One of the most expensive times of the year is the holidays. The holiday season seems to hold no end of expenses. From travel to gifts to extra food for entertaining, it seems as though tradition demands that we spend money.
But how do you pay for it all? The folks at Capital One have some information about how some consumers plan to spend money this holiday season.
Travel Costs Down, Thanks to Credit Card Rewards
Even if you have to travel this holiday season, it doesn’t mean that you have to spend a lot of money. In fact, according to Capital One, many consumers are using travel rewards cards to reduce the cost of their trips. Capital One reports that 79 percent of millennials with rewards credit cards plan to use credit card rewards to pay for their travel. I myself am using rewards to cover travel costs during the holiday season.
You can’t really argue with the idea of not paying anything toward your travel costs. If you have the rewards, you can spend less this holiday season by booking your travel with your rewards. I know people who save up their rewards all year, just so that they can use their rewards to book travel, or even to buy gifts.
Cash Purchases
Many consumers are intent on using cash to make holiday gift purchases this year. Even though there is other data that indicates that credit card use is up, many consumers say that they prefer to use cash when it comes to buying gifts. According to Capital One, 63 percent of Millennials are likely to use cash for purchases. Gen Xers and Baby Boomers are a little more comfortable using credit, though. Only 55 percent of those belonging to Gen X will use cash for gifts, while 57 percent of Baby Boomers are set to use cash.
I found this interesting, since some might think that younger adults would be more likely to spend using credit, but it appears that many Millennials are worried about their finances and feel that cash is a better way to keep their spending under control.
Creating a Holiday Budget
Rather than putting together a per-person holiday budget, many Millennials choose to set an overall budget for the season. According to Capital One, 47 percent of them put together an overall budget, and this allows them to move expenses around as they see fit. Another 27 percent of Millennials put together per-person budgets for the holidays, deciding to spend a set amount on each person they get gifts for.
Of course, this also means that there are some consumers that don’t set budgets for the holidays. This can be dangerous, since it can mean that you overspend. If you use a credit card, rather than cash, this might mean overspending and getting yourself in debt for the holidays. If you didn’t make a budget this year, it’s a good idea to make one for next year.
What are your holiday spending habits? How do you handle holiday expenses?
