Seasonal spending

 

This is an article that appeared in the December issue of the RBS magazine, Sense – it’s about Taming the Pound at Christmas.

 

They’ve taken it off the site now, so here it is:

 

Merry Christmas – Ho, Ho, ……Oh!

 

What’s the best thing about Christmas?  According to a 2006 poll, nine out of ten people said the chance to be with family and friends.  Only one in fifty thought it  was getting presents.  But one in fifteen thought the worst thing was family rows and nearly half that financial pressure was the worst. 

 

We evidently like getting together, to have fun, not arguments, and aren’t too bothered about receiving “things”, but worry about paying for them! 

But with billions spent at Christmas on product advertising that starts earlier every year, there is a lot of pressure to overspend, focus on the presents and money and to be stressed as a result.  Here are some ways to reduce the financial pressure, without creating yet more stress.

 

The unknown is more frightening than any monster (ask Alfred Hitchcock) and we all use the past as a guide to the future. 

 

However, we tend think in emotional terms such as, “I always spend too much at Christmas” rather than practical ones like, “can I use last year’s spending as a budgeting tool?”  So work out a budget.  Who are you buying for? How much do you have?  Look at last year’s bills to get an idea of what you spent, work out what your budget is for this year, allocate it appropriately, and stick to it.

 

Research what you’re going to buy and how much.  Bulk buying, two for one, etc. are only useful if you will use the bulk, otherwise buy only what you need of a cheaper brand.  Advertisers know how we think, “special deals” are designed to make us believe we are economising, that we are being sensible and saving money.

 
But we need to focus on the money spent not on mythical savings, “three for the price of two” is spending on two, it isn’t saving on one.  And buy what you value not labels – if nobody can tell Cava from Champagne, why pay more?  If friends judge you by what you spend not what they taste, are they friends?

 

In our evolutionary past status was very important for survival – the “haves” ended to attract more mates than the “have-nots”.  It doesn’t matter in that way now but we still compete for status, still try to “keep up with the Jones’s”, particularly with conspicuous spending. 

 

And that means you can end up buying ever more expensive items to compete with friends and family.  You are better off sticking with your individual values instead of following the trend.  Set spending limits on presents for everybody’s use – “it’s £X for friends children, £Y for nieces and nephews, £Z for adults” or whatever. 

 

Also, ensure everybody is clear on who is being bought for, it is embarrassing to have your children bought gifts when you have nothing for the giver or their children. 

 

And make a “wish list” and get others to do so too.  If you must get people surprises, keep these to close family members or people that you know (and who know you) really well.  Then you are likely to get something novel that one another actually like and since you might buy several things (such as for your children) you can buy the main things from their list and have a smaller item as a surprise.  That way people get what they really value, costs don’t escalate and you can work out what it all will cost in advance.

 

 

We tend to regard the person who sees the “big picture” as better than the “nit-picker”, and we want to be seen as visionary, and not as one who “can’t see the wood for the trees”.  But try to look at purchases as if they are all separate, focus on the trees not the wood. 

It’s easy to buy something for £19.99 (within a £20 limit), then find that you “might as well”, get the extra batteries for “only” £2.50, the alternate colour stick-on for “only” £1 and so on.  But the extras that each cost a few pence can add up to 30% or more of the original cost.

 

With a camera, time and a computer you can give personalised and artistic cards instead of mass produced ones.  In the same way, making presents is a great way to show you thought about the friend or relative.  And which would you rather have, a gift that says you are worth some effort or a mass produced (but expensive)  present wrapped by the company?  If you are creative it is a way to give something really personal and precious, your own skill, time and care, while saving money. 

 

Most of us want to bring something to say thank you when we travel for Christmas, but if we aren’t sure what to bring, we tend to fall back on standards like flowers or wine.  As host, most of us want to appear well-organised and not need help.  So if you are hosting, let people know what you would like, and if you are travelling, ask what would be useful.  If people bring utensils, food items, etc. that are needed, everybody gets the pleasure of helping, the day runs better and the host(ess) saves a lot of hassle and expense.  It also produces social interaction, which has been shown to increase happiness and to reduce stress.

 

Similarly, involve children in shopping, preparations, cooking and particularly in buying for favourite relatives and selecting what they truly want themselves. 
It teaches them about limited resources and gets them used to prioritising early on (money is not endless, none of us can have all the things we want).  It also gives most children more fun to be treated like adults and to have an important role to fulfil than to be treated like automated present smashers. 

 

Try to give (and appreciate) experiences rather than “things”. 

Material things don’t make people happy – in fact materialistic attitudes are linked to unhappiness.  Every family has stories; like the time the party extended into the street and in and out of neighbours houses, the time Uncle Ebenezer sneezed and knocked over the tree.  We don’t tell stories about or remember the expensive gifts, we remember the experiences of sharing and companionship.  Those are what bind us together, form our memories and make us happy – and Christmas is supposed to be a happy occasion.

 

 

 

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