — and how much they can really afford to spend on gifts.

According to a recent Bankrate survey, two in five (40%) respondents said inflation will change the way they shop for the holidays this year.

Recent results from the US Bureau of Labor Statistics Summary of Consumer Price Indexes also showed that the home groceries index, which reflects how much you pay for groceries, rose 13.5% over the past year. A rise in grocery store prices could also mean that holiday meals are more expensive this year than last year. The price of clothing, often a popular choice for Christmas gifts, is also up 5.2% year-on-year.

With that in mind, it makes sense that 84% of holiday shoppers surveyed in the Bankrate survey said they would try to save money this year, with 40% saying they would buy fewer items, 21% saying they would give gifts are buying from cheaper brands and 41% said they would look for coupons, sales and other discounts. 17% of Christmas shoppers said they would give more DIY gifts, while another 11% said they would give used or second-hand items. 17% of respondents said they would use credit card rewards to offset expenses, while 27% said they would start shopping sooner than in previous years.

Below, Select offers some quick tips that could help you save some money if you’re worried about stretching your holiday shopping budget this year.

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Create a sinking fund for Christmas shopping

With the holiday season just a few months away, it’s not too late to round up some extra cash for your shopping. A sinking fund is an amount of money that you can set aside for a specific purpose, such as B. for a holiday or in this case for the purchase of Christmas presents.

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A declining fund can help you avoid this raid your other savings accounts to pay for holiday-related expenses. Make your contribution goals feel achievable by choosing a smaller amount of money each week to put into your sinking fund. For example, if you start saving $20 each week to buy Christmas gifts, you would have saved $240 by December. Depending on how much you need to shop for, $240 might seem like a drop in the ocean, but a little can still go a long way.

It’s a good idea to put the money from Christmas shopping into a high-yielding savings account, as they tend to pay significantly higher amounts of interest — admittedly, you’re not making hundreds of dollars a month in interest, but you’re still making more than you would on one traditional savings account.

Goldman Sachs’ Marcus offers a high-yielding savings account that doesn’t charge monthly fees, excessive transaction fees, or overdraft fees. While there is no minimum deposit required to open the account, you do need at least a $1 balance to earn interest.

Marcus from Goldman Sachs High Yield Online Savings

Goldman Sachs Bank USA is a member of the FDIC.

  • Annual Percentage Return (APY)

  • minimum balance

    None to open; $1 to earn interest

  • monthly fee

  • Maximum Transactions

    Up to 6 free withdrawals or transfers per billing cycle *The 6/statement withdrawal limit is being waived during the Coronavirus outbreak under Regulation D

  • Excessive transaction fee

  • overdraft fees

  • Offer checking account?

  • Offer ATM card?

Select also ranked SoFi Checking and Savings as the best high-yield savings account with a welcome bonus. Once you set up and start direct deposits, you can earn anywhere from $50 to $300 depending on the amounts of direct deposits made over a 30 day period. This extra money could also be used to help cover the cost of Christmas shopping this year.

SoFi check and savings

Information about Sofi Checking and Savings has been collected independently from Select and has not been verified or provided by the issuer prior to publication.

  • monthly fee

  • Minimum deposit to open

  • minimum balance

  • Annual Percentage Return (APY)

    Direct deposit members earn 1.80% APY. Non-direct deposit members receive 1.00% APY.

  • Free ATM network

    Over 55,000 toll-free ATMs on the Allpoint® network

  • ATM fee refund

  • overdraft fee

    No-charge overdraft coverage is available; However, SoFi requires $1,000 in monthly direct deposit streams to unlock it

  • Mobile Check Deposit

Try stacking rewards to earn as much cashback as possible

Rakuten

Information about Rakuten was collected independently from Select and was not verified or provided by the company prior to publication.

  • Costs

  • This is how you save

    Get cashback on eligible purchases, automatic coupons and price comparisons.

  • how to use it

    Shop on Rakuten.com, the Rakuten app or install the browser extension.

  • Here’s how you get your savings

    Cashback is given every 3 months by check or PayPal payment.

When it comes to credit cards, the Citi® Double Cash Card gives you 2% cashback: 1% on all eligible purchases and an additional 1% after you pay your credit card bill. The card has no annual fee and offers an introductory APR offer, giving you flexibility when purchasing.

Alternatively, American Express’ Blue Cash Preferred® Card allows you to earn cashback in multiple categories, including 6% cashback at US supermarkets (up to $6,000 per year; then 1% cashback), 6% cashback on select US streaming Subscriptions, 3% cashback at US gas stations and on transit trips, and 1% cashback on everything else. Note that the cashback can be redeemed as a statement credit.

Citi® Double Cash Card

  • Reward

    2% Cashback: 1% on all qualifying purchases and an additional 1% after paying your credit card bill

  • welcome bonus

    For a limited time, earn $200 cashback after spending $1,500 on purchases in the first 6 months of account opening.

  • Annual fee

  • Introduction APR

    0% for the first 18 months on balance transfers; N/A for purchases

  • Regular APR

  • transfer fee

    Prepaid transfers made within 4 months of account opening will incur a prepaid transfer fee of 3% of each transfer ($5 minimum). After that, a transfer fee of 5% of each transfer (minimum $5) will apply

  • foreign transaction fee

  • credit needed

American Express Blue Cash Preferred® card

  • Reward

    6% cashback at US supermarkets on purchases up to $6,000 per year (1% thereafter), 6% cashback on select US streaming subscriptions, 3% cashback at US gas stations, 3% cashback on trips including taxis/ Rideshare, Parking, Tolls, Trains, Buses and more and 1% cashback on other purchases. Cash back comes in the form of Reward Dollars, which can be redeemed as a statement credit.

  • welcome bonus

    Earn $350 in credit after spending $3,000 on purchases with your new card within the first 6 months.

  • Annual fee

  • Introduction APR

    0% for 12 months on purchases and fund transfers from account opening date

  • Regular APR

  • transfer fee

    Either $5 or 3% of the amount of each transfer, whichever is greater.

  • foreign transaction fee

  • credit needed

Don’t wait until the last minute

By planning your purchases in advance, you can create a solid estimate of how much money you’ll actually be spending for the holidays. This also helps you determine exactly how much money you should have in your sinking fund so you can set a specific goal to work towards.

Additionally, if you wait until the last minute to start shopping, you run the risk of having to pay extra for expedited shipping and getting stuck buying super expensive items just so you can have a gift.

Start by jotting down a list of everyone you want to buy a gift for and some potential ideas for each — and don’t forget to include any Christmas decorations or other items you might need. That way, you can start keeping an eye on prices early on so you can hit the buy button when you know the product you want is on sale or there is another money-saving offer you can take advantage of .

Check out Select’s in-depth coverage of personal finance, technology and tools, wellbeing and more, and keep following us Facebook, Instagram and Twitter to stay up to date.

Editorial note: Any opinion, analysis, review, or recommendation expressed in this article is solely that of Select’s editorial team and has not been reviewed, approved, or otherwise endorsed by any third party.

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