It doesn’t matter what you celebrate or who you celebrate with—the holidays are an expensive time of year for everyone. Between giving gifts and making merry, it’s all too easy to overspend and overindulge. If you’re worried about what the festivities will do to your finances, here are some simple tips that can protect your wallet from the busy holidays.
1. Make a budget
You should know what you can afford on the holidays before you start preparing for them. A budget performs two essential jobs.
- Its ability to account for your money: When you table a budget you have to track your expenses and compare them to your income. This process will show you how much expendable cash you have to put towards non-essential things like the holidays.
- Its ability to help you identify savings: In tracking expenses, you’ll be able to notice whether you’re spending your money responsibly. If you aren’t, you might notice patterns in your spending that shows you have a habit of wasting money on takeout, parking fines, and other unnecessary expenses. Once you’ve identified the worst spending habits you’re most likely to commit, you can work on cutting them out to increase your savings for the holidays.
2. Use a list
Pro shoppers always shop for the holidays with a list in hand. Like the budget, it comes with two primary advantages. The first one is how it helps you focus on gifts that work within your budget. When you sit down to make a list, you’re giving yourself the time you need to research ideas that fit within your price range. Far away from pushy salespeople and overwhelming signage, you can search online stores without feeling pressured to buy something. When you take your list with you to the stores, it’s also a great tool that can help you ignore unnecessary last-minute additions to your cart.
3. Start early
There’s no better way to protect your finances from the expense of the holidays than by saving and shopping as early as you can. Any kind of savings benefit from time—not only because you’ll be making more contributions over a longer period of time, but you’ll also earn more interest on anything you do put away.
When you apply the same go-getter attitude to your shopping schedule, you’ll also end up spending less according to a 2012 survey by the American Research Group. Their findings show a person who waits until the last minute will end up spending as much as $250 more than those who start their Christmas shopping early.
4. Disrupt the shopping momentum effect
The shopping momentum effect describes the probability that you’ll continue spending once you make your initial purchase. Psychologists compare it to breaking the seal. Once you get over the idea of spending money and buy something, you’ll feel more comfortable continuing your shopping spree.
Consider how you’re more likely to buy an add-on item you see in line for the till. Though this add-on item is unlikely to be on your list, you can justify purchasing it because you’re already at the cash and spending money.
Many people affected by the shopping momentum will continue to shop even if they have to rely on credit to get what they want. Others end up having to get an installment loan when their shopping leaves them unprepared for other bills and necessities during the holidays.
While a convenient solution to emergencies, installment loans should never justify overspending. They’re a special cash advance for when things go wrong; not an excuse to splurge recklessly. To learn more about how and when you should use online installment loans, click here. An installment loan direct lender can help you determine when these online loans are an appropriate addition to your budget.
Next time, before reaching for that credit card, try disrupting the shopping momentum by taking breaks between stores. Sometimes all you need is a breather, so try finding an empty bench to sit and clear your head before you go to the next store.
5. Look but don’t touch
Remember when your mom used to tell you not to touch anything when you went shopping with her? She was worried you would accidentally break something. Now that you’re older—maybe even a parent who parrots the same thing to their child—the rule still applies, but it has another meaning. According to the UCLA, people are more likely to buy something if they’ve held it in their hands. Science proves that handling an item — whether a new dress or pair of sneakers — increases your possessive qualities over the item. Once you pick it up, you’re less likely to put it down.
Luckily, the solution to this one is simple. You should stick to your list and only pick up those things you absolutely need for the holidays. And now that you’re older and improved your impulse control, this is a lot easier than when you were a kid shopping with mom.
Now that you’re shopping for mom and all the other people on your list, your approach to the holidays is a lot different. As the most expensive time of the year, you need to be careful with how you spend your money. The only way you can limit how much they end up costing is by organizing your shopping trip well. When you use a budget, list, and other shopping strategies, you can avoid a holiday hangover that you can’t blame on the eggnog.