Managing Your Holiday Spending

“Buying something at a discount is only a ‘deal’ if you wanted it before you went in the store!” – Brian Milton

For retailers, the period between Black Friday and Christmas is the busiest of the entire year. Anyone who’s turned on their TV, checked their email or walked past a retail store over the past 10 days is likely to have been bombarded with festive images and sale signs, promising huge discounts on everything from socks to big-screen TVs. With 30% of retail sales occurring during the last four weeks of the year, it’s no wonder that retailers are keen to lure us in and entice us to spend wildly on everything they have to offer.

Holiday Season = Big Business

It’s estimated that in the US in 2015, 74.2 million people shopped on Black Friday and that the total amount spent is likely to be around $60 million. In Canada, stats suggest that despite a huge marketing push from retailers, Black Friday hasn’t done much to boost November sales figures (with the exception of electronics and appliances) but that hasn’t seemed to slow down the avalanche of special offer emails that has been filling my inbox since last week!  Psychologically, shopping gives many people a lot of pleasure. If you’re not phased by the crowded stores and overflowing parking lots then there’s something quite festive about wandering around in a warm, well-lit space when it’s freezing cold outside while we pick out gifts for those we care about. The trouble is, that the nice warm space and generous mindset often lead to us spending far more than we intended to.

Keep Spending in Check

With the average holiday spend estimated at $805 per person, Martin Lindstrom, author and marketing consultant suggests that if we want to avoid overspending we should try the following:

  1. Don’t bring your kids shopping with you; studies suggest they’ll help you spend 29% more than your budget.
  2. Don’t shop with your partner; you’re likely to spend 19% more.
  3. Don’t use a cart; people who carry their stuff spend 8% less.
  4. Pay cash and carry $100 bills; you’re less likely to break them for smaller purchases.

Make a List. Check it Twice!

From my perspective, managing our holiday spending relies on the same principles that we use to manage our usual monthly spending: have a plan and follow it! The song tells us that Santa makes a list and checks it twice and that’s a good place to start. Knowing who you intend to shop for and how much you intend to spend helps you determine what you can buy. Whether you prefer to shop in person or online, it’s important to know your budget limits and to stick to them in order to avoid a January ‘spending hangover’. I love to buy gifts and I’ve run myself into all kinds of trouble by either buying too much for one person or going over budget on gifts for a family member and then feeling as though I have to buy extra for everyone else to make it “fair”.

One way to avoid this is to resist the temptation to make too many spontaneous purchases. Retailers know that the human brain gets more excited by the thought of buying something than actually owning it and so they arrange the stores and gear their marketing to making customers feel as though, if they don’t buy right that second, then they could miss out. In truth, if you wait 24 hours to buy something there’s a good chance you’ll change your mind (which saves you money!) and if you do decide to go back 24 hours later, it’s highly likely that the “must-have” item will still be there.

Shift to Thrift

Another way to reduce spending is simply to cut back on your list. For many Canadians, high levels of consumer debt combined with a weaker dollar and slowing economic growth have led the Conference Board of Canada to predict a “Scrooge-like” Christmas season for many retailers. A lot of people are planning on spending less this year and so if you have people on your list that you don’t really want to buy for, chances are, they’d welcome the opportunity to save a little money and not buy you a gift either! In our family, we only buy gifts for the kids. My friends and I make plans for dinner or a movie rather than buying each other presents and siblings and I make an effort to spend time together when I go home to England rather than spending money on Christmas gifts that we don’t really need. Not only does it make Christmas shopping a whole lot quicker and easier but no-one misses the gifts on Christmas Day and we enjoy having an excuse to spend time together.

At the end of the day, the holidays are a time for giving but that doesn’t have to mean money. What you spend and who you spend it on is entirely your decision. Whether you love to buy extravagant gift for a large number of people or prefer to make special gifts for a select group doesn’t matter as long as what you choose to spend makes you happy, fits with your budget and doesn’t leave you struggling in January.

How do you manage your holiday spending? Do you have tips or strategies that help you spend less or stick to your budget? If so, I’d love to hear them!

Written by Sarah Milton

Sarah Milton is currently stretching her professional wings in Edmonton, Alberta in a role that allows her to combine her talent for writing and speaking with her training in the financial services industry. She is passionate about inspiring people to get excited about their money and empowering them to take control of their financial future. You can follow Sarah on Twitter @5arahMilton

3 Responses to Managing Your Holiday Spending

  1. I am with you! For us, it is all about having a list and then looking for the sales for only those specific list items. I was organized this year and actually was able to get most of my shopping done during a Black Friday online sale. I couldn’t believe it. I actually got the things I was looking for and at a great discount 🙂
    We also try to limit the gifts and only buy for the children in our families. The adults in the family are all trying to get rid of clutter, not add to it! Lol!

  2. This year we cut the shopping by half. We have just a present something simple and only 1 presents for the rest of my kids. Also my parents and brothers only 1 and I have a budget this time. I am getting almost done. the best, I am under budget…

  3. Don’t go shopping when you are hungry, no matter what you intend to buy. As you suggest, make a list and a budget and stick to it.

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