If you've just spent the past few days putting away your decorations and even the mention of gift wrap makes you a little queasy, then you're probably not thinking about planning for the next holiday season. After all, you haven't even finished paying off your presents yet – and aren't those bills coming due pretty soon?
Even though the next round of celebrations are months away, now is a great time to start planning for the next holiday shopping season. That's because with the right prep work and help from rewards credit cards, your next holiday season can be smoother and less stressful than ever before.
Developing a holiday savings plan early in the year presents an ideal opportunity to assess how your last holiday went while the details are fresh in your mind. Add up how much you spent, analyze where you may have gone over your holiday budget, and think of ways you can do things better next time. By creating an attack plan early, you may have an easier time relaxing at the holidays – especially if you can shop without incurring debt because you've spent all year earning cash back and using a travel rewards credit card.
"It's valuable to look back on the 2016 holiday season and see where you feel like you came up short," says Beverly Harzog, credit card expert and author of The Debt Escape Plan. "Maybe you ran out of money or out of ideas. You can bring that forward into the new year and keep that in mind."
Used responsibly and with intention, cash back credit cards and travel rewards credit cards can be a useful part of your holiday shopping strategy. To maximize your cash back and rewards benefits, always pay your bills on time and avoid carrying balances.
"Carrying balances means you'll be paying interest, which essentially causes you to fund your own rewards," says John Ulzheimer, credit card expert and author of The Smart Consumer's Guide to Good Credit. "The best practice for rewards card users is to use your cards for things you're going to buy anyway, and then pay the balance in full each month."
In other words, the best way to earn cash back or travel rewards is to use your credit card for as much of your day–to–day spending as possible, assuming that you don't overspend and can repay the balance without difficulty. Look for a credit card that offers the most cash back or rewards for the categories you spend in most frequently. "Think carefully about how you spend your money," Harzog says. "If you travel or dine out often, for instance, look for a rewards credit card that offers extra points or cash back for that spending."
If you do this all year long, you may be able to amass enough points or cash back to make a sizable difference in December. You might earn enough to cover airline tickets for holiday travel, or enough cash back to cover a big chunk of your holiday bills. "It's not inconceivable for your card usage over the next 12 months to help you fund some or all of your 2017 holiday shopping," Ulzheimer says.
Your best bet is to read your terms and conditions carefully so you understand how you earn points or cash back – and pay attention to program changes and promotions, which can happen at any time.
Depending on the credit card, there may be periods when the card issuer offers greater rewards in certain categories or at certain retailers. For example, using a credit card at certain retailers might yield higher cash back rewards, or booking on certain airlines might earn more credit card miles. "If you do have a card that has rotating categories, it's really important to stay on top of that and sign up for them," Harzog says. "You can really maximize your cash back."
That means registering for emails from your card issuer that will alert you to program incentives or changes, and visiting the card issuer's website regularly to check for deals.
As you spend throughout the year, make sure you're paying your credit card bills on time and following all terms and conditions, since failing to do so could result in losing your accumulated rewards or miles.
Maximizing credit card rewards and loyalty programs early in the year can help boost your holiday buying power, but it's also important to create a smart spending strategy. This year, you can:
Create a realistic budget plan. If you aren't sure how much you spent on last year's holidays, go through your last few credit card statements and highlight all your holiday-related expenditures. If it's more than you hoped to spend, think about how you could reasonably cut back this year. (Maybe you don't need a gift for every cousin?) Once you have a ballpark figure for 2017, you can spend the next several months maximizing your credit card rewards and hunting down the best deals.
Keep a running list of gift ideas. Sometimes you think of the perfect present for someone in April. Sometimes your mom throws out the best idea in June. Do yourself a favor and pay attention all year long to your loved ones' preferences, and keep a list on your smartphone when you think of one. You'll be prepared to jump on things when they go on sale, and you'll be less stressed as the holidays approach because you'll know what you want to buy.
Pay attention to pricing. It's hard to know whether you're getting a great deal on something if you aren't sure what it costs regularly. Make it a habit to note prices throughout the year so your internal "deal radar" will go off when a price drops significantly. You'll also have an easier time buying hard–to–find merchandise that might otherwise sell out.
Buy off–season. If there are things you know you'll need, try to buy them on deep discount, such as wrapping paper and seasonal decorations after the holidays end. Just make sure you keep track of where you put them. It's frustrating to know you have wrapping paper somewhere in the house – if only you could remember where you put it.
Read return policies. Early holiday shopping can alleviate a lot of stress, but if the holidays are months away, be careful about buying items that can't be returned. That "final sale" sweater might be a great deal, but if the gift recipient can't bring it back if he doesn't like it, you may want to move on.
Save your receipts. Designate a central location – a file folder in your kitchen or in a desk drawer, for instance – for all your holiday shopping receipts. If someone needs to exchange something or you need to take something back, you'll be able to find it in a hurry.
There are a variety of other benefits of saving and shopping early. For instance, you won't experience the holiday crowds if you're shopping in August, and you won't have to worry about a retailer running out of gift boxes in December. Instead, you'll be able to enjoy the best parts of the season – such as time with friends and favorite family traditions – without being stressed about an overburdened budget and an overscheduled calendar.
In fact, you just may find that your biggest issue is how jealous your loved ones are that you've been so organized all year. Relax and enjoy it – you've earned some time off.