5 Key Signs You’re Already Spending Too Much This Holiday Season
Written by
Crystal Mayer
Edited by
Jenna Klaverweiden
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Holiday spending continues to get more expensive. In a recent Gallup poll, Americans said they plan to spend over $1,000 on holiday gifts this year, representing a nearly $100 increase from the year before.
If last year is any indication, many shoppers will still end up going off budget and overspending by notable amounts. According to an American Express study reported on by CNBC Select, 86% of millennials said they overspent on gifts last year — and not just by a little. More than 20% of people indicated they spent more than they wanted to by $500 or more.
To help you stay on track this year, here are five signs you may already be spending too much this holiday season and how to cut back.
Forgetting To Follow a Budget
One of the most common mistakes people make when holiday shopping is failing to establish a budget. Without a plan, individuals may be more inclined to rely on credit cards or even dip into emergency savings.
A good trick to stay on budget while still enjoying the gift of giving is to make homemade goods for neighbors, delivery drivers, teachers and more.
Shopping Without a List
Another sign of overspending is shopping without a list. The holidays should not be about feeling pressure to buy for everyone. Planning ahead and having a list can help to avoid breaking the bank.
Making a list of what gifts you’ll buy each person and sticking to it is essential to avoid buyer’s remorse in January.
Carrying a Credit Card Balance
If you’re carrying a credit card balance due to holiday spending, that may be a sign you need to cut back. For many holiday shoppers, the ease of buying now and paying later can be too enticing, leading to debt that can take a year or more to pay off. High-interest debt is extraordinarily difficult to overcome, which is why, ideally, credit card balances should be paid off each month.
Instead of using credit cards to buy gifts, consider saving reward points for holiday shopping or implementing a secret Santa or white elephant exchange with your family. Buying one gift can be substantially more economical than trying to buy for every person in a group, and the exchanges are usually pretty entertaining.
Failing To Shop Around
Waiting until the last minute to buy gifts and not comparing prices will generally result in paying higher prices for goods and services during the holidays. While retailers may entice shoppers with “rollbacks” and discount deals, the reality is that the savings may be minimal.
A little research can go a long way in ensuring gifts are purchased for their lowest price.
Impulse Shopping
Impulse shopping can cause overspending at any time of the year, but it can completely derail financial goals during the holiday season. People are often enticed to buy more than they need during the holidays, whether it is for themselves or someone else.
It is essential to be intentional about what is being purchased and how much is being spent. Shopping can be intoxicating and may feel great in the moment, but it can result in regret when the bill comes due.
Online shopping is particularly dangerous for people who struggle with impulsivity. To deter unnecessary spending, leave potential purchases in the cart for two days before buying. This can help to ensure that the product is something that is needed versus something that is temporarily wanted.
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