Will Inflation Cast Cloudy Outlook on Christmas?

Even though inflation has slowed slightly, it will still have a huge impact on consumers' holiday gift giving and shopping in general. Even if we don't hit the almost inevitable recession looming over December and into 2023.

Going into Black Friday last month, many retailers were predicting at least soft declines in sales. Surprisingly, the numbers went the other direction – at least online. While gains were far short of previous year-to-year comparisons, an estimated 9.1 billion dollars was spent online over the long Thanksgiving weekend, up 2.3% from 2021.

What is Happening?

Inflation hit an all-time high this year, cutting people's savings and decreasing retirement plans. With everything going on, many people are stressed about stretching their wallets.

While the National Bureau of Economic Research (NBER) has yet to declare an official recession, signs are still strong that we're headed in that direction as well. More than 100,000 employees have been laid off from startups this year. A Bloomberg News survey of 40 economists in late October 2022 found that 75% expected a recession in the next 24 months. From a worldwide perspective, the International Monetary Fund forecast in mid-October that “the worst is yet to come, and for many people, 2023 will feel like a recession.”

Prepare for Battle

With the gloomy economy, many shoppers are uncertain about their holiday spending. While inflation and the potential recession run their course, consumers are finding ways to make smart money moves to their buys. Inflation and the recession are not things you can control, so focus on what you can – managing your finances.

Start with a Plan

You wouldn't start a war without a plan in hand, would you? Make a list of everyone you need or want to buy gifts for. Prioritize purchases and spending limits, so you ensure you have enough to cover the must-buys, instead of impulse buying and falling short. If you're going to be shopping and saving online, try using browser extensions that can help maximize your discounts and take advantage of cashback sites.

If you make a list of items you want or need, you can compare prices when deals start rolling out. You know ahead of time what you're looking for and can see the price difference. Planning helps limit overspending, saving you lots of money.

Cut Spending

Some people need to tighten their belts and watch their spending more closely. If you want or need to cut your spending, there are multiple strategies you can implement in your life. Try these cost-cutting measures:

• Look for sales, use coupons, and buy in bulk
• Save gasoline by combining errands into one trip
• Carpool to/from work
• Reduce or eliminate restaurant meals or fast-food deliveries
• Plan smaller-scale vacations, staycations, or temporarily postpone vacations
• Postpone expensive purchases that may require a large payment or borrowing credit

Stop Swiping

For those who carry more than one credit card or carry a large credit card balance from one month to the next, rising interest rates can be crippling.

Some smart consumers made paying down debt a higher priority months ago when interest rates began to climb. Maybe you didn't. Regardless, strategies to use now include paying down either the highest balance or the smallest balance to eliminate that particular monthly payment. If you can, don't add more debt by swiping your credit card more.

Join Loyalty Programs & Shop Around

There are many free loyalty programs out there, so sign up for those to get deals, exclusive offers, and more. You want to take advantage of these amazing sales or promotions. Who says you have to pay the original price? If you can save a dollar or three, you can use that dollar or three for something else.

Many retail stores offer similar items with the same deals, but there will always be one store that makes buying a better choice. You may find something at Kohl's that you like, but Target sells the same item. If you are a frequent shopper at Target, the Target RedCard saves 5%, making it a better perk.

Set up notifications when a deal or sale is going on at your favorite stores. If you can get your favorite things and still save money that's a win-win. Just don't forget to switch those alerts off once you've gotten what you need so you're not tempted to spend more money.

Use Cashback Apps

In addition to credit cards, apps like Fetch, Sweatcoins, Swagbucks, and Rakuten can help you earn some money back. People love to have free money to spend on their holiday shopping. It's never too late to start adding these apps to your phone.

Let’s Become Savvy Shoppers

The extent of Black Friday shopping is a personal decision. Consumers will each determine how much their financial situation will allow them to spend this year compared to previous years. With good planning (making a list, researching online beforehand, and sticking to a budget), Black Friday shopping can be successful without going overboard in spending. Whatever situation you are in, remember to shop smartly!

The article was produced by The Money Dreamer and syndicated by Wealth of Geeks.

source https://wealthofgeeks.com/will-inflation-cast-cloudy-outlook-on-christmas/