How to Prep Your Holiday Budget for Rising Prices

Black Friday is right around the corner. As tariffs and inflation threaten to drive up prices on holiday gifts and other seasonal expenses, it’s more important than ever to prep your holiday budget to avoid debt and manage spending. A study for BankRate found that 41% of consumers are concerned that holiday gifts will be more expensive this year and 27% expect to spend more this holiday season than last.

Here are 3 simple money moves to prep your budget for rising holiday prices.

1. Get your gifting game-plan ready.

Planning your spending budget ahead of your holiday shopping sprints is key to avoiding debt. To begin, think about who you want to buy gifts for, what you want to buy and how much you can afford to spend. Once you have a detailed gift list, set a budget per person and start tracking prices on gifts so you can snag deals before tariffs kicks in. Not to mention, shopping early allows you to spread out purchases over several weeks leading up to the holidays to manage your cash flow abetter. Plus, it is a good idea to take advantage of the Black Friday deals that have already started.

Track your gift purchases and budget using the Santa’s Bag app and set sale alerts for the gifts on your shopping list using Karma, a web extension that allows you to monitor price drops when you add items to a wish list so you don’t miss out on a limited-time deal.

2.  Pay down debt.

Recent spending can quickly spiral out of control, but ignoring your credit card balances ahead of the holidays can lead to unmanageable debt in the New Year. While paying down balances should be a priority, a better option now is to transfer your balance using a balance transfer card. These cards offer 0% interest for up to 21 months, buying you time to get through the holidays without interest fees piling up.

This means, you can make smaller monthly payments through January in order to afford gifts and other seasonal and then commit to a more aggressive debt repayment approach in the new year. 

Compare balance transfer credit cards at site like CardRates.com and look for the longest no-interest period.

3. Automate weekly savings.

It’s never too late to save for the holidays. Where you save is important to consider, too.  Use a high yield savings account to make your holiday savings work harder for you as these accounts pay higher interest rates than traditional savings accounts. For example, Bread Savings offers 4.25% annual percentage yield while a traditional savings account offers an average of 0.46% APY.

If you’re struggling to come up with savings, be encouraged. Perhaps you can take a few minutes to review monthly bills to ensure that you aren't overpaying for services. You might easily uncover around $1,000 in your current monthly budget by negotiating rates. Also look for ways to increase your income by selling items that you no longer use. There are so many opportunities to succeed in generating cash for your holiday shopping.

Words by Andrea Woroch