5 Tips to Curb Impulse Holiday Spending
The holiday shopping season may look a bit different this year as more consumers turn to online shopping and options like sidewalk pickup. However, the advertising and promotional campaigns that toy with consumer emotions, encouraging them to spend more on themselves or gifts than they’d planned, are the same.
Consumers expect to spend an average of $1,387 per household this holiday season, according to the 2020 Deloitte holiday retail survey. And with the promotions ramping up earlier than usual this year, it’s an especially important time to be cautious not to wind up in the red because of holiday shopping deals.
When spending is driven by emotions rather than a plan, it can get out of hand. Left unchecked, impulse buying of gifts can lead to serious financial drain. To help Americans combat impulse spending this holiday shopping season and start the new year with their financial wellness intact, here are some tips.
- Shop with a plan. Merchants have powerful strategies to encourage you to spend. So, even the playing field by entering the retail arena with a plan of your own for what you need and can afford. Determine the people you plan to purchase gifts for and how much you’ll spend before you even start shopping. If you have a plan, you’ll be less likely to give into overspending. If something is not on your predetermined list, think before you buy it. Shopping plans can be tweaked if the need is truly there, but an established and realistic plan is the best way to keep your holiday spending habits in check, and help you fight the urge to impulse buy.
- Choose a shopping budget buddy. Share your shopping plan with a friend and ask them to help keep you on track. Give them permission to remind you of your shopping plan if you start to deviate with unplanned purchases. If you want to make a purchase that is not a part of your original list, you’ll have to make the case to your shopping budget buddy.
- Try a cooling-off period. When you see an item that you weren’t really looking for but are about to buy on impulse, try a ‘24-hour rule’ where you place any unplanned purchases on hold to see if you still want them a day later. This will give you a chance to think about whether it really fits your needs and your budget. And you can use the time to shop around online and make sure you’re getting the best deal. After the waiting period is over, if you are still thinking about the product and the purchase doesn’t seem unreasonable, go ahead and buy it. If you’re no longer interested in the item, pat yourself on the back because you just saved money.
- Use technology wisely. Technology has made it easier for consumers to save money on goods and services, but the convenience it offers can lead to increased spending if you’re not careful. According to AICPA research, 41 percent of Americans said that their use of personal technology makes them more likely to pay extra for convenience. Technology can be a powerful saving tool when used to help you find the best deals. However, be aware that your personal electronics also make you a constant target for email marketing and targeted ads which can inundate you with the feeling that you need to buy something you really don’t need.
- Shop before the holidays but purchase after. Some of the best sales occur after the holidays when retailers need to move extra inventory. By identifying which items you want to purchase but then waiting to purchase them until after the holidays, you avoid the temptation to make an impulse purchase and you’ll likely save a good amount of money.
To help keep finances on track this holiday season, check out the AICPA’s 360 Degrees of Financial Literacy website at 360FinLit.com. There, you will find an assortment of free videos and articles about the basics of budgeting, as well as a collection of budgeting calculators to help show and track financial progress.
Every day, local CPAs offer clients expert advice on a wide variety of financial concerns, including making a major purchase or obtaining a loan. Whatever your financial questions, your CPA can help you find the answers. Locate a CPA near you with our Find-A-CPA directory.
Copyright 2020 The American Institute of Certified Public Accountants.