Curb impulse holiday spending with these 5 tips
The holiday shopping season may look a bit different this year as more consumers turn to online shopping and options like sidewalk pickup. However, the advertising and promotional campaigns that toy with consumer emotions, encouraging them to spend more on themselves or gifts than they’d planned, are the same.
Consumers expect to spend an average of $1,387 per household this holiday season, according to the Deloitte holiday retail survey. And with the promotions ramping up earlier than usual this year, it’s an especially important time to be cautious not to wind up in the red because of holiday shopping deals.
When spending is driven by emotions rather than a plan, it can get out of hand. Left unchecked, impulse buying of gifts can lead to serious financial drain. Here are a few tips to help Americans combat impulse spending this holiday shopping season and start the new year with their financial wellness intact.
Shop with a plan
“In today's culture of online retail -- undoubtedly heightened by COVID-19 -- it seems that the entire world is within reach without even changing out of your pajamas. While it is certainly easier to click ‘buy’ than drive to the store, find your items, and wait in line, it may lead to irresponsible spending,” said Jane Rubin, CPA, member of the American Institute of CPAs National CPA Financial Literacy Commission. “It is even more important this year to have a plan for your holiday shopping, so you don't find yourself in a difficult financial position and unable to enjoy your new purchases.”
Merchants have powerful strategies to encourage you to spend. So, even the playing field by entering the retail arena with a plan of your own for what you need and can afford. Determine the people you plan to purchase gifts for and how much you’ll spend before you even start shopping. If you have a plan, you’ll be less likely to give into overspending. If something is not on your predetermined list, think before you buy it. Shopping plans can be tweaked if the need is truly there, but an established and realistic plan is the best way to keep your holiday spending habits in check, and help you fight the urge to impulse buy.
Choose a shopping budget buddy
Share your shopping plan with a friend and ask them to help keep you on track. Give them permission to remind you of your shopping plan if you start to deviate with unplanned purchases. If you want to make a purchase that is not a part of your original list, you’ll have to make the case to your shopping budget buddy.
Try a cooling off period
“In order to avoid ever-enticing impulse purchases this holiday season, it’s prudent to take a step back and assess whether it’s an actual ‘need’ or more of a ‘want,’” said Michael Landsberg, CPA/PFS, member of the American Institute of CPAs National CPA Financial Literacy Commission. “Try putting an unplanned purchase on hold with the retailer or implementing your own personal ‘cooling off’ period where you allow a certain amount of time to elapse before making a purchase decision. This will allow the initial adrenaline burst to subside and for you to make a level-headed decision.”
After the waiting period is over, if you are still thinking about the product and the purchase fits your needs and your budget, go ahead and buy it. If you’re no longer interested in the item, pat yourself on the back because you just saved money.
Use Technology wisely
Technology has made it easier for consumers to save money on goods and services, but the convenience it offers can lead to increased spending if you’re not careful. According to AICPA research, 41 percent of Americans said that their use of personal technology makes them more likely to pay extra for convenience. Technology can be a powerful saving tool when used to help you find the best deals. However, be aware that your personal electronics also make you a constant target for email marketing and targeted ads which can inundate you with the feeling that you need to buy something you really don’t need.
Shop Before the Holidays but Purchase After
Some of the best sales occur after the holidays when retailers need to move extra inventory. By identifying which items you want to purchase but then waiting to purchase them until after the holidays, you avoid the temptation to make an impulse purchase and you’ll likely save a good amount of money.