A recent Bank of America survey reveals that 62% of consumers are bracing for the financial strain around holiday expenses. Mary Hines Droesch, head of product for Consumer, Business and Wealth Management Banking and Lending at Bank of America, joined TheStreet to discuss her best tips for navigating this holiday season without breaking the bank.
Related: How to avoid credit card debt this holiday shopping season
Full Video Transcript Below:
CONWAY GITTENS: 62% of Americans anticipate financial strain around holiday expenses. So what are your best tips for budgeting wisely to avoid overspending or making unnecessary purchases?
MARY HINES DROESCH: Yes And we ask in that survey where they’re feeling the strain, they also 59% said they’re going to make the most of their money by shopping at discount stores. So get the deals, but go to warehouse stores, discount stores that can really help your money go further. And that’s why we have Cyber Monday is the day, and Black Friday are the days that our consumers say they’re going to spend the most on is really to get those deals. You also should use a rewards credit card as that enables you to get rewarded for your poem, which you can use to then pay off some of that holiday spend after the fact. In fact, our survey said that 40% of the clients that we surveyed plan on using rewards to offset their purchases. So we at Bank of America have a customized cash rewards card where you can get 3% back on select categories that you get to pick. Online shopping is one of them. So it’s just a great way to make the most of your money.
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CONWAY GITTENS: So take me back to that 62% because I always like to have some kind of comparison. Is that better than in previous years. Is that worse than previous years.
MARY HINES DROESCH: Yeah well, 62% seems high because holiday spend purchasing put stress on the consumer, but it’s down from 67% last year. So we’ve seen some areas of the goods and things start to go down from an inflationary perspective. So that’s relieving the consumer. But it’s still high. It’s 62% feel the stress of holiday purchases.
CONWAY GITTENS: Talk to me about the importance of budgeting before heading out to go shopping or sitting down to go shopping.
MARY HINES DROESCH: Yeah, absolutely. Because it’s really easy to make impulse purchases and then spend way more than you were intending. So we recommend that you allocate 50% of your income to your necessities, 30% to spending on those things that are discretionary and 20% for savings. Now, recognizing the holiday season may be difficult to stick to those ratios, so maybe you save a little less during the holiday season. And once you’ve defined how much you can spend, then make that list. And remember, there are deals out there that you should take advantage of. Always use your rewards credit card so you can get for your purchases or rewards points you can use for other things. And then also remember that. Homemade, thoughtful gifts don’t cost a lot, but can be actually even more meaningful to those purchased gifts.
