The psychology of overspending at Christmas


xmas christmas don't get into debt

A recent Money Advice Trust survey of over 2,000 British adults has suggested that borrowing has increased this Christmas, with 35% of those surveyed saying they’d already borrowed or were planning to borrow to pay for the festive gifts this year. In addition, nearly a quarter (23%) are borrowing to pay for food, which is a 2% increase on last year.

Even more worryingly, 23% stated that they felt under pressure to spend more this Christmas than they’d originally budgeted for. It’s not too far-fetched to suggest that at least some of those households might not have a plan to pay that extra borrowing off.

Why are we doing this to ourselves? Various reasons were given for these feelings of pressure, including children, the urgency of Black Friday and similar sales and offers, and pressure from partners and other family members. To a lesser extent, media and advertising promoting ‘perfect families and Christmases’ were said to play a part.

You would think that after a period of austerity – and no major improvement to the economic situation in most households – that we’d be budgeting more effectively, shopping smarter, and sticking to our budgets. Official figures suggest we’re sabotaging ourselves instead, and there’s been a dramatic increase in consumer borrowing over the last 12 months.

Why can’t we simply decide to have a cheaper, affordable Christmas, and stick with that decision? 

What’s really going on, and is there any way that we can fix it?

Obviously there are many factors at play here, but let’s break it down into some of the factors that are driving us to overspend on Christmas gifts and food.

Panic buying, including food stockpiling

At this point in December, one of the biggest risks to our budgets is simply panic buying. Feeling rushed or overwhelmed (also called cognitive overload) leads us to make snap decisions – we take the easiest option, rather than the smartest option, and it ends up costing far more than we’d planned.

There’s also the compounding factor of alcohol. Some of us get so stressed we have a drink or two to calm our nerves before hitting the shops, and we make even poorer decisions under the influence.

To avoid being in debt for months and months during 2016, stay away from panic buying as much as possible. Take a deep breath, calm down, check your budget and make a shopping list for gifts and for food. If you feel panicky again at any point, go back to the list. You’ll probably need a lot less food than you think as well – don’t overload the trolley.

Trying to make kids happy

Yes, a lot of people say that the festive season is all about kids, and it can be a magical time where we make lots of happy memories. However, kids aren’t stupid and they usually can and do understand that money is not infinite.

You are not a monster if you don’t/can’t buy every single thing a kid likes the look of. More to the point, they won’t stop loving you if you ‘fail to provide’. Let’s admit it, this is a deep, dark fear that drives a lot of unhealthy financial behaviour at this time of year – maybe we should stop for a moment and examine this type of deep-seated anxiety.

Most children are able to grasp the concept that they want some items more than others, and they’re able to tell you the things that they want at the top of their wish list. Even tiny kids can tell you Santa only has so much room on his sleigh. Remember this if you’re secretly worried a child will reject you over gifts, and remember that they want more than material goods from you, including your love and approval, time and undivided attention.

By all means prioritise your budget to spend more on the children than the adults, but balance this against the knowledge that overspending in the short term can be bad for the whole family in the medium and long term too.

Striving for a perfect Christmas

Perfection exists in scientific equations, and not much else. In real life, particularly where anything to do with humans is concerned, perfection is impossible.

Perfectionism tends to come from two different places. The first one comes from the sad position of feeling defective, unlovable or ashamed – we can masochistically drive ourselves to be ‘perfect’ to get away from those distressing feelings, but of course we are doomed to fail (perfection is impossible, after all). This situation is often inextricably linked with having one or more demanding, unreasonable family members who are difficult to stand up to.

Don’t be a martyr. You can’t actually make people like that happy, so there’s no point exhausting yourself and your bank account. Re-think the situation: what’s affordable and comfortable for you? State your intentions simply without apologising, justifying or arguing, and repeat as necessary. For example, “I’m cooking [this] for Christmas, if you want something extra please feel free to bring your own”, or “We’re only buying presents for the kids this year.”

Sure, it feels weird the first few times you try acting assertively around certain friends or relatives who aren’t used to it, but it gets easier over time. You can do it without being nasty or looking like the bad guy. The world won’t end if you say ‘no’ every now and then.

