"The 13 worst holiday spending blunders
The holidays are upon us, so start the guilt and self-deception now! Which strategies are yours? Last-Minute Guilty Excess? Manic Martha-ism?
By MP Dunleavey
December 21, 2007
The official Holiday Spending Season is upon us. Are you feeling the pressure?
Some of us felt the squeeze as early as the day after Christmas last year, when stores had their 75%-off sales and we felt compelled to buy gifts a year in advance. Not that we'd admit that in public. Yes, pressure makes you do strange things, and let's face it, we've all done very strange things under the influence of holiday gift-giving angst.
I speak from personal experience. For years, I think I believed that I should buy whatever struck me as the most perfect present for someone (i.e. everyone) and Santa would reimburse me afterward. Either that or I thought that somehow holiday money flowed from a separate, more abundant source than everyday cash.
So think of this as the holiday equivalent of a tornado alert. No, you don't have to hide in the basement (although some people do). Just stay calm, cultivate a rational approach as the high-pressure front moves in -- and keep reading.
Don't underestimate what you spend
Barbara Steinmetz, president of Steinmetz Financial Planning in Burlingame, Calif., is quite familiar with watching her Silicon Valley clientele get into hot water around the holidays. "The more money you have, the less you keep track of it," she notes.
While most of us don't have that problem, Steinmetz says many people seem to have temporary financial blindness when the time comes to purchase presents. She asks her clients to estimate what they spend every year on all their gifts, including weddings, anniversaries, birthdays, graduations, baby gifts and the like. "They usually say between $1,000 and $4,000 a year, which tells me they have no idea what they really spend," she says.
Did you ever stop and add it all up? Sally's bridal shower, Dad's 70th birthday and so on? Neither did I.
Steinmetz says that's why so many of us get into spending trouble over the holidays: "The biggest problem with holiday gift giving is a massive misconception of how much you're spending."
So it may seem too basic to bother with, but sit down now and draw up a holiday budget -- yes, right now. This helps for two reasons:
-It will give you some perspective on what you think you spend versus what you actually do.
-You can panic now before you actually go out and spend the cash.
But even careful spenders can find themselves in post-holiday hell when the January credit-card bills roll in. The holidays are an emotional minefield, and one misstep can blow your budget to smithereens. After months of careful research, calling all our relatives, we've identified the most insidious blunders so that you can venture forth into the malls forearmed.
Guilty gaffes
Not surprisingly, guilt seems to be the biggest source of overspending.
-Homemade gift guilt: Take the year my Aunt Ginny decided to make everyone a special basket, packed with treats she'd made herself: "Oranges with cloves, homemade flavoured coffee, my own home-baked cookies -- even homemade dog biscuits." Then, because she felt like it wasn't enough, she went out and bought everyone a "real" present. "I was crazy that year," she says.
-Equalizing to excess: You get each of your kids (or parents or siblings) an equal distribution of presents. Except... maybe you should get Mom a couple of extra little things because Dad's cashmere sweater obviously cost a bundle. But now Mom has three presents and Dad has only one, so the least you can do is get him a book... repeat until broke.
-Surprise-gift guilt: Your boss, friend, co-worker or neighbour gives you an unanticipated gift. D'oh! You should have anticipated this! You dash out to the store and add yet another item to your overwhelmed holiday budget.
-Reciprocal retaliation: This game is deadly and has a way of snowballing before you realize it. Three years ago, you and your mate gave a couple of your friends a dinky coupon for a free night of baby-sitting. They gave you pricey Broadway tickets. The second year, you ramped up and took them out for a swell dinner. They gave you a case of wine. This year, you just want to win, so you're planning to give them an all-expense paid trip to Guadalajara -- just so they'll back down, and next year maybe you can get back to giving baby-sitting coupons. Won't happen.
-Rejection rebound: In order to save money, you gave someone a gift that you got from someone else, forgetting it was the recipient who gave it to you last year. To make up for this offense, you overcompensate, now and possibly for years to come.
Clearly the issue here is that we think money speaks louder than our intentions. It doesn't. Really. So before you hit the store, delete the guilt files from your operating system.
Procrastination problems
Putting off holiday shopping may cost you.
-Last-minute largesse: It's the night before Christmas, Hanukkah or Kwanzaa and you are out cruising the stores that are open until midnight trying to get all your shopping done in one furious frenzy. But because you realize that this blows the whole "thought that counts" thing, the thoughtless gifts you buy are also wretchedly expensive.
-FedEx folly: You bought your niece in Nebraska a great new CD but waited so late to mail it that you're spending more on shipping than the gift cost.
Really. Why do you think we are publishing this column now, except to give you a shot at shopping in a timely fashion? As financial planner Steinmetz points out, "Those who celebrate Hanukkah at least have some excuse -- those holidays move around. But, hello, Christmas is always on the 25th. So what's the problem?"
