Here are the best ways to budget for Christmas gifts this year

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Vivian Tu, Financial Literacy Creator aka @yourrichbff on TikTok, highlights the best ways to budget for holiday shopping.

Video transcript

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BRIAN CHEUNG: Welcome to Yahoo Finance, I’m Brian Cheung. It seems some retailers are already telling people to shop for the holiday season. In fact, I just scoured a TikTok recently and found some really great tips on how to get a head start with Your Rich BFF, we talked about the idea of ​​creating a sinking fund for them. holiday gifts. So let’s bring in the star herself, Vivian Tu.

Vivian, thank you for appearing on the show today. You have to help me out here because you are really saying I have to start about 10 weeks early on holiday shopping. How should I think and budget for this?

VIVIAN TU: Yeah, absolutely. Thank you very much for having me. A sinking fund is basically a pot that you contribute small amounts to over a longer period of time. This is very helpful as it reduces the burden of holiday shopping, especially knowing that the average American spends $ 1,000 on holiday gifts each year.

Instead of taking on credit card debt or giving up your own holiday necessities, a sinking fund is a great way to save all year round for something that really matters. And if you do the quick math, $ 1,000 over an entire year is only $ 2.75 a day, so you could forgo coffee every other day. Personally, I don’t start until about September, but even then setting aside $ 10, $ 15, $ 20 each week is much easier than spending $ 1,000 all at once.

BRIAN CHEUNG: OK, that’s probably really bad news because I just shelled out a few bucks for this earlier. Tell me a bit about how you should spend financially, what part of your wallet should you use? Would you like to advocate for certain types of credit cards to try and rack up points while you think about it all? What is the best approach?

VIVIAN TU: Yeah, absolutely. When I do my Christmas shopping I try to get as much money or rewards for myself as I am going to give to others. I really like using rewards and cash back credit cards such as a Citi dual charge card where not only do you get a percentage cash back when you buy the product but are responsible and you pay it back, you get a percentage back then too.

Also, I love the NX Platnum, the Chase Sapphire Reserve, I find they have really strong buyouts. So when I accumulate my own points, I can then redeem them for travel or other freebies.

BRIAN CHEUNG: OKAY. And also, where do you do your shopping? I know this can be a personal preference depending on who you are shopping for. I know in your TikTok you say you could budget for different things and buy different things for your family or for your wife at work. Where do you shop this holiday season?

VIVIAN TU: So that’s a very good question. I feel like over the past couple of years people have been locked in the house and a great gift that I am giving to a lot of people this year is the experience, whether it is a day spa trip or cover their next flight for their vacation or a hotel night for their next trip.

I think these are really practical gifts that anyone in your life could appreciate and you can actually buy them at the last minute because you don’t get them right away, it’s not a physical purchase, especially knowing that delivery times may be delayed this year.

BRIAN CHEUNG: You know, what’s really interesting, though, is that experiments could be a way around some of these supply chain issues we’ve heard about. Because some retailers have said that you should be ahead of the curve when it comes to buying if you’re trying to get, say say, a PS5 or whatever because there are like microchip shortages and all. that other stuff too.

But I guess, just a personal question, what are you zoned for this holiday season? Are there certain things? Do you feel like beyond experiences like clothing or electronics, what are some categories that you really focus on that are on your checklist for the season?

VIVIAN TU: Yeah, absolutely. I think as we slowly start to come out of this COVID job from the home environment, people have let their wardrobes fall behind by two years, maybe we have gained a little COVID weight, so I think I’ll be looking for some nice essentials that people can wear, both in their personal lives and at work. Whether it’s sweaters or a nice outfit, get them ready so that when people return to the office, they have something to wear.

BRIAN CHEUNG: Are you one of those people who ask your partner or family, tell me exactly what you want me to give you? Cause I’m always nervous I’m like I want it to stay a surprise I want them to be like excited because I got them something that I knew was going to hit the mark but sometimes I don’t ask them , I give them something they don’t want and then they just go crazy.

VIVIAN TU: Yes. I’m definitely asking for genres, maybe not necessarily like, oh I want a gray cashmere sweater from XYZ brand but I’m going to say, what do you need? What is really handy and what are you going to be using all the time. And when I get these broad sectors or genres, then I am able to shop within those parameters.

BRIAN CHEUNG: Alright, perfect. Well, again all of our viewers can check out Vivian’s content on Your Rich BFF on TikTok, but thanks again for breaking it down for us. We will welcome you again when we get a little closer to the holiday period.


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