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71% of Consumers Make This Holiday Shopping Mistake. Don’t Be One of Them

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Closeup of couple crossing the street with shopping bags at sunset
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A shopping hangover is almost as bad as a real, alcohol-induced one.

I avoid stepping into a mall during the holidays because everything is cast in this glittery, “come and buy me” light.

I too often get carried away buying presents for friends and family. Why does my best friend need a $25 pair of socks? Or why does my mom need a $30 candle? It’s going to melt away within the month.

I’m not the only one. More than three-quarters of consumers overspend on holiday purchases, according to TD Bank’s annual Merry Money Survey.

And it’s not just overspending by $10. We’re talking about an average of $263.

That, my spending friends, is quite sobering.

Why Holiday Shoppers Might Be Overspending

Surprisingly, more than half of the respondents said they do create a holiday spending budget. But why do 76% of those folks still overspend?

Here are some main bank-draining factors:

  • 71% spend more on gifts than expected.
  • 57% buy gifts that weren’t on their list (think: stocking stuffers).
  • 42% purchase items that aren’t in their budget.
  • 41% follow the “one for you, one for me” strategy and treat themselves.
  • 40% spend on holiday-related events.
  • 37% buy treats and snacks while shopping.

But I have to toast my fellow millennials out there. Unlike Gen Xers and Baby Boomers (and me), millennials are more likely to create a budget and stick to it. In fact, they actually spend less during the holidays.

How to Avoid Overspending During the Holidays

Save the hangovers for New Year’s Day.

We have some tips to help you avoid overspending when you’re holiday shopping.

1. Create a Holiday Shopping Budget.

Overspending
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Yeah, yeah. Of those who make the budgets, tons of us totally blow it. (If that’s you, see all of the safety nets below.)

However, if you haven’t created a holiday spending budget before now, do it. It should only take about an hour, and you can use this super-duper easy worksheet we made for you.

Before diving into it, we outlined eight tips to review before budgeting.

2. Be Wary of the Plastic

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Cash is a great way to keep you accountable. When I keep it on hand, I can see my money leaving my wallet, so the feeling of panic might quell my shopping high.

TD Bank’s 2016 survey found 61% of holiday shoppers use credit cards — especially for purchases more than $20. Another 55% use debit cards.

Although this might help you earn some rewards points, consider holding yourself accountable with that cold hard cash.

3. Do. Not. Shop. For. Yourself.

overspending
People shop on Black Friday on November 25, 2016 at International Plaza Mall in Tampa, Fla. Sharon Steinmann / The Penny Hoarder

If your friends are nice enough, you’ll get some goodies for the holidays, too, so there’s no need to buy for yourself.

Yes, I’m totally guilty. If I come across something on sale, I can’t help myself.

If you need help deciding whether something is worth the splurge, use our “should you buy this” flowchart. It’s great for holiday shopping, but it’s also saved on my phone year round.

4. Don’t Forget the Wrapping Paper

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In my family, wrapping paper is an afterthought. We usually rush to CVS or Target on Christmas Eve hoping to find some because, well, we were totally wrapped up (pun intended) in the gifts.

However, there are plenty of ways to get around those way-too-expensive rolls of tacky wrapping paper. Consider, for example, printing your own.

Also something to consider: Does Santa have to wrap all the presents? In fact, I never knew he was supposed to wrap presents. I grew up running into our family room wide-eyed at the open gifts. It was exciting and immediate.

So don’t feel obligated, Santa.

5. Are Stockings Necessary?

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Think about it: Do you really need anything that comes in your stocking? Aside from maybe that new toothbrush you get each year…

Don’t stuff stockings with unnecessary trinkets because you feel like you have to. Sure, it might be a tradition, but stick to the essentials instead.

6. Get Crafty

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Your best bet might be to ditch holiday shopping entirely. Instead, make a present.

Handmade presents always mean more to me, anyway. Check out our list of affordable gift ideas for a few you can make yourself.

7. Remember It’s the Thought That Counts

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Don’t worry so much about overspending for that *perfect* present. (Cough, cough: There’s 71% of you out there!)

Instead, consider this statistic: Only 48% prefer to receive purchased gifts.

Some people don’t actually have cold, hard consumer hearts.

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. After recently completing graduate school, she focuses on saving money.

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