Many of us let loose a little in December and use January as a time to rein things back in. We might start the year with water and green juice to make up for a month of cocktails and cookies. It’s a balance.
But when it comes to money, letting loose in December can’t always be fixed with just one month of keeping things tight. In 2018, 50% of American survey participants reported that it would take them three months to pay off their holiday debt. And for some, it would take even longer than that. Needless to say, there’s a definite imbalance to this pattern.
None of us should be spending so much around the holidays that it puts a strain on our finances until the spring. No gift, outfit, or party is worth that. But with sneaky marketing tactics and sparkling temptations all around us this time of year, it’s important to have a plan before we venture out to a department store. That way, we have a better chance of being kinder to our wallets, and ultimately, to ourselves!
Here are 5 holiday spending traps to look out for, and some tips on how to avoid them:
1. Black Friday/Cyber Monday/Holiday-Season Sale Advertising
Taking Black Friday as an opportunity to buy things you couldn’t otherwise afford is not a bad idea. But it becomes a trap when you start buying things you weren’t planning to, just because they’ve been strategically advertised to you. If you have a Black Friday/ Cyber Monday spending tradition, here are my tips:
- Make a list of things you actually need and have been thinking about purchasing for some time. For example, there are some makeup products I need to replenish, and I’m waiting to check online for those Cyber Monday deals.
- If you’re shopping in store, you can force a spending limit on yourself by only bringing cash.
- If you’re planning to shop online, search for the products, put them in your cart, and check out. Try to “x” those promotional pop-ups before they catch your eye. As an alternative to cash, you can try using a prepaid card or gift card to help yourself shop within your limits.
- Better yet, if Black Friday has always been a triggering time for your bank account, it might not be a bad idea to avoid it altogether this year. Unsubscribe from those email lists, and stay off social media, so you’re not reminded about what other people are buying. Remember that getting something on sale isn’t a deal if you didn’t need it in the first place.
- Instead, plan something nice for yourself that has nothing to do with shopping, like an at-home movie night or taking a relaxing bath.
2. Impulse Gift Shopping
If you’re planning to buy gifts, you need a gift list. Going to a store without a plan is a very easy way to spend way more than you intended to. Trust me, I’ve learned that the hard way.
Here’s what I do to avoid this trap: In November, I create a list of the people I plan to buy for, along with how much I want to spend on each person, in the Notes app on my phone. I actually don’t delete the Note from the previous year, so I can use it for reference. For some gifts, it’s easy. I know what I’m going to get, and I might even know exactly how much it will cost. For others, I like to browse stores early in the season to get inspiration. Of course, inspiration can turn into temptation, so to avoid this, I leave my money at home!
If you are worried about an item running out, you can go back to the store the next day, or even call them to set it aside for you. Stores have lots in stock at this time of year, as long as you’re early enough in the season. Browsing early also gives you time to reflect on whether that gift is the right one for that person. Honestly, there are some people I prefer to bake or make things for, and this is a totally legitimate option! Your loved ones ideally aren’t looking for the dollar value of your offering, but for something that shows that you value them.
Bottom line: gift-giving should be a meaningful, reasonable experience — not something that stresses you out or maxes out your credit card.
3. Holiday-Themed Prepared Food at the Grocery Store
From cheesy hors d’oeuvres to peppermint-flavored desserts, grocery stores know how to entice us at this time of year. And since we’re in the spirit, treats that we normally wouldn’t even consider buying find their way into our shopping carts. There’s nothing wrong with stocking up on goodies for a party or to enjoy on a cozy day in. But again, it’s all about planning and sticking to your list.
If there are some holiday food items you can’t go without, by all means, buy them. But be mindful that a lot of brands use festive-looking designs on their packaging to sell you mediocre food. Just because the box looks good doesn’t mean the chocolates are.
If you want to have some special treats without adding an extra hundred dollars to your grocery bill, the holidays are a wonderful time to do some home baking and to try out those recipes that you usually don’t have time for. This is a way healthier and more cost-effective option than prepared food. And don’t go shopping for your Christmas dinner on an empty stomach! Make sure to hit up the grocery store when you’ve been fed and are in a stable mood. Otherwise, it’s even harder to avoid picking up extra comfort food items.
4. The Pressure to Wear New Outfits to Parties
I used to feel pressure to have a new dress every holiday season. But I’ve since realized that no one cares or even notices if I’m wearing the same one again. Now that I’ve managed to accumulate a handful of nicer outfits, I rotate them throughout the season and through the years.
Wanting a nice outfit that makes you feel confident is natural! Plus, if you’re buying from a small, sustainable business, you don’t even have to worry about environmental repercussions. The issue with outfit shopping is when it comes out of feeling pressured to make an impression. This gets even worse when you buy something you don’t really like, just to have something new.
My tip for avoiding this is to first go through your closet, try on your options, and see how many party outfits you can come up with. Then, check your calendar and try to plan out which outfit you’d like to wear for each occasion. If you’re unhappy with the result — e.g., if you’ve been reusing the same sparkly skirt for years — go get something new! Overall, just check that you’re being honest with yourself about your motivations. Make sure you aren’t more focused on other people’s perceptions of you than on your own comfort.
5. Relying on Credit Cards
Buying gifts with a credit card is an easy way to spend more than you can afford. Because you don’t see your balance decreasing in your checking account, it doesn’t feel real at the time. Out of sight, out of mind.
But again, nobody should get into unnecessary debt every year, just to participate in holiday traditions. Leaving the credit card at home forces you to stick to your budget. Using only cash (or a prepaid card) is better because even with debit, we can sneak a few extra purchases without noticing right away.
If you’ve always relied on credit for gift shopping, and can’t see yourself changing this year, here’s something to try. In January, start a designated holiday or gifts savings account that you deposit money into every paycheck. Even just $20 per paycheck can add up to $520 by the end of the year!
Overall, learning from past experiences can make every holiday season a little easier on your wallet.
It’s okay if you find yourself slipping into any of the above traps. The first step is just to be aware of them. Then, you can use this awareness to plan better for next year.
Try to keep all your receipts or a record of the things you buy this year. One valuable new year’s practice is to reflect on any times you felt pressured to buy something or were unsure about a purchase, but bought it anyway. This will help you to remind yourself about which situations to avoid next holiday season.
And in the flurry of festivities, remember to take care of yourself and your money. Happy Holidays!
Sarah Blake is a musician and writer, who has been fascinated by the world of personal development since she was a child. A second-generation Canadian, she is especially interested in the ways that people build wealth, starting from nothing. You can find her at www.sarahblakecreative.com.
Image via Unsplash