Money

Shrug Off the Holiday Shopping Mindset — Budgeting Tips for a New Year

Budgeting Tips

A holiday of giving is a holiday of spending. It might take some time to break this habit, but it’s possible to get back to your thrifty ways. With the right tricks and tips under your sleeve, you can reset your budget and recover your savings in the new year.

Shopping is a Habit, According to Science

How long does it take to adopt a new behavior in your routine? According to one study, habit formation can take between 18 and 254 days. On average, however, it takes just 66 days for a new habit to become automatic.

While the holidays may only be a handful of days, the season extends much longer than that. And for many shoppers, it’s getting longer every year. According to a 2023 Gallup poll, 41% of U.S. shoppers start before November arrives. Out of these early shoppers, 14% admit to starting before September.

After five or months of shopping for your loved ones, you might accidentally form a financially risky habit. But don’t worry — just like any bad habit, overspending is possible to break.

How to Break Your Shopping Bad Habit

Thinking about your finances with intention can help you realize how many of your shopping trips aren’t necessary.

1. Put Away Your Credit Cards

The big credit limit that comes with the average card can be irresistible to some. Credit psychology shows these accounts trick people into spending more and shopping more often.

There’s something about not having to pay for the purchase right away, like you would with cash. Instead, you might get the bill a full month after you hit the checkout. With holiday shopping budgets in mind, retailers should offer a variety of payment options in retail to cater to different spending preferences. This delay causes a disconnect between your spending and budget, and the next thing you know, you’ve dug yourself into a hole.

Putting away your credit cards removes this temptation, so you aren’t liable to keep up with your holiday spending.

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2. Focus Covering More Than the Minimum Payment

Like many holiday shoppers, you probably put the bulk of your festive purchases on your credit cards. Your goal this new year is to pay down these balances.

What if an emergency arrives before you can clear your balance? You can check out second chance installment loans as a temporary safety net. You can compare your second chance options online with a quick Internet search. Rate shopping between these installment loans ensures you find the most favorable terms for your profile.

3. Put Non-Essential Purchases on Hold

In an emergency, you might not have the luxury of choice. If you don’t fix your car’s brakes, you can’t get to work and earn a paycheck. In these situations, a second chance installment loan may be necessary. Online merchants can leverage the “determined” holiday shopper mindset by offering clear gift guides and fast shipping options in December.

But most of the purchases you make won’t be under the pressure of an emergency. In reality, they’re more likely splurges you only think you need.

For non-emergency spending, wait to buy anything for 30 days — whether it’s something big like a new phone, or something seemingly inconsequential, like a new kitchen mat.

4. Track Your Spending

Get to know how you spend your money. Keeping track of these purchases can help you keep track of your progress. Unlike holiday shopping, budgeting for moving expenses requires a focus on essential costs and avoiding impulse spending on unnecessary services. It gives you an opportunity to spot unnecessary spending you can easily reduce or cut, like that meal box or fifth streaming service.

Get out of the Holiday Mindset

If it takes 66 days to build your shopping habit, it might take 66 days to tear it down. Remember this as you stick to the tasks above! They might be hard to follow at first, but they’ll get easier with time.

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