Tips for Festive Holiday Spending

It’s the most wonderful time of the year ~ Andy Williams

It is once again the final stretch of the year where we wind down and the festive season is upon us! Spending more in this festive holiday season is inevitable. The shops are prepped to induce us to open our wallets. With Christmas around the corner, most people are rushing to get presents for loved ones and Secret Santa. Many of us are also feeling the need to reward ourselves by indulging our material wants and perhaps taking lavish holidays. Do you realise though that with these festive spends, your wallet can thin out pretty quickly?  While it may be inevitable to spend more during the festive season, we can manage money more effectively and avoid over-spending. Read on for some tips on how to manage your festive holiday spending!

1) Make a budget

Based on research, up to 95% of our daily decisions are driven by impulse and subconscious decisions. Some of these decisions can have larger financial implications than others. End-of-year sales such as 11:11 and Black Friday can seem very attractive. If planned carefully, these sales could be a good way of saving a few extra dollars. However, we are often tempted in such sales to make more impulse purchases that contribute to the over-spend. It is hence important to prepare a shopping list and budget. 

Although planning seems straightforward, we often miss out the most important part – leaving a buffer for impulse buys. Managing money with the festive spend can often be thrown to the wind as we get caught up in the excitement and emotions of the season. This means that after you have listed the items you plan to buy, and your budget for each item, add a buffer. This caters for the impulse buys if you know you tend to exceed your budget.  It can help limit your over-spend, avoiding situations where you have to dip into your savings, or go into unnecessary debt. It also allows us to have a reward which releases dopamine in our brains without the corresponding huge damage to our wallet!

That said, the buffer is more of a safety zone, and not an excuse to justify purchasing more items or giving in to impulse buys constantly!

2) Learning to say ‘no’

During the festive season, excitement  about family gatherings, gift exchanges and self-indulgence often makes it harder for us to say no. Our mind would come up with 101 justifications to make us feel excess is ok.

We can over-spend very quickly when we don’t know how to say ‘no’ . If you find yourself saying ‘yes’ to almost everything, try doing this quick exercise of saying ‘no’ this festive season – write down the ‘why’ before making a purchase. This prompts you to consider your motivations behind the purchase. Knowing your ‘why’ helps you gain clarity around what truly ‘sparks joy’ or is done out of obligation/ a fear of missing out . This way, you have a stronger ‘yes’ to your purchases. Likewise, you will also know what you can be  firm in saying ‘no’ to, in order to avoid an over-spend.

3) Set debit/credit card limits or use cash

Do you find yourself spending more quickly when you are swiping your card? I do. When we use a card, it is easy to lose sight of how much we spend. This is especially so given credit cards limits can be up to 4 times our income. We can easily overspend and even get into debt. Particularly during the festive season where we tend to buy more, this can easily balloon our spending.

One way to manage this is to use cash. The visual cue of decreasing cash in your wallet can prompt you to stop spending.  For those of us who still prefer cashless payments, decrease the limit or reduce the number of cards used. This helps us to avoid snowballing credit card debts, which affect our credit score and increase anxiety over debt repayment.

As with the mood of the festive season,  it should be about celebrations and happiness, rather than worrying over our expenditure and having a financial hangover after the new year. These 3 festive holiday spending tips are not just quick hacks for this festive season. Rather, they can be a way to start building positive financial habits for the new year! If you like to learn more in creating financial positivity for yourself, check this article out on creating financial resiliency.