It’s the Least Wonderful Time of the Year…When You Shop With No Budget

Ah, Christmastime.  Something magical in the air lifts our spirits and makes us feel as though anything is possible. Honestly.  Haven’t you had moments as an adult where you find yourself searching the skies for reindeer?

It can’t be just me!

Unfortunately, that magical feeling seems to be carrying over into our spending patterns.  We seem to believe that if we put gifts on credit, we’re bound to get a bonus that covers the expenses come January.

Let’s look at why we tend to overspend during the holiday season, and what we can do to curb that tendency to buy it all.

This post has been written by Jamie Jeffers, a new staff writer on the team.

It's the least wonderful time of the yearThey’re Out to Get You!

A little too dramatic?  Ok, maybe.  But the stores know more about your spending habits than you do.  Trust me. They’ve studied your habits.  They know where to place items and how to convince you to buy now.

Check out this recently published study about our holiday spending habits.  There’s a lot of info there.  One figure stands out: 87% of consumers admit that a great sale could convince them to spend an extra $25.

That $25 might not seem like much to you.  But if that’s true, why do retailers care about that amount?  Because it all adds up.  Wouldn’t you rather it add up in your bank account rather than theirs?

Also beware of BOGO deals.  Retailers know that just the right deal can talk you into buying for yourself, too.  Keep an eye out for a better deal on just one of the item, and save yourself the closet space.  Pocket the savings.

Credit Card Hangover and Never Ending Debt Cycles

Have you noticed that it takes several months (or even longer) to pay off your gift giving bills?  According to this study, 56% of shoppers will put at least part of their gift giving on a credit card.  Of those people, 35% will take 2-3 months to pay it off.  And 16% take more than 6 months.

If you’re still paying off last year’s spending in December, that’s a cycle that’s not easy to break.

Rip the bandaid off now.  If you want a drastic change, you’re going to have to make a big change in your habits.

You can do that a few different ways.  Increase your income somehow while decreasing your spending.

How to Fix Your Christmas Spending

Separate It

Where do you keep your Christmas money?  Don’t mingle it with your checking or savings account.  Open a special account just for Christmas money.  My favorite way is using Capital One 360.  They allow you to have several different accounts without charging fees.

If that sounds complicated, just get an envelope or a jar.  Keep your Christmas money there and you’ll easily see how much you’ve spent and how much is left.

Knowing the exact dollar amount in your Christmas budget will keep you honest.  (And your budget in check.)

Get a Job

Many stores hire help for the holidays.  You can get a part time job at a store you frequently buy gifts from anyway. Not only will you get extra spending money for gifts, but you often get a discount from the store you work at. Win/win!

Draw names

Ask your family and friends if they’d be comfortable with cutting back on gifts this year.  You can draw names and only buy for one person.  Or have a White Elephant party where you each bring a gift with wide appeal and make a game of it.

Simplify

Where can you pull back on your spending?  Kids love opening gifts.  But how many of those toys aren’t played with beyond Christmas morning?  Try buying fewer gifts, but make a treasure hunt so they have to search to find one. Extra fun without the cost!

Our own family has declared 2016 as our #yearofno.  We’ve made it known to loved ones that we’ve cut back all our spending for the year to focus on debt payoff.  So they understand that if we simplify their gift, it isn’t because we don’t love them.  We just want to be in a better life position.

This can be tough, especially if your giftee has the love language of “receiving gifts”.  But you don’t have to go overboard to give gifts.  There are plenty of DIY and cheap gift ideas that will make them feel special.

Keep the holidays special.  Just don’t break your budget to do it.

Break free of the cycle of paying off Christmas bills this year.  You’ll be able to put those payments into your own Christmas budget for next year.  Start a new habit and give gifts without the guilt (or interest payments!).

How have you simplified gift giving?

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