Holiday spirit overdrive
It sounds like a '70s lounge band, and maybe it should have been. In reality, it's a financial crime of passion. An insane impulse overcomes you --- holiday joy? The spirit of Santa? Your medication is off? --- and you find yourself committing one (or all) of the following:
-Debt of 1,000 gifts: Getting everyone, I mean everyone, a little gift: all of your co-workers, the woman who cleans your house, the neighbour who jump-started your car in 1986, your baby-sitter, your dentist, etc. -- to the tune of $4,876.
-Parental panic: You lay out all the gifts you got for the kids, and suddenly it's just not enough. You love those kids so much. You can't let them limp into January so deprived. What were you thinking? Back to the mall!
-Manic Martha-ism: For once, you're going to celebrate the holidays in style. You're going to throw that holiday party, take the kids to the "Nutcracker," the Ice Capades and the "Clifford the Big Red Dog Live!" show. You're going to cater a big holiday dinner and fly your parents in, and pay Martha Stewart to inject some holiday cheer into your décor.
Plead guilty, because there are too many witnesses. This year, when you sense an attack of holiday spirit coming on, send a card.
Eggnog wishes, caviar dreams
These are amazingly silly, but common, miscalculations in terms of volume, time or value.
-Shopping by the truckload: You go to Costco or the mall and buy everything in sight, simply because there's so much to buy.
-The 12 days of shopping: You haven't found the perfect gift for her yet. You know you will. Meanwhile, you'll just pick up a pair of these earrings. And a little scarf... And by the time you reach the end of your Quest for Perfection, you have 27 gifts, none of them quite right, except maybe the pear tree with the partridge in it.
-Art-fair amnesia: December is upon you, so you dash out and do all your shopping -- completely forgetting that you already bought half the presents at that crafts fair in July.
These costly little slip-ups can happen in a variety of ways. How to prevent them is unclear. If only we could get them on video. At least you'd get a laugh out of yourself.
The 'unreturnable' impulse
This one deserves its own category because, of all spending blunders, it is the most preventable. Every year countless people fall into a stupor as they enter one of those vile shops full of ceramics, glass and twisted bronze ballet sculptures -- and accidentally buy one for someone they love, who will inevitably hate it.
Two words on this one: Just don't."
http://finance.sympatico.msn.ca/SavingsDebt/MPDunleavey/Article.aspx?cp-documentid=5895749
The holidays are upon us, so start the guilt and self-deception now! Which strategies are yours? Last-Minute Guilty Excess? Manic Martha-ism?
By MP Dunleavey
December 21, 2007
The official Holiday Spending Season is upon us. Are you feeling the pressure?
Some of us felt the squeeze as early as the day after Christmas last year, when stores had their 75%-off sales and we felt compelled to buy gifts a year in advance. Not that we'd admit that in public. Yes, pressure makes you do strange things, and let's face it, we've all done very strange things under the influence of holiday gift-giving angst.
I speak from personal experience. For years, I think I believed that I should buy whatever struck me as the most perfect present for someone (i.e. everyone) and Santa would reimburse me afterward. Either that or I thought that somehow holiday money flowed from a separate, more abundant source than everyday cash.
So think of this as the holiday equivalent of a tornado alert. No, you don't have to hide in the basement (although some people do). Just stay calm, cultivate a rational approach as the high-pressure front moves in -- and keep reading.
Don't underestimate what you spend
Barbara Steinmetz, president of Steinmetz Financial Planning in Burlingame, Calif., is quite familiar with watching her Silicon Valley clientele get into hot water around the holidays. "The more money you have, the less you keep track of it," she notes.
While most of us don't have that problem, Steinmetz says many people seem to have temporary financial blindness when the time comes to purchase presents. She asks her clients to estimate what they spend every year on all their gifts, including weddings, anniversaries, birthdays, graduations, baby gifts and the like. "They usually say between $1,000 and $4,000 a year, which tells me they have no idea what they really spend," she says.
Did you ever stop and add it all up? Sally's bridal shower, Dad's 70th birthday and so on? Neither did I.
Steinmetz says that's why so many of us get into spending trouble over the holidays: "The biggest problem with holiday gift giving is a massive misconception of how much you're spending."
So it may seem too basic to bother with, but sit down now and draw up a holiday budget -- yes, right now. This helps for two reasons:
-It will give you some perspective on what you think you spend versus what you actually do.
-You can panic now before you actually go out and spend the cash.
But even careful spenders can find themselves in post-holiday hell when the January credit-card bills roll in. The holidays are an emotional minefield, and one misstep can blow your budget to smithereens. After months of careful research, calling all our relatives, we've identified the most insidious blunders so that you can venture forth into the malls forearmed.
Guilty gaffes
Not surprisingly, guilt seems to be the biggest source of overspending.
