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The holiday season is a time to express gratitude, reflect on the past year, and spend time with family and friends. However, if you’re not careful, you can end up spending too much on holiday shopping.
According to a recent NerdWallet poll, approximately 83% of Americans plan to buy gifts for friends and family this holiday season.
Americans expect to spend an average of $1,014 on Christmas and other holiday gifts in 2024, up from $923 reported last year, according to a Gallup poll released Oct. 25. “Significantly more.”
According to a survey by NerdWallet, about 10% of consumers plan to purchase gifts from their emergency fund, and 9% prioritize gifts over other household expenses such as utilities and debt payments.
A recent EY survey found that almost half of shoppers will use a loan or credit card to cover their spending this year. Meanwhile, 28% of people are still paying off credit card debt from the 2023 holiday season, according to a NerdWallet survey.
Experts say humans have an innate urge to waste. They are “wired” to be consumers, says Brad Klontz, a psychologist, certified financial planner, and behavioral finance expert.
Klontz, a member of CNBC’s Financial Advisor Council and CNBC Global Financial Wellness Advisory Board, said: “For 99% of the time we live on earth, thinking about the long-term future isn’t very helpful. ” he said. “It was all about meeting immediate needs.”
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Klontz said the short-term gratification of giving a gift to a loved one can forget the long-term focus needed to be successful with money. This is where many people stumble, he says.
“Long-term goals are much more abstract and actually require us to engage in an extra level of cognitive processing to delay instant gratification, so we can overspend,” he says. Said.
Additionally, consumers may feel social pressure to spend more than they would like because they don’t want to appear “cheap,” said consumer finance expert Andrea Wollock. said.
She said many companies also advertise sales on Black Friday and Cyber Monday, for example, that can spark a “buying frenzy.”
How to avoid wasting your holidays
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Experts say there are many ways consumers can keep their vacation plans within reason.
Here are some of their tips.
Klontz said people should start making a spending plan now about how much money to allocate for the holidays. It’s not too late for Black Friday weekend. Consumers can use gift list tracking apps like Santa’s Bag to track purchases and actual spending, Wolloch said. Woroch said he wants people to think beyond gifts. Other items include groceries for feeding out-of-town guests and holiday feasts, holiday party attire, family photos, greeting cards and stamps, seasonal outings, dinners with friends, Fundraising events and donation activities at children’s schools. To accommodate these, she said, you may need to cut back on certain costs or spend less on gifts. Set gift expectations for family and friends now, Woroch said. This might mean focusing solely on the child, or setting up a “Secret Santa” exchange and being responsible for just one present instead of many, she says. Instead of a physical gift, try finding activities you can do together. Or set a gift budget and suggest lowering the amount this year. You can also take advantage of freebies to offset the cost of your gift, says Wallock. For example, she recommends signing up for a free retailer loyalty program to earn money that can be used to buy other gifts. For online purchases, shop through cashback portals like CouponCabin.com and Rakuten. Klontz said to take time to reflect on long-term goals that are “really important to you.” This will help you resist the urge to make short-term purchases.
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