On holidays people spend more money on shopping, partying, and festivals. This anxiety pushes consumers into spending unexpectedly to the extent of acquiring loans from friends and financial institutions. The worst thing is that even after straining on repaying the loan, people will still commit the same mistake in the next holiday.
Are you a victim of spending full annual savings on a single day holiday? Have you tried to drop the habit to no avail? If yes, do not worry since we have compiled a list of the spending habits you should observe on holidays. Although micromanaging yourself may be difficult, take a moment to reflect on the stated habits to avoid such instances in the future.
Paying for services that you never use
In most cases, the habit emerges from influence. Every colleague has a gym membership, why not me? You make a magazine or a news subscription because a friend enjoys it. This may be pointless if you do not use the services. It is equal to drowning your earning in a flowing river. If you have a feeling of using the service in the future, why continue paying for it now? In situations where the habit develops from your exposure to internet advertisements, you can download an app to block them or dedicate some of your internet time to hobbies. If it comes from watching TV and listening to a radio, you can shift to streaming the programs. The truth is; you will still access that service or product once you are ready.
Spending money you do not have
With the increasing number of lenders, some people tend to fund their holiday expenses via debts, payday loans, credit cards, mobile-app loans, and cash advances among others. This is a dangerous idea, especially to a spendthrift. You may forget that you are piling your debt while settling bills using credit cards and the loans balloons if not repaid on a monthly basis. Secondly, the pressure from such loans can lead to psychological and health issues. The solution to this is ignoring the holiday mood and operating within your limits. If possible, you can spend your holidays indoors or leave any document that can help you to access quick loans at home. To run away from such temptations, delete all the instant money apps from your phone and any contact you can reach for a fast loan.
The habit involves making unplanned purchases based on your emotions. However, you will need to get real to conclude that you have the habit. Have you ever visited your fashion designer for a shoe and spotted a classic handbag that you couldn’t leave, or visited a local supermarket for a day to day shopping and end up buying an extra mountain bicycle? The truth is; whatever you bought was necessary but unplanned. Fulfilling your emotional desires may drain all your savings to the extent of getting yourself to debts.
Sometimes the habit can involve spending on affordable items (for instance $2 snickers). Such impromptu purchases may create a significant impact on the monthly budget. The solution to impulse buying is organizing a monthly miscellaneous budget, avoiding the places that get you into it and unsubscribing from platforms that notify you of emerging stuff.
Spending more than you earn
People find it illogical to spend $900 on a single day holiday while entitled to a $600 monthly payment. This is possible although you may not notice the habit immediately since holidays come and pass. If you get used to the routine, you will find yourself reaching for your savings, borrowing from friends, or approaching a financial institution for the same. Sooner or later, you will have no one to contact for financial assistance. What will you turn to? Scamming?
To avoid the situation, it’s always important to spend according to your financial capabilities. Do not let the holiday anxiety shake your stand. Always remember, you will bear the consequences alone after the holiday. Secondly, after exhausting all what you have, what will spend the coming holiday? Make a habit of relying on what you have. If you find it hard to spend responsibly, then establish a holiday budget and work towards funding it. For instance; you can list the number of holidays in a year and set aside a portion of your savings. Also, you can start up a side hustle to cater for such expenses. If you are a victim of this, you will be forced to squeeze your budget to settle the debts then apply the advice.
Settling debts with debts
Are you the type that pays off debt with another debt? If not cautious the habit will make you a recurrent debtor. This is because; if you owe a particular lender $100, you will be pushed into borrowing $120 or more from the other lender (depending on the interest) to settle the whole amount. To repay the $120 debt, you will require around $140.If the trend continues, it might be difficult to control it. To get out of this, you will need to inject a lump sum (from savings, dividends, or, part-time job) then, try to monitor your spending habit by establishing a workable budget.
Secondly, if you have multiple lenders, you can calculate the total debt and approach a low-interest lender to clear the rest. After that, you can set up an amicable plan to repay it. Besides that, the idea of transferring a credit card balance from a high interest rate card to a lower limit one may be beneficial. However, trying the concept demands some caution to ensure that the balance transfer fee neither nullifies the interest savings nor worsens your card’s post-promotional interest rate.
Using credits when you have cash
Some people find it convenient to make payments via credit cards even if they have cash while others feel a loss of using theirs. What is the essence of you accessing the money? These individuals tend to forget that they are digging a debt-pit which they must fill in the future. If you hold some cash in your wallet, it’s convenient to use it since cash purchases are cheaper than credit card ones. To avoid such a situation, get used to shopping for necessities depending on your financial capabilities. Remember, the amount used on credit shopping will be repaid with extra charges using your cash.
Buying everything that is on sale
During the holidays, a significant percentage of stalls have unavoidable discounts and commissions. Some will move to the extent of advertising in Print Media, social media platforms, and television. The suppliers set such sales-trap to convince their customers to buy their products. For instance, if you walk into a supermarket to buy some kitchen wares and find almost everything is selling at a discount, you might feel obligated to buy things you never needed at discounted prices. There is a possibility that you didn’t need the items that’s why you hadn’t planned on purchasing them. The solution to this is ignoring the discount excitements to avoid making purchases you will regret later. Secondly, the seller might place similar offers in the next holiday, stick to your budget!
Eating out frequently
As earlier stated, holidays are associated with resting and partying, and that’s why a significant percentage of people find themselves going out for meals. Nothing is wrong with placing pizza order occasionally from your favorite snack-point or going out for a chicken meal but getting used to this may strain your income. The habit develops from laziness and failure to prior plan, therefore, instead of falling for this you can try to prepare the delicacies at home.
Carrying with you a credit card or debit card
If you do not need anything, refrain from having a shopping card in your wallet while going out. That way you can monitor your expenses. In addition to that, making shopping card purchases may facilitate making unnecessary purchases. For instance; if you carry your debit card to a club, you may end up spending more than you imagined. It is said “out of sight, out of mind” if possible, make your night-out budget, organize some cash, and enjoy responsibly. If you cannot access some money, you must be sober enough to control your expenses.
Make everyone around know that you want to spend less this holiday. Sometimes your friends and relative can push you into overspending. For instance; if you have a “partying- animal” friend, inform them about your plans in advance. Secondly, make a list of your necessities in order of urgency and place it in a place accessible to anyone. If not enough, set reminders on your phone or stick a list of your priorities in your wallet or at the back of your shopping cards.
The holiday mood can push you into spending unnecessarily. However, pocketing your credit card or debit card has a significant impact on the habit. This is because; making unplanned purchases can drain your annual savings within a week. Be accountable for your holiday expenses to ensure that you won’t run in deficits or turn to loans after the holiday. Always remember, there will be life after the holiday.