-Homemade gift guilt: Take the year my Aunt Ginny decided to make everyone a special basket, packed with treats she'd made herself: "Oranges with cloves, homemade flavoured coffee, my own home-baked cookies -- even homemade dog biscuits." Then, because she felt like it wasn't enough, she went out and bought everyone a "real" present. "I was crazy that year," she says.
-Equalizing to excess: You get each of your kids (or parents or siblings) an equal distribution of presents. Except... maybe you should get Mom a couple of extra little things because Dad's cashmere sweater obviously cost a bundle. But now Mom has three presents and Dad has only one, so the least you can do is get him a book... repeat until broke.
-Surprise-gift guilt: Your boss, friend, co-worker or neighbour gives you an unanticipated gift. D'oh! You should have anticipated this! You dash out to the store and add yet another item to your overwhelmed holiday budget.
-Reciprocal retaliation: This game is deadly and has a way of snowballing before you realize it. Three years ago, you and your mate gave a couple of your friends a dinky coupon for a free night of baby-sitting. They gave you pricey Broadway tickets. The second year, you ramped up and took them out for a swell dinner. They gave you a case of wine. This year, you just want to win, so you're planning to give them an all-expense paid trip to Guadalajara -- just so they'll back down, and next year maybe you can get back to giving baby-sitting coupons. Won't happen.
-Rejection rebound: In order to save money, you gave someone a gift that you got from someone else, forgetting it was the recipient who gave it to you last year. To make up for this offense, you overcompensate, now and possibly for years to come.
Clearly the issue here is that we think money speaks louder than our intentions. It doesn't. Really. So before you hit the store, delete the guilt files from your operating system.
Procrastination problems
Putting off holiday shopping may cost you.
-Last-minute largesse: It's the night before Christmas, Hanukkah or Kwanzaa and you are out cruising the stores that are open until midnight trying to get all your shopping done in one furious frenzy. But because you realize that this blows the whole "thought that counts" thing, the thoughtless gifts you buy are also wretchedly expensive.
-FedEx folly: You bought your niece in Nebraska a great new CD but waited so late to mail it that you're spending more on shipping than the gift cost.
Really. Why do you think we are publishing this column now, except to give you a shot at shopping in a timely fashion? As financial planner Steinmetz points out, "Those who celebrate Hanukkah at least have some excuse -- those holidays move around. But, hello, Christmas is always on the 25th. So what's the problem?"
Holiday spirit overdrive
It sounds like a '70s lounge band, and maybe it should have been. In reality, it's a financial crime of passion. An insane impulse overcomes you --- holiday joy? The spirit of Santa? Your medication is off? --- and you find yourself committing one (or all) of the following:
-Debt of 1,000 gifts: Getting everyone, I mean everyone, a little gift: all of your co-workers, the woman who cleans your house, the neighbour who jump-started your car in 1986, your baby-sitter, your dentist, etc. -- to the tune of $4,876.
-Parental panic: You lay out all the gifts you got for the kids, and suddenly it's just not enough. You love those kids so much. You can't let them limp into January so deprived. What were you thinking? Back to the mall!
-Manic Martha-ism: For once, you're going to celebrate the holidays in style. You're going to throw that holiday party, take the kids to the "Nutcracker," the Ice Capades and the "Clifford the Big Red Dog Live!" show. You're going to cater a big holiday dinner and fly your parents in, and pay Martha Stewart to inject some holiday cheer into your décor.
Plead guilty, because there are too many witnesses. This year, when you sense an attack of holiday spirit coming on, send a card.
Eggnog wishes, caviar dreams
These are amazingly silly, but common, miscalculations in terms of volume, time or value.
-Shopping by the truckload: You go to Costco or the mall and buy everything in sight, simply because there's so much to buy.
-The 12 days of shopping: You haven't found the perfect gift for her yet. You know you will. Meanwhile, you'll just pick up a pair of these earrings. And a little scarf... And by the time you reach the end of your Quest for Perfection, you have 27 gifts, none of them quite right, except maybe the pear tree with the partridge in it.
-Art-fair amnesia: December is upon you, so you dash out and do all your shopping -- completely forgetting that you already bought half the presents at that crafts fair in July.
These costly little slip-ups can happen in a variety of ways. How to prevent them is unclear. If only we could get them on video. At least you'd get a laugh out of yourself.
The 'unreturnable' impulse
This one deserves its own category because, of all spending blunders, it is the most preventable. Every year countless people fall into a stupor as they enter one of those vile shops full of ceramics, glass and twisted bronze ballet sculptures -- and accidentally buy one for someone they love, who will inevitably hate it.
Two words on this one: Just don't."
http://finance.sympatico.msn.ca/SavingsDebt/MPDunleavey/Article.aspx?cp-documentid=5895749
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