No one wants to feel constrained, especially during the winter holidays. From gift-giving to entertaining, this is one of the most generous seasons of the year. When money is tight, however, it’s common for anxiety to take over.
A 2024 Theatro holiday shopping survey found that 67% of U.S. consumers are stressed about holiday spending this year. After all, there’s so much to buy, and prices on many things have escalated. With a fixed sum to go around, you may be forced to trim your list.
[READ: 10 Ways to Sidestep Holiday Financial Stress]
Or, is there another way?
You could break free of financial limitations, stick to your budget and avoid a sense of deprivation by embracing the newest shopping trend.
Called “stretch theory,” this approach focuses on exploiting as many cost-lowering actions as possible. You’ll get more of what you want and feel joyful about your transactions — during the holidays and all year-round.
Don’t Contract Your Spending, Expand the Deals
Rakuten, a cash back and rewards platform, conducted its annual survey about the state of shopping and saving, and made an interesting discovery.
In 2024, 58% of consumers say they are willing to spend more on gifts during the holidays when they are confident that they have saved money and scored the best deals.
Instead of overspending or doing without, the majority of consumers prefer to push themselves to find ways to lower the prices on the items they want. This way, they aren’t contracting their spending but extending it. The strategy triggers a sense of accomplishment and abundance.
[Read: Inside the Psychology of Overspending and How to Stop.]
Rakuten coined the phenomenon “stretch theory.”
“This season, shoppers are focused less on keeping saved dollars in their pocket and more about stretching them further and getting the best bang for their buck overall,” Rakuten’s shopping and trend advisor, Bella Gerard, said in an email .
“Hence the name stretch theory. Consumers will shop more if they feel like they’ve already gotten great deals and taken advantage of savings,” she added.
How to Put Stretch Theory Into Practice
The stretch theory shopping method involves spending on what you want by tapping into as many cost-cutting techniques as possible. For example:
— Compare prices from a variety of retailers using free apps like Google Shopping and Shopzilla.
— Be attuned to upcoming sales and buy when the price is lowest.
— Sign up for retailers’ loyalty programs for extra discounts and early access to sales.
— Use free shopping platforms that enable you to earn cash back on the purchase.
— Find and apply promo codes to get an instant discount.
— Pay with a cash back credit card, then use the earned money as a statement credit.
— Open a cash back credit card that comes with a sign-up bonus, make all your purchases with it to meet the minimum spend, then use the bonus to reduce the total cost of your purchases
Maybe you want to buy a bicycle with an original retail price of $500. Find it on sale for $400. An instant 20% off promo code drops the price to $320. You pay for it with a credit card offering 2% cash back and purchase from a shopping platform giving 5% cash back, so you get a total of 7% cash back — resulting in earning $22.40. The final net price for the bike: $297.60. That leaves you with $202.40 to spend on something else on your list.
Stretch theory does require preplanning but the savings are worth the effort, says Trae Bodge, New York-based smart shopping expert at TrueTrae.com. By stacking rewards and zeroing in on rock-bottom prices you’ll end up with much more buying power.
“First, look for a retailer sale,” Bodge says.
“Make sure you belong to that retailer’s free loyalty program for extra savings and the opportunity to earn points towards cash back or free stuff. Then, use a deal site to look for cash back offers or coupons.
Many of these sites — Rakuten, Honey, CouponCabin — have browser extensions that will automatically seek out these savings as you browse,” she adds.
[Related:Best Coupon Sites, Browser Extensions and Apps]
Credit cards that offer cash back are great, but reward-rich debit cards can expand stretch theory’s limits without risking getting into expensive consumer debt.
For example, PayPal’s new debit card, which you can apply for and use online almost immediately, allows you to earn 5% cash back up to $1,000 in one category per month.
“So, say you have tech purchases planned this month, select ‘tech’ as your category,” Bodge says. “Then, potentially save even more by using offers in the PayPal app for your favorite tech retailer.”
Who Is Playing — and Winning — the Stretch Theory Game
Stretch theory shopping is like a game of “how low can you go” to walk away with the prize. And, according to Gerard, younger shoppers are especially good at it.
“Gen Z has a reputation for spearheading new fashion trends, so it shouldn’t surprise us to see them leaning into new shopping trends as well,” she says. “They’re all in on stretch theory, with 76% of Gen Zers surveyed saying they’ll buy more gifts if they feel like they’ve saved a lot of money.”
People in older age groups are also on board, but are adopting it at a slower pace. Rakutan’s survey found that 70% of millennials, 55% of Gen X and 41% of baby boomers are maximizing their spending dollars this way.
Don’t Let Overstretching Lead to Financial Injury
The first and most important step is to know how much you are willing to spend, based on your budget and other goals. Scoring the best price on things you want is fantastic, but still has to be a healthy financial decision.
“Don’t let a few good sales and savings opportunities make you lose sight of your overall spending limit,” Gerard says. “Stretch theory definitely tempts consumers to shop more, but it’s up to them to ensure they don’t overdo it.”
Before holiday shopping, create a list of recipients and gift ideas, and decide how much you want to spend on each.
“Add yourself to that list — with a spending cap — so you don’t overdo the self-gifting, and stay on budget overall,” Bodge says. To stay on track, she uses the Notes app on her phone. That way, the list is always with her, which helps avoid confusion.
There also comes a time when you can overdo trying to get the absolute lowest price, too. Pay attention to how you are feeling.
“If you’re fatigued, stop,” says Erika Wasserman, a certified financial therapist from South Florida. “You won’t make good decisions. Take a break, eat and start again tomorrow.”
Why Stretch Theory Is Made for Holiday Shopping
“The holidays can feel like a pop quiz you’re not prepared for,” Wasserman says. “But you know it always comes up, so don’t wait until the last minute. Because stretch theory is all about preparation, it’s a good way to switch it up so shopping doesn’t feel so stressful.”
The Rakuten survey found that half of millennials and 40% of Gen Z shoppers plan to utilize cash back offers this holiday season.
“So, these folks will definitely be saving more than usual, especially since sales and retailer discounts can be stacked on top of cash back,” Gerard says.
“Therefore, these shoppers will be able to stretch their dollars further, but it’s up to them how they use it, be it buying more gifts for others or treating themselves to some items on their wish lists. Either way, it’s a win-win,” she adds.
In the end, stretch theory may not be as revolutionary as it sounds.
“I’ve shopped this way for years, and do so all year long,” Bodge says. “I am always urging other shoppers to do the same. Once you get into the habit, it becomes second nature.”
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What Is Stretch Theory and How Can It Help You Save? originally appeared on usnews.com
