Americans Spend At Least One Paycheck during the Holidays, Don’t Be One of Them

                                            

According to a GoBankingRates survey over 50% of Americans spend at least one paycheck during the holidays. While 22% spend two paychecks, 6% three paychecks, 4% four paychecks, 3% five paychecks and 9% six paychecks. Forty-four percent expect to spend two paychecks on more during the holidays. 

These alarming statistics indicate that Americans need to spend less and save more. It also indicates that Americans are not prepared for a financial crisis such as illness, divorce, unemployment, death of a loved one or a natural disaster.

These statistics show a lack of control, discipline, impulse buying and an eagerness to keep up with everyone else. If Americans saved money throughout the year they would avoid the holiday shame when their credit card bill arrives in January.

Advertisers knows that consumers are triggered by emotion so retailers create advertisements to heavily tap into consumers emotions to encourage them to spend more money. Holiday shopping should equal the amount of money you can comfortably afford to spend – money that will not be needed in the near future for another purpose. 

The best way to curb overspending during the holidays is by calculating how many hours it takes you to work to earn enough money to purchase a specific item. For example, if you feel the urge to buy a large flat screen television that costs $1,000 and you earn $998 each bi-weekly paycheck, it will take you 80 work hours to earn enough money to purchase the television. Here are 5 fantastic ways to avoid spending your paycheck during the holidays.

Create financial goals

Set financial goals that you want to achieve for the next five years. Every time you think about spending money determine how the purchase will affect your financial goals.

AVOID PEER PRESSURE

Ignore peer pressure your family, friends, colleagues, other parents or neighbors to purchase at item even it is for a good cause. If you can’t afford to purchase the item and purchase it anyway you are the only one who suffers.

REEXAMINE SPENDING HABITS

If you overspent during the holidays last year or earlier in the year, examine why you overspent and solve the root cause to prevent overspending in the future.

GIFT GIVING

Reevaluate how you purchase gifts. If you have a large family consider a secret Santa exchange so you are only required to purchase one gift for one person. If your family has a large number of children skip buying gifts for the adults and buy gifts for the children. Another option is to purchase gifts for your immediate family and work with your family to set a general spending limit.

SPEND LESS

Spend less money on those persons you purchase lavish gifts for in the past. If they complain tell them you are on a budget this year and need to stick to your budget. The amount of money spent on someone should not indicate your feelings for the person, i.e. if you spend less money it does not mean you care about them any less.