Enjoy this “Closing Thoughts” guest post from OSB’s Mortgage Lender, Kacie Eberenz (NMLS# 1458409). Looking for mortgage loan advice to help you purchase real estate in Michigan’s Lenawee, Jackson and Washtenaw Counties? Contact Kacie today!
Most of us are well aware that we shouldn’t spend more than we have. Yet many of us spend more than we should—or we can afford—especially around the holiday season. Financial experts estimate that last holiday season, about 25 percent of American consumers went into debt to purchase gifts and other seasonal items—why is this?
Accumulating holiday debt is often a tied to self-defeating emotions related to money that kick into overdrive once the season of indulgence arrives. While this time of year may push some consumers over the edge financially, it doesn’t have to. The key to controlling spending during the holidays (or any other time of the year) is understanding why you are prone to overspending and participating in other negative financial behaviors, such as not saving enough money.
Here are some tips to help you reduce holiday debt and identify the emotional financial triggers that may lead you to overspending:
Make a holiday budget and shopping list. This may seem elementary, but many people do not set a budget for holiday spending or shop from a list. This is the first step in eliminating self-defeating spending behavior. Determine what you can afford, then make a list when you are in a rational, rather than an emotional mood. Put the list in your wallet and use it to check off the items you need, so you can see visually what you should be purchasing, rather than shopping spontaneously.
Become aware of the feelings that accompany emotional holiday spending. Identifying the emotions that lead to spending more than you should is essential to getting to the root of the problem. Do you find yourself spending more when you are stressed, sad, happy or angry? If so, give yourself an alternative to spending when you are feeling these emotions like taking a walk or writing holiday greetings to family and friends. If you’re spending to try to compete with others, acknowledge this as a poor strategy that is only going to get you deeper into dept.
Identify external emotional spending triggers. Your feelings can certainly drive impulsive spending, but there are likely external influences as well. If you find that you spend more at a mall or browsing online, or when you receive promotional emails, avoid those triggers and find alternative places to get the things on your list that you really need.
Ask for accountability—and support. It’s too easy to overspend and mismanage money when you are only accountable to yourself. Enlist the support of family or trusted friends to help you curb your spending habits. They can help you avoid situations when you may be prone to overspending and help to remind you about your financial limits and goals!
The holiday season can be a tough time on anyone’s budget, and if you are prone to letting your emotions get the best of you when it comes to spending, it can be even more challenging—but it’s not impossible. Use the tips above to help you manage your emotions and your money. If you do, you’ll be feeling much happier and in control when January rolls around and you have little or no holiday debt!