Keeping up with the Joneses

The second source of perfectionism is a form of peer influence. Our own lives are messy in their unedited form, and when we look at the increasingly heavily edited outputs that now stream out daily from our friends and acquaintances we can feel very shabby by comparison. Top that with multiple media images of perfect families with perfect homes and armfuls of gifts and you have the perfect recipe for a festive inferiority complex. It isn’t REAL.

We aren’t just keeping up with the Joneses any more, we’re holding ourselves up for scrutiny against an airbrushed, Photoshopped version of the Joneses. With rhinestones on the top for extra sparkle. Also, for all you know the Joneses could be up to their eyes in debt and their tinsel-bedecked house of cards might be about to come tumbling down any minute.

If you’re excessively worried about social status, make a conscious effort to stop comparing yourself to others. Take a few moments to write a list of the things you truly care about, that bring you real joy and happiness. Look back at the positive list of what’s important when you start to feel jealous or ashamed, or you want to compete with others in a harmful way. Over time, you’ll care less and less about ‘losing face’ or appearing ‘not good enough’.

Shifting your focus can help you to prioritise, and is more likely to bring lasting happiness in a way that material goods cannot. You can’t buy a good Christmas, you can only make one, and who cares what other people think?

It’s also linked to another type of peer influence, namely, ‘everyone else is overspending this year, so I can too’. Throughout history, large chunks of various societies have engaged in self-defeating, harmful behaviours: societal norms don’t necessarily mean something is ‘normal’, safe or the right thing to do.

I / they DESERVE only the best!

It’s not really about ‘deserving’ anything, is it? Either you can afford something or you can’t, however entitled you or anyone else might feel. Forget feelings here, do the maths instead.

If you can’t afford it, you can’t afford it. There’s nothing wrong with buying the standard version of something, if that’s what your budget allows, rather than going deluxe. There’s no harm in cutting back a bit, you’ll survive.

Here’s wishing you a cheap, affordable Christmas, and a more financially stable New Year.

Do you have any tips or advice for people who are feeling the pressure to overspend? Please share them if you think it could help.

4 Responses to The psychology of overspending at Christmas

  1. Jackie Tyler December 19, 2015 at 7:42 pm #

    Great article Penny! I like these longer, more thoughtful pieces that you do.

    I always feel like I have to “compete” with my sister to spend more than I can really afford on her children. She almost expects them to receive gifts of a certain standard and if I and other relatives don’t provide them then there’s always a bit of an air on Christmas Day. Horrible really.

    This year I really couldn’t afford to spend much on them so I told her in advance. Thankfully she understood and didn’t make me feel bad. I’m making some smaller and more personal gifts for them instead which I’m sure they’ll like.

  2. Penny Golightly December 19, 2015 at 11:09 pm #

    Thanks Jackie, so glad you enjoyed it. Nice to hear you’ve sorted things out with your sister too!

  3. Hannah Wild December 22, 2015 at 6:02 pm #

    I’ve always felt that I have to compete with the advertising images of perfect families in perfect houses with perfect children, even though I know it’s not really real. I’ve also been guilty of buying everything my children wanted in previous years and then having nothing left to suggest when family asked me what they would like for Christmas.

    This year, this is what I’ve done:
    – Bought some long-lasting Christmas food items like puddings and mincemeat half-price in January (they’re still in date, just!),
    – Made a list for the rest and stuck to it – I definitely identify with the panic-buying as I really struggle to concentrate in the supermarket – definitely get too overloaded!
    – Set a budget for the children and not over-spent. I tend now to only buy things they have talked about a lot, rather than things they’ve expressed a passing fancy for as I know from past experience, many toys will only be played with for a month or two anyway.
    – Agreed with the other adults in our extended families that we will buy for children only and not adults too.

  4. Penny Golightly December 23, 2015 at 4:07 pm #

    Thanks for commenting, Hannah – lots of great ideas from you. I’ve found staying away from Pinterest very helpful as well this December…