What to Know
The National Retail Federation estimates the average consumer will shell out more than $1,000 this holiday season
Experts say to create a budget, use reward points and search for deals before you attack your shopping list
Shoppers should also avoid impulse shopping, plan ahead and pick up a second job to afford their holiday gifts
With the economy singing, more Americans are getting into the holiday spirit. For the most part, that means spending more money.
The National Retail Federation estimates the average consumer will shell out more than $1,000 this season on everything from gifts to food to festive attire — a 4.1 percent increase from last year. Another analysis, from NerdWallet, anticipates an 18 percent jump on gift spending alone, to an average total $776.
But few Americans can afford to be that generous without dipping into a savings account or racking up some debt, which will come back to bite you in the new year.
Here's how to get your holiday shopping tab under control without feeling like a Grinch.
1) Create a budget
"People are feeling emotionally tied to the holidays, so it's not surprising to see folks digging a little deeper in their pockets," said Jason Thacker, the head of U.S. consumer deposits and payments at TD Bank.
In fact, 45 percent of Americans feel compelled to go beyond their comfort zones when buying holiday gifts, according to a recent survey from Bankrate.com.
That's why it's important to begin with a spending plan, Thacker said. That means "sitting down and understanding your cash flow, what's coming in and what's going out — start there."
2) Use reward points
Only slightly more than half of rewards cardholders have redeemed for cash back within the past year and another 29 percent have redeemed for gift cards, according to an analysis by CreditCards.com.
Chances are you have banked some credit card rewards and this is a great opportunity to cash them in, advised Katie Miller, the senior vice president of savings products at Navy Federal.
If you're in the market for a new credit card, consider some of the more generous offers out there like the Chase Sapphire Preferred, which comes with a 50,000-point rewards bonus if you spend at least $4,000 within the first three months of opening an account and no annual fee for the first year.
3) Search for deals
Nearly everyone can benefit from some of the best discounts of the year right now. To find them, sign up for emails from your favorite retailers or follow them on social media to see markdowns as they are announced.
Otherwise try price-tracking apps like PriceJump, camelcamelcamel or Slickdeals and sites like retailmenot.com, coupons.com, redplum.com and smartsource.com for hundreds of coupons and promotional codes.
"That could make a big difference in your overall tab," said Erin Ellis, a financial counselor at Philadelphia Federal Credit Union.
4) Pick up a second job
Use the gig economy to your advantage to make some more spending cash during the season. It's easier than ever to bring in extra dough, according to Nicaila Matthews Okome of Side Hustle Pro.
Boost the benefits of working by seeking out a side hustle at a retailer where you can also do a bulk of your holiday shopping and use the employee discount to your advantage — a win-win.
5) Go Dutch
Consider splitting the cost of a holiday gift, suggested Nicole Lapin, the author of "Rich Bitch." In fact, you can probably up the ante by pooling funds among family or friends.
"This year is a great opportunity to trade competitive gifting for collaborative gifting," she said.
Or forgo a present altogether and chip in for dinner to create an experience that everyone can enjoy together, Lapin added.
6) Avoid impulse shopping
Nearly 7 in 10 shoppers who overspend blow their budget by as much as $300 during the seasonal rush, with 63 percent blaming their surplus spending on impulse purchases, according to TD Bank
"If you are aware of your triggers and budget you can be a little more mindful," said TD Bank's Thacker. That means steering clear of the mall if window shopping is your weakness or resisting the urge to browse online when you are feeling particularly tired, bored or tipsy.
7) Plan ahead
To avoid the same predicament next year, start 2019 by setting up a separate savings account earmarked for holiday shopping and make automatic transfers into your gift fund, advised Alison Norris, a certified financial planner and strategy manager at SoFi.
"If you put $50 a month aside, by next year you'll have a healthy balance to start using," added Navy Federal's Miller. Miller suggests stashing that cash in certificates of deposit, which offer higher-than-average returns compared with regular savings accounts.
Currently, a 12-month CD at an online bank could earn as much as 2.65 percent with no minimum deposit, according to Magnify Money.
This story first appeared on CNBC.com. More from CNBC:
- Secret Santa: Half keep their spouse in the dark about holiday spending
- Millennials, you can win the holidays without going broke
- Here's why you shouldn't buy everything on your kids' holiday wish lists