WRITTEN BY: Samantha Matthew -
Glacier Research
Christmas is
a time full of excitement and cheer … we call it the season of giving but the
flip side of this is that we often forget that behind all this “giving” lies a
lot of excessive spending. The holiday spirit is sometimes so contagious that
it can turn even the most frugal buyer into a shopaholic! There are people who
plan and budget for the festive season well in advance but the plain truth is
that such individuals are a bit of a rarity, with the bulk of us being swept up
in Christmas shopping-meltdown frenzy, chasing bargains, trying to get the last
of our gift-buying out of the way. By the 24th of December we are physically
(and financially) exhausted, wondering what we spent our money on and how we
are going to make it until that much awaited January salary arrives.
Irrespective
of the level of income you are earning the tendency to overspend is there and
is fuelled by the media, seemingly bargain buys and outside social pressures to
spend. Everyone would like to enjoy the festive season and the holiday spirit
but the bills at the end of it (worst still if you have bought on credit) is
something that we would all like to avoid. So in the spirit of spreading not
only the good tidings during this year’s festive season, let us also mention a
few helpful ways to avoid being swept away by all the cheer straight into a
mountain of holiday debt.
Start
saving
The best and
most helpful piece of advice that can be given with regards to Christmas
spending is start saving as soon as possible. Although simply saving for the
year end shopping may seem pointless when you could rather be investing in
something long term, the simple reality is that often Christmas spending gets
so out of control that if you don’t plan and save ahead of time you could find
yourself paying off debt accumulated over December for rest of the year to
come.
Start
your shopping for Christmas earlier
Another useful tip is to start shopping for Christmas as soon as
possible. This allows you to not only shop around and compare prices, but also
avoids that fever of last minute buying which often leads to unnecessary
spending. Be conscious that retailers are aware of the fact that along with tidings
of goodwill, the festive season also brings with it the tendency to splurge;
hence they employ a number of strategies to fuel this. For example have you
noticed that over the festive season shops open early and close late; how we
are constantly bombarded with advertisements of sales and bargains; and as soon
as we hit December they start a daily countdown? All of this is done to create
a sense of excitement and urgency and is something that we have grown
accustomed to during Christmas – to the point where many of us feed off this
energy and sometimes use it as a further excuse to spend. By being aware of the
atmosphere that is created, starting early and not getting caught in the rush
and panic of last minute shopping, we can actually have a much more enjoyable
shopping experience and our bank balances will thank us as well.
Use
cash rather than credit cards
Another
practical step that we should try is to use cash when purchasing. It is also
important to note that studies have shown that when people use credit cards as
opposed to cash they spend significantly more. Most people will agree that when
we are buying those Christmas gifts, having to part physically with cash makes
the reality of your purchase hit home much harder, as opposed to simply swiping
the purchases and not actually physically experiencing that dip in your
disposable income right now. However we feel the pinch as soon as credit card
bills come in the mail during the course of the year that follows. Sometimes
one cannot avoid using credit cards all together, so when you do decide to
swipe ensure that it is not on an impulse buy and that you have shopped around
for the best deal. Most of all if you are increasing the amount owed on credit
during Christmas ensure that when the time comes you can pay the instalments
that are required.
Plan a
Christmas budget
Most people
have a monthly budget when it comes to the normal realities of life, but
somehow when December hits we tend to forget this logic. However if we can
apply the same principle to Christmas it places us in a much better position
financially and on a practical level as well. It enables you to keep yourself
in check and prevents you from getting overwhelmed by the hype that could
contribute to spending beyond your means. Having a pre-set budget and list also
means that you are aware of your restrictions and enables you to stop spending.
Once you have your Christmas budget in place, another useful tip is to ensure
you actually keep to your plan, is to keep track of what you have purchased.
This can be done by writing it down in a book or even keeping track on your
phone - basically having the list of purchases physically available and not
trying to keep tally in your head.
Impulsive
buyers stay away from festive season sales
If you are an
impulsive buyer and if you do shop for the sheer pleasure of getting a good
deal perhaps it would be best to stay away from sales over December. The thrill
and excitement of getting a “bargain” or walking away from a huge sale, feeling
like you have truly made a good purchase, soon wanes when you realise you
didn’t actually need what you bought. Remember that in effect those little sale
purchases do eventually add up to a big dent in your bank balance. Although
your secret shopaholic heart may not take kindly to such advice, come
mid-January when you are still financially comfortable, I don’t think you will
miss those “35%-50% sale” items which you didn’t need anyway.
As the festive season starts to begin, with Christmas virtually on our
doorsteps, I am sure that being prudent with regards to spending will be the
last thing on many of our minds. So before we get fully swept up in the
merriment and delirium of the season, I urge one and all to take a step back
and think about the way they will be spending their hard earned salaries and
bonuses over the holidays. Remember Christmas does indeed come once a year and
we should endeavour to enjoy it to the fullest, but not at the expense of
having to pay for it (sometimes with interest) for the months that follow.
