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The 2021 Guide to Holiday Spending


Supply chain lags, rising inflation, and worker shortages — three phrases that loom darkly over holiday cheer.

As the nation contends with continued aftershocks of the coronavirus pandemic, Americans this year are shopping earlier and planning to spend less on holiday gifts, according to a new survey by Morning Consult commissioned by Personal Capital.

While some news outlets report corporations are driving the lion’s share of price hikes, and others point to federal data showing a major hike in energy costs after a year of yo-yo-ing gas demand — it doesn’t matter at the end of the day. Economic factors hit everyone’s wallet, no matter what.

In the survey, which asked 2,200 Personal Capital users about their plans for the upcoming holiday period this December, 60% of respondents said they plan to cut back on spending.

Most respondents (36%) said they plan to spend less and make fewer individual purchases. Nearly a quarter of respondents (23%) said they will actually spend more this year, but make fewer individual purchases. Another quarter (23%) said they will both spend less and make fewer purchases.

If the past two years have taught Americans anything, it’s that most of us want to prioritize the memories and experiences that count. Ahead are some tips to make this year’s holidays memorable in all the ways that matter.

Plan Ahead

Black Friday came a little early and with a lot less “oomph” this year (again, thanks to supply chain woes). And there’s nothing quite like a pandemic to take the fun out of doorbuster sales.

Inventory is reportedly scarce this year, and you could have already experienced your favorite Amazon sellers’ wares going out of stock. It’s harder to buy last-minute impulse gifts or squeeze in a few extra goodies just for fun — something to think about when planning out your list.

Manage Your Loved Ones’ Expectations

If you’re feeling the squeeze this year, say so. Your friends will probably feel relieved you mentioned it. In the study, more than half (54%) of people said they plan to spend less than $500 in total this holiday season. It’s therefore likely that your loved ones don’t want to spend an arm and a leg, either.

Maybe your friends, family, and coworkers will decide to do a group gift exchange this year. Come to an agreement on a budget that works for everyone. Remember it’s OK to ask to take the pressure off.

Decide to Slow Down

It may sound paradoxical to suggest slowing down during a time when inventory is low and time is running out. But truthfully, we’re more in charge of time than we realize.

Time is more important than money — anyone working from home while also struggling to balance family responsibilities and leisure knows this. Slowing down (combined with planning ahead) helps you avoid stress shopping, racking up high credit card bills, and buying things you regret.

Ideally, you should make your gift list early according to your budget. Add the items to your online shopping cart, double-check the prices (including shipping), and wait a night before you click “purchase.” Waiting can help you avoid paying double shipping and handling costs for any items you forgot.

Create a Warm Environment

If there was a holiday season to embrace hygge, it’s now. For just a few dollars, you can buy tall grocery store candles that burn for hours. And for the cost of one laundry load, you can spruce up your home’s blankets and pillowcases. Crack open the holiday decorations box, put on your favorite seasonal music, and put a pot of fragrant tea on the stove to simmer during the evenings. Whether you’re single or have a house full of kids, take an afternoon to prepare the house for guests (who knows may pop by with a gift?) and make your space feel more inviting.

Track your Spending

If you already use an app like Personal Capital to manage your money, this step will be familiar. Some apps link all your accounts so you can see them in one place, including your investments. But to track your holiday spending specifically, you’ll want to go a little deeper and plan. Some apps let you make a separate budget for an occasion or event, then add every transaction as you buy. Behavioral economists also recommend writing down your purchases on a list with pen and paper at the end of every day. That way you won’t forget those one-off purchases on items like ribbon, cookie sprinkles, and wrapping paper.

Go Minimal with Wrapping and Decor

On that note, why not cut down on both waste and money? Reduce, reuse, and recycle this year by repurposing plain brown shopping bags into decorative hand-drawn gift wrap. Scrap the plastic tinsel and pull out your parent’s or grandparent’s vintage tablecloths. Decorate the house with paper snowflakes cut from scrap paper, and make handmade cards (which people are more likely to keep than generic store-bought ones).

Focus on Connection

It doesn’t cost a lot to create good, quality time. Introduce your friends and family to a card deck like We’re Not Really Strangers (which now has a family edition just in time for the holidays), or your favorite board games from childhood (Scrabble, anyone?). Take your neighbors a plate of cookies or a handmade card, or head outside for caroling. At our core, humans are all pretty simple. We just want to show affection for the people we care about, feel appreciated for who we are, and relax doing the activities that make us happy.

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Author is not a client of Personal Capital Advisors Corporation and is compensated as a freelance writer.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. Compensation not to exceed $500. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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