Holiday Hustle: Reasons Why You Overspend and How to Stop

Overspending is a difficult habit to break, but with discipline and self-awareness, it is possible.

If you’re like most people, you probably struggle with overspending during the holiday season. After all,  it’s easy to spend more than you intend. Learning your spending triggers can help your wallet and overall financial goals. Here are a few reasons why you overspend and ways to stop to help you break the cycle and learn mindful habits.

Lack of Budgeting and Planning

The holidays are a time to celebrate with loved ones and exchange thoughtful gifts. Unfortunately, it’s also a time when many of us overspend. It’s easy to get caught up in the holiday spirit and forget about the financial consequences; however, budgeting and planning are essential.

A budget outlines your income and helps you stay on track with your spending. A plan guides your shopping experience as you pick out necessary items.

Emotional Spending

Emotional spending is very real. When you feel sad, stressed or bored, you might turn to shopping as a way to cope. Emotional spending looks different during the holidays. This means buying gifts or indulging in activities that make you feel good, even if they exceed your budget.

Examples of emotional spending during the holidays include buying expensive gifts or hosting lavish parties to impress your friends and family. Of course, you should celebrate, but you also want to pay attention to your budget!

In terms of typical emotional spending, you can turn to other coping mechanisms. For example, exercising, meditation or spending time with friends and family can help you process emotions.

Lack of Discipline

Having discipline and self-control when it comes to spending money is essential. Conversely, many people struggle with avoiding impulse purchases. With so many sales, promotions and irresistible gifts, it’s easy to give in to rationalizing our overspending.

It’s important to remember that the joy of the holiday season isn’t about the amount of money you spend, but rather the time you spend with loved ones.

Be mindful of your spending habits and identify triggers that lead to overspending. For instance, flash sales or specific stores may tempt you to blow your budget.

Lifestyle Inflation

Lifestyle inflation is another reason why you may overspend. This term describes the tendency to increase spending as income increases. When you start earning more money, it’s tempting to upgrade your lifestyle by buying nicer things; however, things can get out of control and lead to financial stress.

It’s especially hard to combat lifestyle inflation during the holidays as you want to purchase many gifts. Try to live below your means and save as much money as possible!

FOMO (Fear of Missing Out)

Fear of missing out, or FOMO, is a culprit of overspending for people during the holidays. When you see your friends or colleagues buying gifts, going on fancy vacations or dining at expensive restaurants, you may want to keep up with them. Unfortunately, this type of spending is unsustainable and leads to debt. Focus on your own goals and priorities and remember that you do not need to keep up with everyone else.

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