How to Avoid Overspending During the Holidays

Broke for the Holidays

The holidays can be tough on your wallet.  It sometimes seems like shopping has become as much of an American pastime as baseball and apple pie. Plus, with the rise of social media, we are spending more than ever. However, one little trick could help you spend less this holiday season, paying for everything with cash.

Holiday Shopping Made Too Easy

With the rise of credit cards and mobile payments, it’s easy to lose track of how much you are spending at each store.  Since your credit card never goes away, your brain is tricked into thinking you really aren’t giving anything up for that new pair of shoes or that new iPad.  However, when you get home and total up all of the receipts you probably are surprised at how much you ended up spending.

A Simple Solution

Paying cash fixes this problem.  Since you have to physically hand over cash your brain sees your resources depleting with each purchase.  Our brains have a funny way of trying to prevent any sort of resource depletion.

After making one purchase, you will probably find yourself questioning whether that sweater is really worth the $50, since that would mean giving up more cash.  While your brain isn’t protective of the never-ending credit card, it is of that cash.  So, by using cash you will start really analyzing more before making purchases, which will probably mean you end up purchasing less.

Of course, by saying you will only pay with cash, you can set a limit of how much you will spend before you go.  If you only take $500 shopping, once that money is gone (assuming you leave those credit cards at home) you’re done shopping.

Again, this limiting factor will help you really think about each purchase before you make it, preventing you from making purchases you regret later.

Remember the holidays are about friends and family, not spending so much that you ruin your budget and are miserable.  Use cash to limit yourself and only buy what you really need, not everything you want.  You’ll be happier in the long run and probably realize you didn’t need all of that stuff anyway.