A Guide to Your Year End Shopping Spree
December, the month that adults and children look forward to. It is the month where working adults go for their well-deserved rest and students are on their school holidays. Perfect month to go on a vacation with your family, or even spend some quality time with them in Singapore if you decide not to travel.
With that in mind, there would be an increase of foot traffic along the busy shopping districts, restaurants, and shopping malls. Retailers would take advantage of this month and advertise their promotions and offer discounts aggressively especially when the season of giving is round the corner. Families, couples, friends, colleagues would all take time out to go shop for gifts for their loved ones. Shopping for Christmas, and those with a higher disposable income would also take this time to shop for themselves too.
This could be practically dangerous to some people as they would typically splurge more than what they can normally afford with their salaries. Their greatest enablers would be credit cards as they are able to pay for goods and services or anything else that involves monetary transactions, in advance. If anything, uncurbed spendings inherently leads to late payment charges or may even snowball along with interests which are scary for most consumers as they are making their buying decisions impulsively.
Most year end shopping sprees, predominantly the last quarter of the year, would always be trigger the spike in the consumer credit card debt in Singapore by at least a good 5%, and this has been a consistent trend for the past 4 years. The important fact to note is to clear your credit card balance ALL THE TIME and ON TIME.
Most banks structure the accumulation of your wealth through compounding interest, and it is the same for credit cards as well. Most credit cards comes with high interest rates as there is a price to pay for using “future” money which you do not possess at current times. If you were to stick to the plan, spend only what you can repay the following month, there should not be a problem with having a credit card.
USEFUL TIPS TO SURVIVE THIS YEAR END SHOPPING SPREE
- COMPARE PRICES
Sure there would be banners and posters everywhere, year end sales and promotions being advertised online and offline. Chances are there would be similar product, or a product that you are looking for, being sold in multiple stores or ecommerce sites, the only difference between them? Price. Look hard enough, be on the lookout, you would be able to get a steal for any products. If you were to consider getting a portable power bank as a christmas gift, there are some stores that would sell a couple of bucks more and some a couple of dollars lesser as they are fine to narrow their profit margins and earning lesser, if you are meticulous enough, you would not leave any stones unturned.
- SPEND WITHIN YOUR CAPABILITY
Do not overspend your monthly salary or even touch into your savings, if there are multiple presents to be bought, budget yourself and spend within your limit. Do not overcommit what you cannot afford if anything. Typically, before any christmas or gift exchanges, there would be a budget set be it for a office setting, or between friends. If you know your finances well, you would know how much to set for the christmas gift exchange.
- DO NOT SIDETRACK
This requires a certain amount of discipline and self-control because as we are making our way through the shopping mall, there are just one too many products or promotional banners that would catch our attention. These are just some strategies and tactics that the retailers are using to pull your attention away and get you to take a look at their products. Because the more time you spend at a store or a particular retail space, the higher the tendency of purchase.
- FORECAST YOUR REPAYMENTS
Take into consideration if you have any long term recurring expenses or any prior credit card expenditures before embarking on your christmas shopping spree. The priority should be to clear off your month to month debts such as your utility bill, house loans, car loans, or any other purchases you have made with your credit cards the month before. Else this would snowball and pile up and you would not like to see the amount due once the credit card statement is being generated.
- BE DISCIPLINE ENOUGH TO REPAY LOANS ON TIME
Know when is your credit card bill statement due date, or when the letter/email comes to notify you, ensure that your credit card bills are being paid on time to avoid any miscellaneous fees such as late payment charges, interest fees, which may snowball to an exorbitant amount which would shock you due to the compounding effect. These can all be avoided, if, 1) you do not overspend, leading to the usage of your credit card, 2) if you were to make your credit card bill repayment on time.
BUY YOUR CHRISTMAS GIFTS OFF PLATFORMS SUCH AS:
These are some online ecommerce platforms that may offer discounts off most products even when you benchmark their prices against retailers who have a brick and mortar store. Because their mark ups does not include their rental or lease of the space they are using.
In conclusion, discipline is the key to it all. It takes discipline to spend within your budget, it takes discipline to NOT be distracted and shop for other stuff along the way and it definitely takes discipline to only shop for christmas gifts for others and not spend any on yourself. As the festive season is nearing, think ahead and spend wisely, it will only do you more good than harm. Sales and promotions would always be around, as and when there is an opportunity, retailers would find the chance to get their products out, offer a discount to entice consumers and encourage purchase, do not be afraid that you would not be able to get this product at this price point again.
The takeaway here is to know your finances, do not go on a splurge only to realise that you have to be frugal end of the month or the following month because you have to clear your credit card bill and only end up eating bread and butter for the remaining weeks till your next salary comes in.