Last week’s blog post mentioned Halloween spending hangovers. As of 2019, Halloween had become the second biggest holiday for consumer spending, after Christmas. What used to be a couple hours of candy collection with a homemade costume and a paper grocery bag is now practically a national holiday. More candy is consumed. More costumes are purchased. Yard decorations have grown to need extension cords with extensions. When it’s all over, where does all the stuff go? In the attic, the garage, the storage unit, or the garbage? Thus, the Halloween candy-and-stuff hangover.
Next comes Thanksgiving, where we stuff ourselves with, literally, stuffing. We stuff our brains with football and TV. Some families stuff all of the important conversations for the past year into a few hours at the table. Emotions can run high, especially this year. Thus, the Thanksgiving stuffing-football-and-family hangover.
And finally, Christmas, the king of holiday stuff. Decorations, trees, food, family, parties, gifts, more candy, cake, and alcohol can all lead to some kind of hangover. When it’s all over, depleted bank accounts and depleted emotions can cause the same headaches as chip dip and eggnog. Christmas – king of hangovers.
Help Avoiding Hangovers
When it comes to holiday hangovers, how do you get through without them?
What do overdrinking, weight gain, TV watching, family dynamics, and overspending have in common? The most successful way to deal with them starts with the same concept: mindfulness and awareness.
One example of a mindfulness program is Weight Watchers, which I joined in December 2000. The best tool the program gave me was the daily journal. Logging what I ate every day had more impact on my decision making than any other single factor.
As another awareness example cited by behavioral economist Richard Thaler, when a group of experimental homeowners were given an electric meter next to their thermostat, they used 7% to 19% less electricity than those with outside meters. Another proof that awareness works.
3 Spending Mindfulness Ideas
The most effective, and for some, drastic, way to become aware of your spending is to switch to cash. However, in today’s world, with fewer in-person transactions, you might use a prepaid debit card instead. Recommendations for those with no fees and other features can be found here: https://www.thebalance.com/best-prepaid-debit-cards-4160419.
As you are spending, you see your cash disappearing in your wallet, or, your balance going down on the card.
Debit cards are safer than cash, but still a big pain if your number is stolen online.
Credit Cards? Not Very Mindful
Credit cards are like having the electric meter on the outside of your house. The awareness comes after-the-fact, in the bill. You never get to compare what you have spent to a predetermined budget, or to the amount available in your bank account. Psychological studies show that when used in stores, since the credit card is handed back to us, it reduces the feeling that we have spent anything. Similarly, when we use it at our computer, we still have the card. Our wallet looks the same afterward. To the primitive part of our brains, we don’t feel any loss like we do when the cash is gone from the wallet or the debit card balance is lower.
But I Get Points! Or Cash Back
Credit card companies have done a great job getting consumers to use them habitually by offering points and cash back. To build spending awareness and still get the credit card benefits, have the company send a daily or weekly reminder of your charges and the current balance. (Not all companies will do this, tragically.) Then, transfer your charges for that period from your bank account to the credit card balance. At the extreme, you might make 30 payments on your credit card over the holidays, but so what? It’s helping you avoid the hangover.
[For a post on points vs. miles vs. cash back, see https://www.hollydonaldsonfinancialplanner.com/might-as-well-face-it-were-addicted-to-miles/]
So if you are concerned about how you will get through the holidays without financial regret, switch up your spending habits. Use some tricks and tools to stay mindful.