Less is More
How many times have you said, “I am going the spend less this year” as you prepare for the holiday season? I cringe when I walk past the row of artificial Christmas trees set out in late October (and earlier) by my local big box store. I whisper the word “really?!” as I walk by. They are the villain in my story because I am convinced, I would spend less money if they started the holiday shopping season the day after Thanksgiving. Americans who wish they’d spent less over the holidays spent 24% more than those who were happy with their spending according to a survey done by Money Geek last year. Does it make me feel better knowing I am not alone? Not really.
The Gift That Keeps Giving
We have been programmed to believe we need to spend more on those we love. According to a recent holiday spending report by NerdWallet 28% of shoppers who used credit cards have not paid off the presents they purchased for family and friends last year. The real gift is to the credit card companies that on average charge 20% interest. This is near an all time high according to Bankrate. Will Santa be able to fill his sleigh when almost 2 out of 5 credit card holders are closed to or maxed? As credit card debt tops $1.14 trillion holiday shoppers are expected to spend more than they did last year. According to the National Federation of Retailers Americans will spend $989 billion this year. Nothing says “I love you” like going into debt.
The Holiday Hangover
Hangover – one definition offered by Webster’s Dictionary is “a letdown following great excitement or excess.” Sounds like how some feel when they open their January credit card statement after a month of overspending. 74% of all credit card purchases for the holidays are made by credit card. Half of all users will carry a balance each month. In 2023, MoneyGeek conducted a survey of 964 U.S. adults to understand how much Americans spent over the holidays, how they financed that spending, and how they feel about it now. Of those who took part in the study 23% wished they had spent less on holiday gifts. The real hangover is when they see how much interest they will pay this year compared to when the survey was done.
Three Things to Consider This Holiday Season
1. Make a list and check it twice. Making a list of exactly what you want to purchase can be an effective way of keeping yourself from overspending and adding to your debt.
2. Put credit card rewards to work. If you’ve already accumulated credit card rewards or points, the holidays can be a great time to use them.
3. Let your family and friends know. If you’re shopping with a smaller holiday budget this year, it can be helpful to let the people in your circle know.
Happy Holidays!
