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By Gift Gumbi Old Mutual Marketing Assisitant | 2024-11-15
The holiday season is here—an exciting time for family, friends, and celebrations. However, it is also a time when many people throw caution to the wind regarding spending.
Whether it is a tempting Black Friday deal, an office holiday party, or just the pressure to ‘keep up with the Joneses,’ it is easy to fall into the trap of overspending.
But what happens when you indulge in those last-minute deals, impulsive purchases, and lavish celebrations? The consequences may not be visible immediately, but they can have a lasting impact on your finances.
Join Gift Gumbi Customer and Marketing Assistant-Old Mutual as he explores the principles of smarter shopping.
The Temptation of Instant Gratification
It’s hard to resist the lure of discounts and offers that seem too good to pass up, especially around Black Friday. You tell yourself, “This is the only time of year to get such great deals,” or “It’s a special occasion.”
But before you know it, you’ve maxed out your credit card, signed up for a store’s “buy now, pay later” scheme, and suddenly, that once-in-a-lifetime purchase seems like just another item cluttering up your home.
David Bach, author of The Automatic Millionaire, once said, “Small choices lead to big consequences.”
These seemingly insignificant splurges during the holiday season can snowball into a major financial headache in the new year.
The Pressure to Keep Up
While gifting and generosity are part of the season’s spirit, there’s also an unspoken pressure to ‘keep up’ with others—whether it’s by spending more on gifts than you can afford or hosting an extravagant holiday get-together.
As “the season of giving” rolls in, many people feel compelled to buy high-ticket items or lavish gifts, not because they want to, but because they don’t want to be left out.
According to financial expert Sallie Krawcheck, co-founder of Ellevest, “The myth that you need to overspend to be generous can do serious damage to your finances.
Giving should come from the heart, not from the pressure to match what others are doing or showing off what you have.”
Emotional Spending and Impulse Purchases
The holidays are often an emotional time. Stress from the pressure of work, family dynamics, and seasonal expectations can lead to impulsive spending as a way to cope.
Whether it’s buying gifts out of guilt, purchasing items to cheer yourself up, or simply indulging in an impulse buy because it’s “on sale,” the emotional triggers that arise during the holidays can lead to poor financial decisions.
The Debt Trap
While it may feel like a temporary fix to your holiday blues, spending beyond your means can have long-term consequences. According to financial planner and author Michelle Singletary,
“Holiday spending can be a financial booby trap. You spend now, and you pay later—sometimes for years.” High-interest credit cards, payday loans, or deferred payment plans may seem like an easy way out in the moment, but they can easily lead to significant debt that’s hard to escape from.
The problem with credit is that it’s easy to access, but it’s hard to escape from.
When your credit card balance balloons after December, the interest charges alone can cause your debt to snowball, sometimes doubling or tripling the amount you originally spent.
What Happens Next?
By the time January rolls around, many individuals are faced with the aftermath of their holiday spending decisions.
The reality check hits when the bills start arriving, and the initial joy of the season fades into anxiety about how to pay it all off. It's a cycle that repeats year after year, leaving people stuck in a financial rut.
But what if, instead of going overboard, you made more mindful decisions during the holiday season? What if you took a step back, resisted the urge to splurge, and considered the consequences of impulse purchases?
The difference could be the difference between a fresh start in the new year and months of financial recovery.
Do not Let the Holidays Ruin Your Financial Health
The holiday season should be a time of joy, celebration, and connection, not financial stress. While it's easy to get swept up in the excitement of discounts, gifts, and parties, it's important to recognise the potential consequences of reckless spending.
A little forethought and planning can go a long way in ensuring that your financial future remains secure, even during the festive season.
We offer employees financial education at no cost, helping you learn how to budget, save, and reach your financial goals—without the stress of overspending.
Get On the Money tips from our website: https://lnkd.in/euBB9uFH or call 2411 7800 for more information.
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