It’s that time of year again… time to throw away your money!
Okay, I mean, it’s time to get ready for Christmas!
For many Americans, spending can get out of control during the holidays.
According to the American Journal of Psychiatry, compulsive spending affects one in 20 Americans, leaving many men and women feeling worse after the holiday than they did before the malls put “Jingle Bell Rock” into constant rotation.
Compulsive spending is an addiction, no different from any other.
You feel bad. You spend.
You feel happy. You spend.
You feel stressed. You spend.
As with drugs or cigarettes, an addict leans on the crutch of shopping to strip their pain, or to help them forget their troubles. It’s hard enough for compulsive spenders to turn their backs on shopping, but when the holidays roll around, it’s almost as though they’ve been given a license to trade their time and money for temporary warm fuzzies.
Even if you’re not an addict, it’s easy for most families to overspend during the holiday season — if for no other reason than the simple joy of giving.
In December 2011, The Economist reported that the United States was the second highest-spending country in the world during the holiday season, second only to Luxembourg. Business Insider reported that families spend an average of $1,000 a year on Christmas for food, gifts, decorations, and cards.
That’s just $1,000. Not that bad, right?
What if you’re already swimming in debt because you’re a compulsive spender? Or, what if the brand new grand is piled on top of a preexisting (and probably high) balance? Maybe your spending habits didn’t let you stash enough cash throughout the year to prepare for the gift giving season, so Christmas equals more credit card debt.
Then that $1,000 becomes a lot more.
On an 18% APR credit card where you pay only the minimum balance, that $1,000 becomes almost $2,000 over the course of the 18 years it takes to pay it off.
Merry Christmas to no one.
Hopefully, you’re not paying only the minimum balance on any card; this is a worst case scenario, of course. But this scenario does exist for many. If you have preexisting debt and are adding this on top of it, putting your gifts and holiday gear on plastic will definitely hurt.
Curbing your compulsion to spend this holiday season will allow you to breathe easy in January and enjoy your New Year’s parties without worry.
5 Steps to Beating Compulsive Shopping This Christmas
1. Get Support
Getting support from a trusted friend or family member is essential to beating the shopping compulsion. This trusted group should be able to talk you down during those times when you feel weak and want to surrender. They should be able to gently prod you into sticking to your goal of buying only what you need.
2. Go Public
Holding yourself publicly accountable can offer some of the strongest incentives to maintaining reasonable spending habits. People hate to be embarrassed, and there are many cases where people take their struggles online, setting themselves up with a challenge that would shame them if they were to fail. If you don’t have a blog, you can use social networks, such as Facebook, to announce your goal and report your progress. Potential failures can help you stay focused on your budget.
3. Plan and Stash
Design a plan and stick to it by taking only the cash you need to buy the gifts you want. Are decorations necessary? No, they’re not. Christmas is about connecting with friends and family. If your house is missing five extra strings of lights on the roof, come up with something different that will enable you to stick to your gift-giving budget. Forgo everything else until you have the money to pay for it.
4. Stay Offline
Remember that Business Insider report that said the average family will spend $1,000 this Christmas? It also says online shoppers spend 22% more than those in stores. So, stick to the brick and mortars when shopping for gifts.
5. Stay Goal-Oriented
Frequently remind yourself to keep your spending reasonable this year. When you wake up, remind yourself. When you walk out the door to shop, remind yourself. When you see things you want to buy (but know you don’t need, for you or anyone else on your list), remind yourself. Let the knowledge that you NEED something be your only trigger to buy.
Do you have any other tips to keep from overspending this holiday season?