Many shoppers are poised to go into debt this holiday season, and for some, emotions are driving their spending. Half of shoppers feel pressured to buy gifts that are out of their budgets or that they can't afford, according to a recent survey by PackageHopper of 1,132 consumers.
Sticking to a budget is never easy, says Luc Wathieu, a professor at the Georgetown University McDonough School of Business who studies consumer psychology and behavioral economics. But when the item isn't for yourself, the pressure to buy the right thing, whatever the cost, is even greater.
"We give gifts to imprint ourselves in the heart and memory of someone, and that's an emotional intention that's usually not there" when you're, for example, just grocery shopping for the week, he says.
Here's why gift shopping can trigger us to spend more money and how to evade that trap.
Because gifts are supposed to be a reflection of how we feel about a person, getting an inexpensive gift might feel rude. "If you are cheap, you're very worried you're not displaying enough love," Wathieu says.
The fact that there is an immovable deadline also pressures us to spend more, he says: "If it's something practical, you can postpone until you find something that's great but also a good deal." With holiday gifts, this leniency doesn't exist.
Sellers know this and avoid offering deep discounts on the season's most in-demand gifts. This year experts anticipate retailers will be even less likely to reduce prices as supply chain issues have caused a shortage of inventory of pretty much everything. In years past, end-of-season sales often featured items that stores wanted to get rid of, but this year, that surplus of goods is smaller or nonexistent.
If you're picking out a gift from a catalog of the season's hottest toys, for example, it's likely going to be pricey and hard to get ahold of. "If it's objectively a good gift to give, the merchant knows it and will jack up the price," Wathieu says.
Instead, buy something that has more meaning tied to it, but isn't as pricey. "If you focus on something symbolic to the context of the relationship, you could buy something that is cheap but means a lot," he says. For example, instead of spending a ton on the hottest toy, buy a toy from a favorite show you and your child like to watch together.
Instead of buying a product that is impressive, go with "something that's less of a standout gift," he says.
You could also think beyond tangible products if you're looking to spend less money on gifts, Teresa Murray, consumer watchdog at Public Interest Research Group, recently told Grow.
For example, homemade treats. "Bake someone a specialty cake of yours or make someone their favorite dish," Murray says.
You can also offer your time. "Maybe it's helping out with yard work or painting the interior of a room," she says. It can be a thoughtful way to make someone's life a little bit easier, all while not spending a whole lot.
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