The holidays are a time of year when many people spend more money than usual. If you’re not careful, it’s easy to overspend and end up in debt.
According to a recent survey, the average American family spends $1,051 in December. That’s a lot of money! And it doesn’t even include big-ticket items like travel or gifts.
That’s why it’s important to be mindful of your finances during the holidays.
Do people spend more money in December?
Yes, people definitely spend more money at year end – particularly thanks to the December global holidays. This is likely because of all the holiday-related expenses, such as travel, gifts, and parties. If you’re not careful, it’s easy to overspend during this month.
Psychology of overspending during the holidays
Why do people overspend during the holidays? There are a few psychological factors at play.
First, the holidays are a time of year when we’re bombarded with advertising. Companies know that people are more likely to spend money during this time of year, so they ramp up their marketing efforts. This can make it harder to resist temptation.
Second, the holidays are a time when we’re surrounded by family and friends. We may feel pressure to spend money on gifts or activities in order to keep up with our loved ones.
Finally, the holidays can be a stressful time of year. We may turn to spending as a way to relieve stress or cope with difficult emotions.
Why do we overspend in December?
There are a few reasons consumers overspend in December.
First, the holidays are a time when we’re supposed to enjoy ourselves and relax. We often see this as an excuse to splurge on gifts, food, and other items.
Secondly, many people feel pressure to spend during the holidays because everyone else seems to be doing it.
Finally, retailers know that people are more likely to spend during the holidays, so they often offer sales and discounts that make it even harder to resist.
Here are a few tips:
1. Make a budget and stick to it.
Before you start your holiday shopping, sit down and figure out how much money you can realistically afford to spend. Then, make a list of the people you need to buy gifts for and allocate an amount of money for each person. Once you have a budget, do your best to stick to it. It can be tempting to overspend when you see all the holiday sales and deals, but try to resist the urge.
2. Shop around for the best prices.
Don’t just buy the first thing you see – take some time to shop around and compare prices. With a little bit of effort, you can often find the same or similar items for a lower price. There are also many ways to get discounts on holiday shopping, such as using coupons or waiting for items to go on sale.
3. Avoid buying on credit.
If possible, avoid putting your holiday shopping on credit. Credit cards often have high-interest rates, which can end up costing you a lot of money in the long run. If you do need to use credit, try to pay off your balance as soon as possible to avoid accruing interest charges.
4. Think about what you really need.
Before you make any holiday purchases, take a step back and ask yourself if you really need the item. In many cases, we can get caught up in the holiday spirit and end up buying things that we don’t really need. If you’re not sure whether you need something, chances are you probably don’t – so save your money and don’t buy it.
5. Consider alternative gift options.
If you’re worried about overspending on gifts, consider alternative gift options that are less expensive. Instead of buying a physical gift, you could give someone an experience, such as tickets to a show or a voucher for a spa day. You could also make homemade gifts or give someone a gift card.
How to spend less on a Christmas vacation?
Christmas is a time when many people travel to visit family and friends. If you’re planning a trip, there are a few ways to save money.
1. Travel during off-peak times.
If possible, try to travel during off-peak times. This is usually cheaper than traveling during peak times, such as around Christmas and New Year.
2. Book your travel in advance.
Another way to save money on travel is to book your tickets or accommodation in advance. This will often get you a better deal than if you wait until the last minute.
3. Look for deals and discounts.
There are often deals and discounts available on travel, so it’s worth doing some research to see if you can find any. You could look for special offers on websites like Expedia or Kayak, or sign up for a travel rewards credit card.
4. Use points and miles.
If you have any points or miles from a frequent flyer program or credit card, now is the time to use them! You could use them to book your travel or get a discount on accommodation.
5. Consider alternative options.
If you’re flexible with your travel plans, you could consider alternative options that are cheaper. For example, instead of flying, you could take the train or bus. Or, if you’re visiting family or friends, you could stay with them instead of booking a hotel.
The holidays can be a time of spending and excess, but with a little bit of planning, you can save money and stick to your budget. By using the tips we’ve provided, you can enjoy the holidays without breaking the bank. Happy holidays!