5 Financial Pitfalls to Avoid This Holiday Season

Between hosting and attending holiday parties, gifts, and travel, the bill for holiday bliss can be a big one.

"It's the most wonderful time of the year," Andy Williams sings in the classic carol, but it's also the most expensive. Between hosting and attending holiday parties (wine for the hostess! new sparkly top!), gifts, and travel, the bill for holiday bliss can be a big one, which leaves you with more than family dynamics to stress about. (Most Americans rank holiday shopping as more stressful than traveling or spending time with extended family, according to a survey from e-commerce platform Needle.)

And here's what makes it worse: in a study from Credit Karma, more than half of respondents said they'd impulse-shopped to deal with feelings of stress, anxiety or depression.

"Stress spending is a bit like having coffee while you are stressed: It's an impulsive behavior that you think will calm you down, but all it does is make you feel even more jittery and anxious," Teodora Pavkovic, a psychologist and life coach tells NBC News.

"It's a vicious cycle because our excessive holiday spending plunges us deeper into debt, which then increase our feelings of fear, anxiety, guilt and shame," says Kelli Saginak, a life coach and professor, told the site.

Online spending in the U.S. is likely to grow nearly 15 percent in 2018 to a total of $124.1 billion. That's a lot of Tickle Me Elmos and Fidget Spinners. But don't worry, you can keep your holiday spending in check by avoiding these pitfalls.

You Don't Make a Budget

Savings for Christmas Shopping Clark & Washington

Got a holiday budget of $1,000? Sorry, that's not good enough. You also need to break that number down by person, Zaneilia Harris, author of Finance 'n Stilettos and president of Harris & Harris Wealth Management told US New and World Report. "The more organized you are and the more detailed you are, the better," she says.

It sounds like a job for excel, advises financial columnist Liz Weston. "Spreadsheets aren't exactly warm, fuzzy and cinnamon-scented," she wrote for the Associated Press. "But they allow us to see our total expected holiday spending and to make adjustments as necessary. (Adjustments are always necessary.)"

You Lean Hard on Credit Cards

Money Crashers

"Tons of research shows that people spend more money when they charge things," Kit Yarrow, professor emeritus at Golden Gate University and author of Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail told BankRate. "If you can pay with cash, you'll always be a little more aware of what those gifts cost."

You Let Your Emotions Get the Best of You

Timeline

Guilt gifting. Fear of missing out on a flash sale. When will turntables ever be this cheap again?!? Don't make yourself susceptible to the psychology of shopping.

If someone who wasn't on your budget gives you a gift, respond with a really thoughtful card or homemade gift—not by buying them an impulse bottle of fine Champagne. You want to show you value them, but that doesn't always require spending.

"What people have to remind themselves of is that money doesn't equal love or affection," Yarrow said.

Fire sales can also tap into our lizard brains and our fear of scarcity. Black Friday sales and weekend specials create emotionally charged and stressful shopping situations, and a fear of missing out can override common sense. "When everybody is grabbing for something, we feel we should be grabbing for it, too" she said.

Furthermore, don't let yourself be seduced by slashed prices and big savings, warns The Motley Fool. "If you buy a $500 dishwasher for $300, don't look at it as saving $200, view it as spending $300."

You Forget the Value of a Homemade Gift

Food in a Minute


"For some people, their love language is receiving things," Michelle Singletary, author of The 21-day Financial Fast: Your Path to Financial Peace and Freedom, told BankRate. Who's to say that "thing" can't be a homemade thing?

You can go big with a knit scarf or crocheted hat, or small with cookies, chocolate bark, jams, granola, homemade bread, soaps or candles. What about making beautiful, abstract watercolors and buying frames at Ikea? Aren't these gifts way more thoughtful than an Amazon gift card?

Or what about thoughtful vouchers? The parents of two-year-old twins will be overjoyed at a coupon for babysitting and your best friend would likely love lunch on you and a trip to the art museum.

You Fail to See the Big Picture

Small Business

A guaranteed way to spend your holidays feeling drained is to spend the next six weeks at the mall, looking for parking, and elbowing fellow shoppers out of your path at Williams-Sonoma. What makes the holiday season memorable is all the other stuff: fires, time with loved ones, twinkly lights, rich hot cocoa, and festive events.

Kelli Saginak suggests thinking about how to create a meaningful holiday season "with minimal stress on you, your body, and your bank account.: Ask yourself:

  • How do I really want to feel during the holidays?
  • What type of holiday do I really want to create and experience?
  • What conscious responsible actions will allow me to spread holiday cheer, lower my stress and not add to my money problems?

Celebrating is not the same as shopping, Mary Hunt, founder of DebtProofLiving.com and author of 7 Money Rules for Life, told Bankrate. What we enjoy is the ceremony and the feast of the senses.

"The sights and sounds of Christmas were the reason [my family] loved the mall," Hunt says. "So I would just take a few bucks in my pocket to get a hot chocolate and a cookie. Our purpose was to go see Santa, or to go see the decorations and ride the train." She also remembered the most memorable year being the cheapest.

"The best Christmas we ever had was when we decided to spend $100. The $100 goes fairly quickly. So what do you do for the rest of the season? You visit, you make hot chocolate. We spent the holiday with people and not in the stores. It was, by far, the best holiday ever."

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