The holidays are here, and in addition to festive time spent with family and friends, for most of us it means a small fortune spent on gifts and other non-necessities. Were you tempted by the Black Friday and Cyber Monday sales offers? Were some of the sales so good that you veered off your gift list a bit, buying items for yourself in addition to a few other holiday extras? Did you internally justify going over budget because, “Heck, it’s the holidays! I deserve to splurge a little!”? Were you careful to keep a “what I don’t know can’t hurt me” mentality about you and your spouse’s financials, staying in the gray to ward off any guilt that might come with overspending?
If you answered yes, yes, yes and (embarrassed blush) yes, your brain has been hijacked by the psychology of overspending.
“This is a very difficult time of the year to stick to a budget and the reasons why are numerous and complex,” says Leslie Greenman, a financial advisor and author of the new book Dating Our 
Money: A Women’s Guide to Confidence with Money & Men. “One of the biggest reasons is that women tend to be givers and pleasers by nature. We want to buy great gifts for friends and family members. We want to get the best-looking decorations for the house.
“We convince ourselves it’s okay to overspend because Christmas only comes once a year!” she adds. “This is our time to forget the budget and do whatever we can to make those around us happy. So in the name of making the holiday the best one ever, we carefully avoid the truth about our financials. After all, if we don’t know for certain that we’re going way over the family budget, then what’s stopping us from spending a little more on the kids’ presents or buying that new dress for the office party?”
The nature of holiday spending—the fact that we’re buying for others and not ourselves (in theory anyway)—increases our tendency to overspend. While it’s nice to give someone something they want,” says Greenman, “that good feeling will quickly fade when you see how much your holiday spending affected the family’s finances.”
Here’s how to better understand the psychology of overspending and what you can do stop it:
Get real about your financials. Before you step out the door to head off to the next great sale, you need to be honest with yourself. If you’re going with a spouse or mate, sit down beforehand and have a heart-to-heart about your financials. Make sure you both understand what the budget will allow for in holiday spending this year.
“Look at how much you can realistically spend,” advises Greenman. “Make sure your holiday spending will in no way negatively affect your bigger plans. Too often, women think of the financial picture like it’s a black hole. Credit cards are a huge cause of this because they allow us to avoid the reality of debt. We can just whip out our credit card without taking an immediate hit in our bank account. But that has to stop.”
Don’t let the psychology of the sale get the best of you. Shoppers were out in droves this year on Black Friday in part because they were hammered with promotions on sales that that were just too good to resist. When there’s a great sale, two factors are usually used to justify spending, explains Greenman. First off, we fear that if we don’t take advantage of the sale now we might not be able to get that item later. And secondly, most women love to feel like they’ve gotten a great deal when they’re shopping.
“Even if the on-sale item is still too much for your budget, you convince yourself that it’s ok to splurge a little in this case because the deal being offered is so good,” she says. “But let’s be honest. Going over budget is going over budget. It doesn’t matter what purchase is deepening your debt; just that your debt is increasing. So don’t let holiday sales get the best of your budget. If an item is too much for your personal financial situation, don’t buy it.”
Don’t shop for yourself. According to the National Retail Federation’s 2011 Holiday Consumer Intentions and Actions Survey, the average person will spend $130.43 on themselves while holiday shopping. When you’re making it okay for yourself to do a lot of spending, it can be difficult not to stray off your list and buy a couple of things for yourself.
“We have all done it,” says Greenman. “You see something you like and think, Wow, that is so cute. I will buy one for so and so and one for me. But before you spend, consider some money-saving alternatives,” she suggests. “You could borrow a dress from someone or add an accessory or a great pair of shoes to a dress you already own. In fact, this is actually a good reason to organize your closet. When you can easily see what you have, you can quickly put together a great holiday outfit without spending a dime. ”
Don’t shop when you’ve got the holiday blues. This time of year can bring a lot of joy, but it can also be overwhelming and stressful. What’s more, the holidays are filled with grief triggers—sights, sounds and smells that bring back memories of days past when life was better and loved ones hadn’t yet passed on. Those holiday blues, whether we understand why we’re feeling them or not, can pose a pocketbook problem: studies have shown that we are willing to spend more when we’re sad.
