Holiday marketers have your number, and they know how to entice you to spend.
You try to rein it in. But two
Many shoppers try to be careful instead of making a spending plan. Using a budget can feel like it’s wringing the joy out of a happy season. Why? Giving feels good, says Jeff Kreisler, co-author of “Dollars and Sense: How We Misthink Money and How to Spend Smarter.”
But simply being careful doesn’t work, “because a lot of the reasons we make poor financial decisions are unconscious,” says Kreisler, who’s editor in chief of PeopleScience.com, which applies
However, you can position yourself to recognize — and overcome — overspending triggers.
USE THE BEST
Ashley Feinstein Gerstley, a financial coach and founder of the Fiscal Femme
Be realistic, not rigid, about your budget. Otherwise, controlling expenses can seem so futile you don’t bother trying, she says. “It’s like being on a strict diet and figuring if you cheated and had a cookie, you may as well eat the whole bag.”
If you worry about overspending, consider getting a prepaid gift card in that amount, Kreisler says. It can help you stay aware of what you are spending and what’s left.
Having a successful holiday spending plan may also inspire you to create a budget to help you achieve financial goals throughout the year.
UNDERSTAND HOW SALES CAN COST YOU
Shopping sales can be smart — but only if you’re strategic and aware of the psychology at play. Kreisler says if you see a $100 cashmere sweater marked down to $40, your brain registers “saving $60.” Train yourself to translate that to “spending $40” and compare how it fits into your spending plan.
Then, figure out how much the sweater is worth to you. Would you still want it if $40 was the regular price? It’s the same sweater and the same money but minus the rush of feeling that you got a deal.
Watch out for impulse purchases, too. Gerstley says she’s encountered products she never knew existed while shopping (think
Understand that marketers use one-day sales or even shorter buying windows to create urgency. Fear of missing out can lead to poor decisions; buy only the items you intended to anyway.
KNOW THE TROUBLE WITH COUPONS
Coupons can save you money — or tempt you to upgrade because of your “savings.”
Kreisler says a coupon is great if you’ve been waiting for a discount to buy something specific on your list. If you’ve done your research and buy the item you intended to, using a coupon to drop the price, then you really are saving.
As with sales, it’s important to focus on your spending, not your “savings.” If you have a coupon for $10 off a $50 purchase or $30 off a $100 purchase, would you spend more to “save” more? Stick with what you intended to spend.
KEEP THESE TIPS IN MIND AS YOU SHOP
Kreisler offers these additional tips for spending less:
— Imagine how the holidays would be different if you spent a little less on a particular gift. Would it really detract from the joy?
— If you cannot afford to reciprocate with a gift of equal monetary value, consider giving something else of value, such as offering an evening of child care or creating a painting. Write a note about why you chose the gift especially for the recipient.
— If you want to trim your gift list, discuss it with friends and family shortly after the holidays, when warm feelings abound. Announcing it late in the year isn’t a great idea.
This article was provided to The Associated Press by the personal finance
NerdWallet: Budgeting 101: How to create a budget http://bit.ly/nerdwallet-how-to-budget
Bev O’Shea Of Nerdwallet, The Associated Press