There is a lot of buzz around the holidays this year, with rising costs, inflation and managing finances on the minds of consumers and local small business owners alike. And while the crunch on finances can be daunting, there are steps we can all take to meet these challenges and support our communities and each other.
From consumers managing credit cards wisely (and staying out of revolving debt) while shopping to small businesses offering special deals and experiences to keep cash flowing, there is an opportunity for holiday shoppers and the small businesses in their communities to band together for a fun, festive and financially safe holiday season.
Protect Your Financial Wellbeing
A recent WSFS Bank Money Trends study found that even with rising interest rates, 58% of people in the Greater Philadelphia and Delaware region used credit cards in the past year.
The holidays are a time when many people use credit cards to take advantage of rewards programs, like cash back, to reap benefits to their holiday shopping. But it is important to keep tabs on holiday spending, especially when using credit, to avoid spending more than you can reasonably pay back once those credit card bills are due.
Make sure you understand the repayment terms, and if you can, make sure you budget for paying off your holiday credit card spending in full to avoid accumulating revolving debt in this high-rate environment. This is especially important now with the increase in popularity of buy-now, pay-later programs, which can be challenging when keeping track of your spending and obligations.
The same approach should be used by small businesses as well, as inflation continues to impact supply chains and costs, cutting into profits.
If you are a small business owner or operator, make sure your sales projections and spending forecasts are aligned to avoid revolving debt that could impact the start of 2023 negatively.
Unique Gifts and Experiences Shine Bright
The Money Trends study also found that 65% of regional shoppers plan to shop local because they want to support small businesses, and that one in three (31%) Gen Zers plan to spend more on gifts this year than they did last year, giving small businesses a chance to tap into the spending power of a younger generation seemingly ready to spend.
Small businesses also tend to offer unique gifts and experiences that can’t be purchased elsewhere, and holiday shoppers are taking notice. More than four in 10 (45%) of local shoppers said it feels more personal to shop local and 40% are looking for unique gifts they can’t buy anywhere else.
Local businesses also tend to offer great experiences for gifts as well, and in some cases the cost of those experiences may not be as impacted by inflation, making it more budget-friendly for consumers to purchase and for the business to offer. Look for some fun family adventures, like a fun night out at a local escape room, for example, to help stretch your holiday gift budget further. Experiences are also a great way to connect with friends, so if you exchange gifts regularly, consider doing something together that also supports your local business community.
No matter what your budget is this holiday season, remember to use the tools and resources available to stay on track, and remember to support your neighbors in the small business community by shopping local.
Shari Kruzinski is executive vice president and chief customer officer at WSFS Bank. Her career spans more than 30 years in the banking industry, including 31 years with WSFS. In her current position, she leads the bank’s customer division including customer experience and enterprise-wide customer initiatives. She also oversees the bank’s retail offices, contact center, and retail operations.