“Avoid shopping when you’re having a down day,” advises Greenman. “Curl up and watch a holiday movie or go do something fun with your kids instead. Save the shopping for a better mood. ”
Invest in relationships, not in “stuff.” It’s perfectly natural to want to give back to those who give to you. It feels good to watch a friend open the gift you’ve given her or to see your son’s face light up when he sees Santa brought him everything on his list. This satisfies the nurturing instinct in women, in particular. And it also helps us assuage the guilt we often feel for the shortage of time we have to spend with our loved ones. What we need to realize is that what other people really want, kids and adults alike, is our presence (not our presents).
“According to a Consumer Reports poll, holiday shoppers will spend approximately 19 hours shopping and 3 hours standing in check-out lines this holiday season,” says Greenman. “Aren’t there much better ways we could be spending our time? Rather than throw down cash to buy the video games your son wants, spend a day with him doing the things he loves to do. Suggest to your best friend an afternoon together meeting for coffee and going to a movie. Or treat your parents to a home-cooked meal and some Christmas carols performed by their grandkids. You can also take this a step further and make it even more gratifying for everyone involved. Suggest to your loved ones that the time you spend together be used to volunteer for a local charity—a great way to enjoy the true spirit of the season!”
Establish an “Operation Holiday” plan. Once you know what your budget is, start mapping out your shopping plan. Make the gift list and then think about where you’ll need to go to purchase each present. The specificity will override the “vagueness trap” that allows us to fool ourselves about how much we’re really spending.
“The more specific your plan, the easier it will be for you to hold yourself accountable to it,” notes Greenman. “Keep your key goals in mind, both short-term and long-term. For example, are you trying to keep each gift under X amount of dollars? Do you want to be finished by a certain time? Do you still need to have enough money left over in the budget to make your monthly donation to the family summer vacation fund? Don’t sacrifice your long-term financial plans to satisfy short-term holiday spending cravings.”
Don’t put off your shopping until the week before Christmas. It is best to start your holiday shopping as many shopping days before Christmas as you can. Procrastinating will only send you into a state of panic that usually ends in overspending.
“As the holiday gets closer and you realize you haven’t even made a dent in your list, you’ll start to get desperate,” explains Greenman. “And when you’re desperate, you won’t have as many misgivings about going over budget in order to get your shopping done. You’ll also have less time to finish your shopping so you’ll think you have to get whatever is available. ‘Shop early and save’ should be your new motto. Another positive to getting all your shopping out of the way early is that it gives you more time to kick back and enjoy all of the fun festivities leading up to the holidays.”
Set a holiday shopping curfew. You don’t have to go tearing through stores, pushing innocent shoppers from your path (or spraying them with pepper spray as one much-publicized shopper did on Black Friday), but setting a time limit on your shopping will help you keep your spending impulses in check and stay on budget.
“When you know you only have until 3:00 p.m. to finish your shopping, you won’t linger in the women’s clothing section until you see something you want to buy for yourself,” notes Greenman. “It also keeps you from going to sections of a store that you know don’t contain any items from your list but that are just fun to spend time in. Remember, the less time you spend shopping, the more time you’ll have to spend with friends and family.”
Remember, it’s the thought that counts. You might find the perfect gift for someone but then reject it because you don’t think the price is significant enough to be an adequate gift. That’s because we unconsciously equate love with money. Not only is there absolutely no connection between the two, this self-imposed spending minimum can lead us to bypass meaningful gifts in favor of expensive, less meaningful ones (which the recipient may not even remember by Christmas of next year).
“A gift with a lot of thought behind it or shared meaning for you and the recipient can have far more significance than a more expensive item,” says Greenman. “For example, a special photo of you and a friend in a frame with a special note about how much you enjoyed the time you spent together is a great gift. Or have your kids write down the 10 things they love about their grandparents and include the list in a photo album of the kids. These are all gifts that involve more thought and meaning than just going to the store and buying a gift. And the people receiving them will truly appreciate it.”
