Holiday shopping tips: How to be financially smart this season

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It's the time of year when shoppers can get caught up in holiday deals and spend beyond their means. 

Emily Irwin, managing director and senior director of advice at Wells Fargo’s Wealth & Investment Management, has dubbed this trend the "swipe and forget" or the "click and forget." 

Come January, some shoppers are then faced with skyrocketing bills that they can't pay for. 

"Getting caught up in that holiday kind of whirlwind can lead to what I call the credit card or holiday hangover in January," Irwin said. "The bills start arriving, and potentially holiday shoppers may find that they don't have enough cash flow to pay off those bills in full." 

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Even if the deals seem sweet, these items can ultimately cost some shoppers more in the long run if they can't pay off their bills right away, according to Irwin.  

Credit cards can hit consumers with high APRs, and if consumers miss a payment altogether, it can hurt their credit score too, she added. 

A Black Friday sale sign outside an Aldo store on Black Friday in New York, US, on Friday, Nov. 25, 2022.  (Jeenah Moon/Bloomberg via Getty Images / Getty Images)

The first trick to being a financially smart shopper isn't necessarily capitalizing on all the major shopping days like Cyber Monday. The first thing shoppers should do before they hit the stores or go online is to make a list of what they need for themselves and what they want to get for other people, according to Irwin. 

It's also smart to add a subcategory to allocate a dollar amount for certain people and certain items, she added. 

"I think that's a really good place to start because that kind of gives the entire picture of what you hope to accomplish through your holiday season, and then you can determine where, if anywhere, you have wiggle room within that," Irwin said. 

A Black Friday sale sign at a Hollister store on Black Friday in New York, US, on Friday, Nov. 25, 2022. (Jeenah Moon/Bloomberg via Getty Images / Getty Images)

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This can help shoppers keep track of everything and adjust a budget if needed, according to Irwin. 

Another tactic is stacking discounts. This means utilizing paper or digital coupons as well as credit card rewards. Shoppers can also buy through a website that offers cash back on purchases.

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Consumers also need to look at the fine print of an order. For instance, it's important to see how much shipping and taxes are, and if there are ways to save on those costs, Irwin said. 

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One thing shoppers should avoid is opening up too many credit cards in an attempt to save money. 

Typically, stores will ask customers if they want to open a credit card in order to save anywhere from 5% to 20% on a purchase, but Irwin strongly urges against signing up.

If you open up too many cards, "then you start splitting your bills between a variety of different financial instruments that can be hard to track," Irwin said. 

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