Ever go gift shopping for somebody else and come away with something for you, too? I have, just recently. I went into a store with a friend, looking for a sweater for my daughter and ended up buying myself two on sale. I hadn’t planned to, but they were good deals, and I got an extra 25% off for using my store card. (Yes — one for you, two for me …)
The retailers know we do it. That’s why the stores advertise a sale as “our gift to you,” or offer buy-one, get-one-free sales. We can rationalize that the second one (the one we keep) was the free one. A survey by Experian showed that 43% of shoppers age 18 to 34 planned to “self-gift,” but only 22% of those 65 or older planned to do that. And 30% of people planned to shop without a set budget. This was in a survey of 1,005 adults, taken between Oct. 29 and Nov. 3, meaning before most of us had started shopping in earnest. (The margin of error was plus or minus 3.5%, but we are talking intentions here, not actual results.)
Becky Frost, senior manager, Experian Consumer Services, says buying a gift for yourself isn’t a bad thing, but she said the combination of relatively young shoppers who are possibly new to using credit cards plus a budget that may be fuzzy could be a dangerous one. Spending without a budget is just not a good idea, whatever your age. So if you’re going to buy gifts for yourself (and anyone else), just be honest and plan a certain dollar amount. It’s not wrong to want a manicure after you’ve stood in line all day. But lots of little treats you didn’t account for in your gift budget can keep it from working out the way you planned. (Or your non-budget can make your credit card bills even bigger in January. See how long it would take to pay off those bills using this calculator.)
This weekend — the last before Christmas — is likely to be one of the biggest of the year for shopping and spending. People are in the stores, and retailers are pulling out all the stops to tempt us to spend. Some are real bargains, and if you wait for even bigger discounts after Christmas, the item you wanted could be gone. Frost says if you have the money and it’s within your budget (there’s that word again), go for it. Ask yourself “if it’s worth the spend,” she advises. Or, if there are people in your circle who plan to give you a gift and don’t know what you’d like, you can share your wishes with them. Your mom may want to know that the winter coat you wanted is on sale now. Or perhaps you just spent some holiday checks or gift cards in advance, kind of. (It’s possible to sell gift cards, though you won’t get full value.)
What & Why We Buy on Impulse
Some of us will spend impulsively. What makes us do it? The Holiday Impulse Purchases Survey from Chase Blueprint found that among millennials, it’s payday. You just got paid, so an impulse buy seems more affordable. If you’re female, you’re most likely to get tempted by clothes (like I did); men are more likely to buy electronics on impulse, according to the survey. When shopping for others, there is a huge difference in which gender spends without a plan: Men are three times as likely to buy an impulse gift for a significant other.
But Chase also points to four ways to avoid unplanned spending:
- Make a list
- Shop with a friend
- Avoid the sale racks
- Have a budget
If you’re joining the crowds this weekend, Frost had a fifth tip: Leave the credit cards in a safe place at home.
“We want people to be credit-confident,” she said in an email. So if, after a long day of shopping, you feel entitled to some sort of reward and your budget has no room, Frost suggests you “think outside the cash register.” An hour with a good book can help you recharge, she noted.
She said it’s good to keep in mind that “the best gift is the gift of financial freedom.” Once the wrapping paper is gone and the gifts opened, little remains but the credit card bill. If you’re worried because you know you’ve already spent more than you should have, take inventory. What do you have, and what do you need? Consider inexpensive but thoughtful gifts.
If you’ve maxed out a card (or more), do what you can to limit the damage. (You can get a free overview of your credit report from Credit.com, along with personalized advice for improving it.) Frost said at the very least you can make it a priority to make payments on time, even if you can afford only minimum payments. From there, you can move to reducing and eliminating balances. And you’ll need to stick with a budg… No, let’s call it a spending plan.
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