Make a list, check it twice, and bring cash! How many times have you walked into a store and immediately found the perfect gift for a friend? Sure, you hadn’t planned on spending that much, but she would love it, so why not? You can just put it on your credit card, right? Wrong, says Greenman. Buying on credit is a trap to be avoided if at all possible—and the best strategy for defeating temptation is to bring a list you don’t veer from and only the cash needed to purchase the items on it.
“If you use your credit card, you’ll probably end up buying those gifts two or three times over in interest payments,” she notes. “Do not stray from your list. If you do stray, the cost of the non-list item needs to be the same as the one you had already budgeted. Bring only cash with you when you’re shopping, or at the very least, use your debit card or write a check.”
Don’t shop with a holiday budget saboteur. If you prefer doing your shopping with someone else in tow, choose someone who won’t encourage you to go off budget. In fact, make sure it is someone who will truly hold you accountable. Many people are easily influenced by the behavior of their friends. When they’re with free spenders, they become free spenders. Likewise, when they’re with more disciplined friends, they’re influenced by this positive peer pressure.
“If I shop with one of my girlfriends, I know it could quite possibly turn into a several hour affair,” notes Greenman. “I also know that some of my girlfriends would rather encourage me to splurge than support me in my efforts to stick to a budget. If you’re going to pair up with someone to do your holiday shopping, make sure it’s someone who’s going to keep you on track. For example, maybe your mom is a stickler when it comes to managing the family budget or maybe using the holiday shopping outing to educate your kids about sticking to a budget will help you hold yourself accountable as well.”
Point, click, and save. The benefits of online shopping are obvious. You don’t have to battle holiday traffic, it is practically hassle-free, it’s easier to compare prices, and best of all, it allows you to resist the temptations that come along with being in a store.
“When you’re in a store it can be really tempting to wander off your plan and start looking at items that aren’t on your list,” says Greenman. “Because you can search for specific items, online shopping helps you to stay on task. It also provides a greater selection of those items so that you can easily compare cost and quality. And usually free shipping is offered around the holidays!”
Don’t be afraid to regift. Regifting has a stigma attached to it. Many people feel it violates gift-giving etiquette. Maybe they think it makes them feel like an unimaginative gift giver or perhaps like a poor person. But remember, you’re opting out of the herd mentality this year anyway. Take a new look at regifting. When done well it can help you find a home for items that you’re never going to use and make the day of the gift recipient.
“There is nothing wrong with regifting items that you haven’t used and that you know someone on your Christmas list would like,” says Greenman. “Sure, there is a line that has to be drawn. If your grandmother got you a sweater you hate, but she expects you to wear, then that’s probably not an item that you should regift. Suck it up and wear it! But let’s say a former colleague got you a scarf as part of a Secret Santa exchange at work last year. It’s a perfectly nice scarf, but it’s a color that just doesn’t look good on you. That’s a great item to regift. You’ll get it out of your house, and someone else will love having it.”
“Other great options are unused gift cards—as long as they haven’t expired— or clothes or other items either with the tags still on or still in their original box that you never used,” she adds.
“Don’t convince yourself that just because it’s the holidays it’s okay to ignore your budget and overspend,” says Greenman. “If you don’t know the big picture of your current financial status, then make sure you have a very clear understanding of it before you start your holiday shopping. Remember you can give a lot without spending a lot. Stick to your budget and then be generous with your time and spirit. Once the holidays are over, you’ll be happy you didn’t blow your savings, and you and your family and friends will be fulfilled by the time you all spent together.”
Leslie Greenman, left with two small boys when her husband unexpectedly passed on at age 35, is currently a financial advisor, author, and public speaker. Through her book, Dating Our Money, her goal is to make financial planning fun and relatable for all women.
Dating Our Money: A Women’s Guide to Confidence with Money & Men (AuthorHouse, 2011) is available at bookstores nationwide and from major online booksellers.
