It’s natural to overspend from time to time, and even more so during the holidays. The joy of giving is undeniable, but spending more than you should can put your future in jeopardy and ultimately stand in the way of happiness.
The National Retail Federation 2014 Holiday Consumer Spending Survey projects that the average person will spend $804.42 this year. This is an increase of 5% over last year.
Whether you spend more or less than this projection is a personal choice that is best made with intention. Here are six common holiday spending triggers that could cause you to spend more than intended.
- The Jones’. People who try to match the amounts spent by colleagues, friends, family or peers often spend beyond their means.
- Ripple Effect. When you overspend for one relative, there is a natural tendency to create equalization by matching the dollar value of gifts for others.
- Stress. Adding holiday shopping to the already long list of seasonal tasks can be stressful. If you don’t take the time to decide on the right gift and search for the best deals, you may end up overspending. In the end, you could trade the stress of getting it done for the stress and guilt associate with the knowledge that you’ve put your other financial goals at risk.
- Habit. Sometimes we gift without considering whether the expenditure aligns with current realities. As families evolve, a discussion about how each member would like to celebrate the holidays may be worthwhile. For example, as your extended family grows, it may make sense to discuss a kids-only gift policy, put monetary limits on spending, or do a gift swap.
- One for You, One for Me Mentality. Well over half the holiday shoppers (56%) will purchase gifts for themselves this year. Whether they cannot resist the deals or simply want a reward during a hectic time, shoppers will spend on average $126.68 on themselves during the holiday shopping season.
- Free Zone. Many people enter the holiday season as if it is a free zone. They don’t take the time to put thought into spending parameters, nor do they have the discipline to respect those parameters. They buy until they get to the end of their list. They decorate until every square inch reflects the feeling of festivity in their heart. And …. they hold their breathe while waiting for the bills to catch up with them.
Overspending and holidays do not … and should not … go hand-in-hand. Learn to spot your spending triggers, so you can devise strategies to prevent them from derailing you from achieving your One Best Financial Life ®.