Here's Why we Overspend During the Holidays (and How to Fix It)
The end of the year is always the most risky financially. After the sales, the travel, the gift-giving and parties, paired with time off and limited hours, we often find our hearts filled with joy and our bank accounts rather empty. This can create financial holiday hangovers that aren’t fun to deal with, and can set us off on the wrong foot for taking the New Year in stride. But how do we even get to this place, each and every year?
Psychologist Susan Krauss Whitbourne, Ph.D. dives into the psychological tension around how we shop during the holiday season. According to the Compensatory Consumer Behavior Model, “consumption provides significant psychological value beyond the mere functional utility offered by products and services”. This means that often, when we decide to buy that shiny new thing, we’re not just buying it because we need the product, but we need the quick burst of joy and satisfaction it’ll provide. When we buy things that we believe elevate our status (whether personally, professionally, emotionally or otherwise) we perceive that we’re reducing the difference between our actual and idealized self. In reality, the purchase may be a token of that, but actually do nothing to help us make our vision actualized.
Even worse, we tend to be more lenient with how we spend when we buy for others, even though the same game is in effect. So even if we justify spending an extra $20 on our BFF, it doesn’t mean we’re not falling victim to the same scheme. Add in some spiked egg nog, the cheer of the holiday spirit, and lots and lots of deals, and we’ve got ourselves a prime space to make poor decisions with money.
This holiday season, tap into a few money-positivity practices to avoid being overwhelmed by the frenzy of holiday shopping and sales. Susan recommends eight steps in her article, but here are our favorites:
Remind yourself of what you have
Before you buy, take a hard look at what you’ve already accumulated for yourself. Judge it with respect and appreciation. Give some items that you haven’t used lately some love, or spend some time reflecting on the bills you paid with pride. When you start from a sense of abundance, you raise your self-perception towards your idealized self without spending a dime. You can do the same thing by honoring the person you love before you spend a ton on them, and realize you don’t have to say how you feel with as many dollar signs.
Start with self-worth
Kind reminder: Ads only work if they make us feel like we’re somehow inadequate without the product they’re pitching. Before you start shopping, ground yourself in your actual self. Honor the person you are, and the journey you’re on. And recognize that more money spent may not change how you feel about yourself, or how others view you. When you know your self-worth tank is running low, try to avoid shopping pitches and save them when you’re further grounded.
Acknowledge the thrill of the chase (then let it go)
There is a emotional rush with finding the perfect thing at the perfect price. It’s natural to get hooked on that rush. Before you start shopping, remind yourself that buying it will feel really good, and then decide on other factors of your purchase that should be more important than that feeling. Does it have to be under a certain price point? Abide by fair labor or sustainability standards? Have the option to go under layaway? Write a checklist before you start if it’s helpful!
Remember, the shopping landscape is not designed with your financial wellness in mind, and it’s not your fault to fall victim to the trends and sales. Just remind yourself of what’s most worthwhile – not just during the holidays, but the entire year.