Skimm Money: Holiday Spending, Inverted Yield Curve, and Credit Card Bonuses

How the news affects your finances.

Holiday Spending

The average American shopper is expected to drop about $1,652 on all things holiday-related this year, according to a recent survey conducted by the consulting firm Deloitte. Which could put more strain on already stretched budgets. See: Still-high inflation and high interest rates (hello, steep credit card bills). Not to mention, recently restarted student loan payments. So, how can you keep your finances in check this holiday season without skimping on the joy?

Your move:

• Set your boundaries. Establish your budget, and set expectations with your family, friends, and loved ones. Will you be exchanging gifts? Are you planning on traveling to attend events with loved ones? Know what you’re willing (and able) to spend and clearly communicate that with the people in your life.

• Start a sinking fund. Once you’ve set your budget and boundaries, start planning ahead for anticipated costs, like gifts and travel expenses. You can use a sinking fund calculator, like this one, to figure out exactly how much $$$ you should set aside over the coming weeks so you have the funds you need. 

• Use credit card rewards. Instead of spending cash on things like gifts and travel, put your points and miles to good use. Ex: If you have a ton of Amazon points, use ‘em to purchase presents for loved ones. And if you’re traveling over the holidays, points or miles can help you save big on flights and hotels.

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Think: Extra points or cashback rewards. To get these perks, typically, you have to spend a certain amount of $$$ over a set period of time. Which is why the pricey holiday season (hello, gifting and traveling) can be a great time to take advantage of generous credit card sign-up bonuses. That said, be sure to pay your credit card balance in full each month. If you don’t, those costly bills (thanks, high interest rates) will outweigh the benefits of any perks or points.

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