How to prepare your finances for holiday spending

‘Tis the season to be shopping! According to the National Retail Federation, Americans are expected to spend nearly $990 billion in November and December alone – an increase of 3.5 percent year-over-year. 

While the average holiday shopper is estimated to spend over $2,100 this winter, Empeople members are uniquely positioned to save while they spend. We’re helping you prepare for holiday spending by giving you tips to maximize your rewards and keep your accounts safe. 

Maximize your credit card rewards 

Using your credit cards to shop can be one of the smartest money moves you make during the holiday season. If you’ve got a good handle on your credit and debt, using a rewards credit card can be an excellent way to earn rewards points and cash back during the busiest shopping season. Here are a few ideas on strategic ways to utilize your credit card perks. 

Redeem rewards points for gift cards 

Cashing out rewards points for gift cards takes the guess work out of tricky gifting. It can be difficult to shop for little ones, for coworkers, or for “white elephant” games. Opting for gift cards ensures your friends and family can get something they’ll actually use. 

Here are some clever ideas for points redemption: 

1. Redeem points for a restaurant gift card for new parents in desperate need of a dinner date. 

1. Cash out rewards for a local coffee shop gift card to treat a teacher who has been working extra hard this year. 

1. Use points to buy multiple small gift cards to tip your local mail carriers, healthcare workers, and the dog walker. 

Pro tip: Did you know you can give gift cards to your favorite charities as well? Donating gift cards is an excellent way to ensure organizations have everything they need to support their cause. Your donation may even be tax deductible – speak to your tax or financial advisor to learn more. 

Spend cashback rewards on holiday expenses 

It can be difficult to accurately anticipate just how much you’ll spend on holiday celebrations. While it’s easier to set a budget for gifting, we often forget important categories like groceries, extra gas pump visits, flight costs and even decorations. Consider using your Empeople Signature Visa cashback rewards to purchase travel amenities or deck the halls. 

Using the cash to pay bills, loans, credit card payments, or as your holiday fund can help your budget stay on track to start the new year strong. 

Keep your account secure and stay up to date on scams 

Phishing and scamming attempts have been known to rise exponentially during the winter months. It’s easier for criminal transactions to slide under the radar with increased consumer spending during the holidays. 

The Federal Trade Commission warns that one of the most prevalent holiday scams involves gift cards. Scammers will notify you by phone, email, or text, saying you’ve won a prize. They then ask you to send a gift card to cover associated fees of the prize. No reputable business will ever make you buy a gift card to redeem a prize.  

Pro tip: Stop and think first, “Did I even register for a prize?” Never send money or provide account information to redeem a prize.  

Setting heightened account alerts is another way to stay vigilant during a season of increased transactions. Setting up card controls in Empeople Digital Banking allows you to lock or unlock your Empeople debit or credit card in seconds. This feature is helpful in the case of a lost or stolen wallet. 

You can also set limits for your card(s) that trigger alerts and block transactions above a certain spending threshold. Additionally, you can set alerts for a specific transaction or merchant type, deciding which should be automatically allowed or denied.  

Finally, it is a smart move to set up fraud alerts. Fraud alerts help you to manage your account activity and quickly identify potentially fraudulent transactions. Empeople automatically activates fraud alerts when you provide us with your mobile number. In the case of fraudulent activity, you’ll receive automated alerts via text messaging and/or pre-recorded digital voice phone calls. 

Budget for next year’s holiday season now 

New Years is the perfect time to solidify financial goals and start financial planning for the next holiday season. While it’s top-of-mind (and top-of-statement), make a list of your recent holiday expenses, including gifts, charitable donations, and the hidden expenses as outlined above. Add up how much you spent to calculate a good starting place for the coming year’s holiday budget. 

Were you successful in paying off rewards credit card purchases to sidestep high-interest credit card debt? Did you successfully stick to gifting limits, or did you surpass what you expected to spend? 

There’s no better time than the present to start saving for the coming year’s festivities. Opening a specific savings account for holiday spending can help you to accumulate funds, little by little, so the holidays feel less burdensome on your budget. 

Consider opening a high-yield savings account to serve as your holiday account. From there, set up automatic transfers right from your paycheck – even $20 a paycheck can really make a difference! Whatever you don’t use on holiday spending will have earned interest the entire year, and you can transfer whatever isn’t spent to your emergency fund after the holidays. 

The winter months are a time for celebration, rest and relaxation. Don’t let your finances be a speedbump on the road to a peaceful holiday season. Taking measures to secure your accounts and stay within your budget are all important aspects of financial self-care that will set you up for success in the New Year.