The holidays, especially Christmas, are supposed to be a time of joy and goodwill. But when you’re feeling the pressure to give a “significant” gift, not only are you the opposite of joyful, but that compulsion and the looming deadline can cause you to overspend.
It’s one of the areas where emotions and financial behavior are closely intertwined.
Nathan Astle, a financial therapy consultant, writes, “A significant reason for holiday overspending is a genuine desire to share love and joy with those who matter most. If that is managed, that can be an excellent thing. If that expression of love comes with resentment toward yourself or others, giving loses much of its joy.“1
Writing for U.S. News, Erica Sandberg gives some practical ways to keep emotions from goading you into overspending on the holidays. And a great place to begin is by remembering that a Christmas gift is not the ultimate expression of your love. In fact, there’s a good chance that a few months from now that expensive gift won’t be remembered.
“Try to recall a single gift that you received for Christmas last year,” Sandberg writes. “If nothing comes to mind, you’re not alone.”
Another behavior that inevitably leads to overspending is not keeping track of your gift purchases. Instead of just buying until you’ve completed your Christmas list, start with an overall amount you can afford to spend, then budget for each gift. And if you can shop carefully for some deals, that may mean more money for the other gifts.
It’s also acceptable to pare down your list so that you’re not buying gifts for people simply out of obligation.
Another tip is to acknowledge the emotions that can trigger overspending. For example, last minute desperation.
“Our financial behaviors are highly connected with our emotional state,” says Astle. “We often overspend because we get caught up in the moment’s feelings.” He adds that while it’s completely natural to have emotions, they shouldn’t be the primary guide for our financial decisions.
Finally, it’s far too easy to overspend on ourselves. According to a recent survey by Shopify, 64% of Americans are either likely or certain to use holiday sales to shop for themselves. Sandberg suggests adding yourself to your Christmas list, along with the amount you’ve allotted to spend on yourself.
It’s easy to decry the excessive commercialism of the holidays and yet we can find ourselves feeling that not participating will make us a Scrooge. The answer is to step back from the emotions, come up with a reasonable spending plan, and look for opportunities to express love to friends and family in ways that won’t sink our finances.
We wish you and your family the happiest of holidays, and hope that this season and the new year are filled with joy.
If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.
Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020
Sources:
1. http://go.pardot.com/e/91522/g-on-gifts-this-holiday-season/948vh7/2152926843/h/HXyPURFNtjzcsy-S0e5QRfmUcISr8vuPj-KYU9O0sxk
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