It’s starting to look a lot like one of the toughest – and most expensive – holiday shopping seasons in decades.

The only solution the experts seem to agree on: start as early as possible.

Economic barriers accumulate against consumers during the time of year when they tend to spend the most. Inflation has increased at the fastest rate since December 1990, with prices rising rapidly on many items that Americans routinely afford. And just about any item in a consumer’s shopping cart has to make its way through a clogged and mutilated supply chain before it ends up on the physical or virtual shelf of a store – if he succeeds. The inventory-to-sales ratio for retailers is at an all-time low, according to Census Bureau data dating back to the early 1990s.

“It’s clear that rising prices due to inflation and lingering supply chain issues could make this holiday season more expensive for many people this year,” says James Burton, CFP, director of marketing at Personal Capital. “It’s especially important for people to have a plan in place and stay on budget this year.

What’s difficult about the holiday season this year? Consumers are willing to spend, even if prices rise

Some possible signs of the times: The Dollar Tree is raising most of its prices to $ 1.25 as inflation bites into its results. And barges full of sea containers are piling up off the coasts of Los Angeles and Long Beach, waiting to be unloaded.

The process is not only expensive, but frustrating. A November Bankrate survey found that more than 3 in 4 American adults (or 77%) have already experienced problems with their holiday shopping this year, from high prices and shipping delays to out-of-stock items and quality issues.

Even more surprisingly, consumer demand is not weakening. Unemployment is improving and wages are rising, giving Americans more money to spend. Consumption reached new highs through 2021, eclipsing pre-pandemic levels. The Commerce Ministry announced in October that spending rose 1.3%, reflecting a whopping 12% increase from the previous year. The National Retail Federation estimates this year’s vacation sales will more than double the average sales over the past five years.

High savings rates through direct congressional assistance, along with pent-up demand for the near-normal first holiday season in two years, contribute to that image.

Experts say the chain of events gives companies more pricing power. Analysts are already warning of declining promotional offers during the holiday shopping season, including the popular gift-buying days of Black Friday and Cyber ​​Monday.

“A wide range of Americans will be facing first world problems this holiday season,” said Mike Schenk, chief economist and deputy chief advocate at the Credit Union National Association. “Even if they start early, they obviously may not be able to get what they want given these supply chain disruptions.”

For Americans who are ready to start their holiday shopping, here are five steps you can take to beat the economic odds and find something to suit your Christmas list, all without breaking the bank.

1. Make a budget and communicate it

The most important step in holiday shopping this season is to make sure you carefully analyze your finances and define exactly how much you are willing to spend. This often includes having a discussion with your partner or spouse, depending on your financial situation and the state of your relationship.

Having a savings fund for the holiday season is ideal, but many Americans might not be in that position, especially after the COVID-19 pandemic has hit households hard.

See how much money you get each month and how much money you spend. If you have to, consider eliminating any discretionary items you can do without over the next few months. Then find a number that you can realistically afford without relying on credit cards or risking debt – and stick to it.

“Not everyone likes to budget, but it’s really important this year,” says Rod Griffin, senior director of public education and advocacy at Experian.

For many Americans, the pressure to buy loved ones the perfect gift can often outweigh their dollar limit. To reduce stress, Griffin recommends having clear discussions with the people you’re buying for about how much you can afford to spend and what they specifically might want in your price range.

“Communicating your budget limits is important in helping to manage emotions,” says Griffin. “Make it clear what that limit is, that way if there are things your kids are asking for, they know what to expect. It helps both manage money, manage expectations, and deal with disappointments.

Remember: most of this pressure is probably coming from within to buy something from the people you like that they will like. And if you’re worried about going over budget, consider using a mobile app that can help you track your spending.

2. Look for the best deals and stick to your list

Retailers can still advertise discounts during the holiday season, but they might not be as significant in previous years – and they also might not be the best deal you can find in the market. Make sure you compare the items you plan to buy, and don’t buy an item on impulse just because it looks like it’s drastically discounted.

Americans often go over budget buying an item because it’s on sale, rather than because it was something they needed, Griffin says. “You can save yourself from debt if you’re not careful,” he adds.

3. Beware of buy now and late payment options

Americans may view the ‘buy now, pay later’ options as a solution to buying more than their allotted budget, but financial experts warn that these methods can be financially risky, especially because they add up over time. and carry high interest rates if they are not paid during the introductory period.

The holiday season has long been saturated with installment offers, one of the most common examples being layaways. However, technology makes them easier to find and the method of payment even more tempting.

4. Buy local to avoid having to wait for shipment

Whenever inflation rises or shortages make an item impossible to find, experts recommend purchasing a replacement item. One possible route: find a locally produced article, according to Gabriel Mathy, assistant professor of economics at American University. This is because shipping constraints are not just a global issue, but a national issue.

“Any import from China will be caught in these bottlenecks in the west coast ports,” he said. “Something produced locally is a better bet because a lot of supply chain disruptions are trucker shortages. “

5. Offer a service instead of an appliance, television or other durable goods.

Experts say appliances, electronics, televisions, cars, furniture and more are at greater risk of delays, especially because they have to be manufactured and shipped. If receiving your gift on time is the biggest concern, you might prefer to gift someone an experience. This could be a restaurant meal, hair coloring service, a ticket to a play, movie or musical, as well as a trip. This could be a boon for businesses in the service sector, which have been hit hard during the COVID-19 shutdowns, and consumers who have been deprived of these activities due to the closures.

Indeed, some services have risen in price and been subject to inflation, including admissions to sporting events, theaters and concerts, but these gains have exploded as quickly as the prices of goods.

“The services will be the best,” says Mathy. “Services were hit hard in the last recession in 2020, and they don’t have any inventory or supply chain issues.”

Remember: Vacation planning is often a year round task

Consumers could never have anticipated some of this year’s holiday shopping challenges, but the importance of starting early could be a lesson they can take with themselves even in the years beyond the pandemic, when prices are expected to eventually stabilize.

“Nothing ruins a happy holiday season like getting a credit card bill in January that completely wipes out your budget and already puts you on a tough track for next year,” Griffin says. “It is essential to think about vacations all year round. “

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