The urge to spend money is present all year round, but during the gift-giving season, the temptation to splurge on loved ones can be particularly strong. For many, the desire to be generous during the holidays clashes with the need to conserve funds for essential expenses.
This year, money is tighter than ever, with high prices for groceries, housing and entertainment leaving shoppers with reduced funds as the holiday season descends upon us.
A growing number of individuals are feeling the financial squeeze, with 40 per cent of Canadians citing money as their main source of stress. Seventy-eight per cent of Canadians plan on buying fewer gifts this holiday season and 37 per cent are worried they won’t be able to afford all the items on their holiday shopping lists.
Given that pricier gifts are not necessarily more appreciated by the person receiving the gift, what are some ways shoppers can resist the temptation of appealing, yet expensive, gift options that might strain their finances?
As a social psychologist who studies personal spending, I think it is worthwhile to remind ourselves of self-control strategies that can help us manage financial decisions during the holiday season.
Strategies for resisting temptation
Self-control is not just suppressing temptation; it also involves setting yourself up for success by creating situations that make resisting temptations easier.
1. Avoid temptations
Perhaps the most obvious strategy is to avoid shopping temptations. This may include steering clear of places — both physical and online — that are out of your budget range. While this is easier said than done during gift shopping, it’s an effective way to manage temptations: People who report having an easier time with self-control tend to avoid rather than resist temptations.
2. Make a budget
If you haven’t sat down to make a holiday budget yet, it’s never too late to make one. Considering one-quarter of Canadians are still paying off last year’s holiday debts, being as fiscally responsible as possible is a wise choice this year.
Setting spending limits ahead of time makes your financial goals clear and explicit. When setting budgets for gifts people tend to spend the entirety of the estimated amount (unlike budgets for personal purchases where they try to come in under the budget). It’s good to be realistic, rather than optimistic, when setting budgets.
3. Implementation intentions
Anticipate any potential shopping temptations you are likely to encounter so you can develop strategies to resist them. One effective approach is forming intentions about how you will act once you encounter a temptation.
For example, you might consider what you will do when you see a gadget your friend would enjoy when you have already bought them something and have reached the limit of your budget. Instead of purchasing it and exceeding your budget, you could write down the gadget for next year’s gift.
4. Write a list
Finally, thinking ahead to the gifts you plan to buy and writing a shopping list rather than relying on being inspired in the store might help with sticking to a budget. Consumers spend thousands each year on impulse purchases. Writing shopping lists, even for online shopping, can reduce overall spending and shopping regret.
The best strategy is the one that works
The holidays should be about joy, not financial stress. Maintaining self-control allows you to celebrate without compromising your financial well-being.
There are of course many strategies beyond the four strategies listed here that can help create situations where resisting temptations is easier. The most effective strategies for maintaining financial self-control are the ones you are already using, and the ones you find most effective. If you want to avoid giving in to shopping temptations, take a moment to think about the financial strategies you are already using and think about how you might use them in your holiday shopping.
If you haven’t yet found a strategy that works for you, now is a great opportunity for you to try some out and see which ones are effective. Using strategies to manage the cost of holiday spending can prevent gift-giving from becoming a financial stressor in an already stressful time.
Finally, while adhering to a budget is important, it shouldn’t be the sole or primary focus during holiday shopping. Keep in mind that the true spirit of the season is spending quality time with loved ones. The joy of the holidays doesn’t come from extravagant gifts, but from shared moments and meaningful connections.