Procrastinators, beware: You could pay dearly for last-minute holiday shopping this year.
Sure, it’s always smart to spread out the financial pain and start shopping ahead of the holidays, but this year, it may be wiser than usual.
Here are three reasons:
[READ: The Best Time to Buy Everything.]
Supply Chain Issues
What does the supply chain have to do with your holiday shopping? “Our economy continues to feel the impact of COVID,” says Adriana Welsh, an adjunct professor at Moravian University in Bethlehem, Pennsylvania, who teaches an integrated logistics systems class for MBA students. “As importers and exporters are starting to ship goods for the holidays, they are met with container shortages and long delays at the ports.” Welsh is also director of government aftermarket at Curtiss-Wright Corporation, which manufactures products for the commercial, industrial, defense and energy industries. So she is immersed in supply chain issues every day.
Making matters worse for shoppers, Welsh says: “This comes at a time when the U.S. is struggling to meet current logistics demands due to driver and truck shortages.”
The truck and driver shortages preceded COVID-19, but they become more acute as online shopping continues to become more and more popular.
So if you wait to do most of your holiday shopping in December, the odds are decent that you’ll find far more empty shelves than you would expect. It isn’t that nothing will be available to buy, of course; it’s just that some of the gifts you want to purchase may not be available.
Shipping delays stem from supply chain issues, and you should prepare for them. In fact, Scott Price, the president of UPS International, recently told a wire service, “I half-jokingly tell people ‘Order your Christmas presents now because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March.'”
Still, retailers are doing what they can to combat the supply chain issues, says Trae Bodge, a New York City-based lifestyle journalist and shopping consultant who runs the shopping blog TrueTrae.com.
“While retailers are doing their best to shift to air shipping, airports are experiencing delays, too,” she says.
Prices on a range of items have already gone up, and with supply chain issues offering no signs of abating, expect higher prices on gifts and merchandise in general. Welsh predicts that consumers will likely pay 20% to 30% more for the same goods this year versus last year and that electronics and imports will be the most expensive items.
That may sound alarmist, but a glance at the World Container Index, published by Drewry’s, an independent maritime research consultancy, tells the story:
In April 2021, the composite cost of shipping a 40-foot container on eight major east-west routes was a little less than $5,000. By September 2021, the cost was $10,083.84. (Before the pandemic, the cost was less than $2,000.)
It’s not a guarantee that you will save more if you do your holiday shopping now. But if you start looking for deals and buying gifts sooner rather than later, it stands to reason that you’ll probably come out ahead than if you crammed all of your holiday shopping into a few weeks at the end of the year.
So if you’re in the right mindset to start your holiday shopping now — or soon — here are a few strategies to follow:
Start building your holiday shopping list. You don’t necessarily need to run to the store tonight, but Bodge says, “My advice to consumers would be to start building their holiday shopping lists now. If there are very specific items — like a certain popular toy or video game or a pair of shoes that are trending on TikTok, start looking for those items ASAP.”
But you can prioritize some other items lower on your list.
“For more general items, like scented candles, throw blankets, entertaining items, or crafts, you can wait a bit. Start looking for deals around Black Friday and Cyber Monday and into December like you normally would,” Bodge says.
Be realistic about your budget. Your personal budget for the holidays should reflect your financial reality, says Chance Robinson, president of Strong Point Financial, a financial services firm in Orlando, Florida.
“No matter how well-intended, our desires cannot be mistaken for our ability to spend wildly,” Robinson says.
Of course, we all know we shouldn’t overspend during the holidays, and many of us do it anyway. Still, we have been warned.
If you’re planning to use credit, crunch the numbers first. Use credit cards in a “very measured way,” Robinson stresses. “Before pulling out that little plastic card, make sure you know which interest rate your bank is charging you for financing outstanding balances. Sure, you will be able to pay it later and in monthly payments, but you will have to pay at one point.”
And, of course, plenty of people pay off their credit cards every month. If you have a cash back credit card, you might end up faring pretty well. You might even want to apply for a new credit card that offers an 0% APR introductory period, and then you might be able to get a window of six to 12 to even 18 months to pay off holiday debt. That said, if you need 18 months to pay off holiday debt, you are probably severely overspending.
As always, look for deals. You may think you’ll pay more if you shop before Black Friday sales, but that’s not necessarily the case, Bodge says.
“Just because you are buying early doesn’t mean you have to pay full price,” she says.
She suggests checking out a few shopping apps, browser extensions and websites, including:
— Slickdeals.net. Set deal alerts using this site for specific items on your gift list. “That way, you’ll be notified when that item goes on sale,” Bodge says.
— Cently. This is a browser extension from CouponFollow.com, Bodge says. “Once installed, Cently will alert you to available savings as you browse and even find and apply coupons for you at checkout,” she says.
— CouponCabin.com. If you shop inside a store, Bodge says a cash-back app such as CouponCabin can help you earn cash at participating retailers. “The CouponCabin app also has coupons that can be scanned at checkout,” she says.
Look at the bright side. Having to suddenly think about holiday shopping may seem kind of stressful, but you may end up reducing a lot of the year-end stress by starting your shopping now. As Bodge says, “Just think: The beauty of shopping early is that you can spread out your monthly financial outlay and you can avoid holiday crowds.”
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