The holiday shopping season has arrived early in 2022. A clear and definitive sign of its arrival is that retail behemoth Amazon, created a second prime day scheduled for October 11th through 12th, 2022.
In case you have have not noticed, retailers are starting to provide holiday shopping incentives and discounts prior to the traditional days. In the year 2021, Covid-19 had a great impact on the holiday shopping season. However, the main contributor for the earlier shopping season this year is inflation. Therefore, how do you navigate the holiday shopping season during inflationary times?
Cut Your Shopping List
If you have never engaged in this exercise before, inflation will cause you to do it now. Inflation has induced more individuals to re-create a list of gifts recipients. What is surprising about the list is not who’s on it, but who did not make the list this year.
In a September survey conducting by accounting firm KPMG, respondents indicated that while they had to spend more on gift recipients, they were planning to purchase fewer gifts. Among the people who were on the holiday cut list this year due to inflation are in-laws, grandparents, friends and co-workers.
While I would most certainly like to see a decrease in the rate of inflation, the positive is that individuals are now becoming more intentional and responsible in their finances by creating shopping lists before engaging in spending activities. You cannot be a responsible steward in managing your holiday spending without a shopping list with the rate inflation 8.5% percent.
Know When to Shop
Waiting to shop at the last minute or perhaps even during traditional sale days could prove to be costly. According to a National Retail Federation Survey ( NRF) conducted in September 2022, 44% percent of holiday shoppers believe it is better to purchase holiday gifts and other seasonal items now in order to avoid inflation increases later in the year. This speculation is reasonable when viewed within the context of an increased rate of inflation each month for the year 2022.
There are two other factors to consider when weighing the holiday and gifts conundrum of shop now or shop later. The first is that given the economic reality regarding the unemployment rate and the stock market response, the more likely scenario is that the Federal Reserve may increase the interest rate.
The result is that goods and services will cost more during the peak holiday shopping season. The second reality may be that the traditional shopping season of Black Friday, Cyber Monday and other days may not yield any greater discounts than the ones which currently exist. With gas prices on the increase, holiday shopping delays could be costly.
Look for Value
In 2021 holiday shoppers prioritized availability and supply chain issues over brand names and loyalty. An April survey conducted by Ziff Media Group found that 63% percent of the respondents thought price is a more important factor than brand quality. In the same survey, 58% percent of consumers stated that they would switch brands to take advantage of coupons and other discounts.
With inflation now at a record high levels, will you stick to brand name gifts, blow your budget and borrow from your savings or will you look more for value in the gifts? This is how we manage as responsible stewards. This holiday shopping behavior raises the question or concern that I would characterize as “ stewardship schizophrenia.” Why would your borrow from your savings or take on more credit card debt, when, if truth be told your retirement or 401 (k) has loss significant value this year? How you spend during the holiday shopping season can set you back for the next twelve (12) to eighteen (18) months! Can you afford to do that?
Today’s what’s up is about some IRS requirements and your tax filings for next year 2023 The questions concerning your crypto currency or digital assets have been expanded to include NFT’s and other transactions. The IRS draft asks the question, “at anytime during 2022, did you (a) receive ( as a reward, gift, or compensation) or (b) sell, exchange, gift or otherwise dispose of digital assets ( or financial interest in digital assets)? The revised questioning is designed to comprehensively address all your digital assets activities. I don’t need to remind you that when you file your tax return, you are doing so under the penalty of perjury. Enough said!
And that’s what’s up!
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assis-tant, and CEO of Give2Getrich, LLC . Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.