The holiday season is always a little chaotic; the sprint to finish last-minute errands, late-night present wrapping, or squeezing in a seat for an unexpected dinner guest. Previous years sometimes brought a few stressors, but overall, the pure joy felt during the holidays prevailed over any minor bumps or snags along the way.
In early October, One conducted an online survey among 756 adults to get a temperature check on how people felt about the upcoming 2020 holiday season. The data backed up our gut feeling. This year will be different; it will be more subdued across the board. A few major takeaways were that 51% of survey respondents plan to spend less on holiday gifts in 2020 than they did in 2019. Along with reigning in holiday spending, 65% felt that the Covid-19 pandemic would significantly affect their holiday gift-giving.
It would be an unreasonable request for us to expect the magic surrounding the holidays to fix everything that 2020 has thrown at us. This year has been the definition of unprecedented. Financially stretched households are at a breaking point, and everyone is feeling the mounting stress around affording gifts and holiday expenses compared to previous holiday seasons.
Thankfully, there are ways to celebrate the holidays within our new budgets while still saving for the future. We’ve pulled together our top five financial tips to help you prepare for the holiday shopping season and keep it full of joy.
1. Save while you spend
By activating card Auto-Save in the One app, you’ll be putting aside savings every time you shop. Every purchase made with your One Card* is rounded up with the difference taken from your Spend Pocket then transferred to your Auto-Save Pocket. You’ll earn 3.00% APY** in your Auto-Save Pocket! Saving in small doses is painless and helps build up your savings without having to put away a lump sum all at once. Here’s how card Auto-Save works:
2. Create a holiday spending budget (and stick to it)
Take a moment to assess your finances if your income or employment has changed in the past year. Create a new Pocket to help set your holiday spending budget before the season officially kicks off. By making a holiday Pocket to spend from, you’ll ensure that you stick with it and steer clear of credit card statement shock later on.
3. Split gifts with friends and family
Our survey showed about 49% will be buying less expensive gifts, 46% will be giving fewer gifts to each person, and the remaining reported their gift-giving would be to a smaller group than usual. Holiday gift-giving doesn’t have to be canceled altogether. Instead, we recommend creating a shared Pocket to split the cost of a single gift with someone versus paying for it alone. You’ll still be able to give while not stretching your budget too thin.
4. Use debit instead of credit
A troubling survey finding was that 56% of survey responders plan to use all credit or a substantial portion of credit to make their holiday purchases this year. The pressure to bring the holiday memories of 2019 in 2020 is pushing people to rely on expensive credit versus adjusting their holiday spending budget to their current finances. Creating a custom holiday Pocket to shop from will ensure you are spending as debit only and not overspending with money that isn’t there.
5. Recognize this year will be different
What a rollercoaster it’s been. We’re all looking forward to better times, but we’re not quite there yet. Let’s all take a deep breath and recognize this holiday season will not be like previous ones. We’ll adjust our traditions this year and focus on enjoying the time together (whether in person, over a computer, or through the phone) with the people we love most.
Your financial wellness is our focus. Sign up for a One account to help automatically build your savings while getting ready for the holiday season.
Banking Services provided by Coastal Community Bank, Member FDIC.
The One card is issued by Coastal Community Bank, Member FDIC, pursuant to license by Mastercard International.
**Annual Percentage Yield effective 9/1/2020 and subject to change.
*Survey methodology: This survey was conducted online within the United States by One Finance using the Survey Monkey platform the week of Oct 12, 2020 among 756 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact firstname.lastname@example.org.