EduCounting

Episode 141: Get carried away with the spirit not the spending

How much Christmas really costs

SHOW NOTES

Today, I’m looking at the cost of Christmas and the amount of unnecessary spending that happens over the holidays.

 

In this episode I go over how to recognize if there’s a problem with your spending, why this spending isn’t necessary and how we can reduce our holiday spending…

 

A third of Americans go into debt over Christmas, and the holidays are often seen as a stressful time with a financial burden attached to it.

 

This is unnecessary and the opposite of what the holidays should be about.

 

In this episode, I’m looking at the problem the world has with excessive holiday spending, where these bad spending habits come from, and how we can improve them…

 

“Spending on Christmas tends to go up each year and has for over a dozen years.” – Ben Jones

 

“Learn to say no.” – Ben Jones

 

“Good money management is all about good habits.” – Ben Jones


Time Stamps:

00:00 – The difficulties and cost of looking after sick children.

01:57 – How much our holiday budget is and what we spend it on.

02:41 – The average amount people spend during the holidays

03:18 – The problem with statistics.

04:10 – The amount of Europeans that go into debt over Christmas.

04:42 – The amount of Americans that go into debt over Christmas.

05:02 – Where our spending habits come from.

06:19 – How many Americans expect to get a gift they won’t like.

07:07 – How many people return the gifts they receive.

07:40 – How to recognize a problem in your spending.

08:03 – How to improve your spending habits.

09:15 – The problem with debt.

 

Resources:

EduCounting

Investopedia

 

Connect with Ben Jones:

 

TRANSCRIPT

DAD: Last week was tough around the house.  Both Mak & G got sick.  We weren’t so lucky for them to get sick at the same time and be done.  Or maybe that was lucky!! Mak got a cold, and after a handful of days, Grant followed suit.  We then had to take the fun trip to the pharmacy to find those home COVID tests. With the sickness, there was a lot of negativity in the house, including the COVID test results.

I can’t believe the number of tissues a kid can go through in a day. That’s some serious production.  I must have picked up over 30 each day. Pretty nasty, but it had to be done, and as parents (yes kids listen), it’s a pain in the backside to get all your other work done while doling out medicine, tissues, food, trying to force liquids down their throats while calling the school and  juggling homework assignments.

Talk about not budgeting for things.  COVID tests, tissues, medicine, and more. By the way, if you haven’t made your choices for your FSA or HSA, check out our blog on educounting.com.  If you don’t know what those are, check out our blog on edu-counting.com.  I love to save money, and making good decisions with your benefits are important to your financial health!

And for those kids out there, will you please just stop for one second and say “Thank You” for the great parents you have who wipe your nose, deliver your food, medicine, wipe your sweaty forehead, pat your back, and more when you’re sick!

Ok, business put me on the road this week.  A little bit of sunshine in California, but I have to admit it makes you think twice about traveling with Oooo, m, cron. But December always makes me think about our holiday budget.  It’s pretty simple and has been the same amount for the last handful of years. $1,500.  We detail it out by gifts, food, holiday cards, decorations, and other. I saw some numbers on Investopedia about Planned Winter Holiday Spending for 2021.  So, our budget is a bit higher, because we’ve frugal and use it as the opportunity to upgrade the wardrobe.

I’m rounding, but the average for the US, per Investopedia is about $1,000 and it’s broken down into gifts for $650, then, $230 on non-holiday items like food and decorations, and $120 for non-gift items. We spoke about some of the decorations last week, but everyone doesn’t do them, so this average is a bit lower when you spread those who spend over those who don’t.  Since they’ve been tracking it, they’ve noticed spending on Christmas tends to go up each year, and has for over a dozen years.

Before getting into statistics, I always like to pay my respects to Mark Twain said “There are lies, damn lies, and statistics.”  I love that quote because statistics can be twisted to say whatever you want.  I read an article the other day that on-time flights are increasing.  Sounds like good news, until you realize that airlines show a much longer flight time, which may be 20-30% longer. So, it gives them more time to be “On Time”.  I didn’t make this up, the Federal Aviation Administration refers has a name for this airline tactic. They call it schedule buffering.

I generally look for information that points me in the right direction.  So, here’s one for you…. 10% of Europeans go into debt due to Christmas shopping. Zat is incredible!! And, the Brits spend 40% more than the other Europeans due on the holidays.  That left me “Bloody Gobsmacked”, which is shocked and surprised.  I guess the Brits are more like us, Americans buying a bit too much over the holidays. If 10% of Europeans go into debt, what percent of Americans do?

Any guesses? Well, it’s over 20%.  That’s double the Europeans.  You know the Europeans think we’re nuts, and we just keep giving them more ammunition to think that.  What are we doing?

The holidays are supposed to be wonderful, but we have to realize that decisions today affect our future.  Where do these habits come from? One of the identified habits comes from guilt. I was born and raised with Catholic guilt.  We joke that Catholics know guilt better than most because of what we’re taught. I’m still carrying guilt for spilling my coke on my mom’s new couch back when I was 12. Yikes.

But, as parents, we feel like we owe it to our kids to have a wonderful holiday.  Maybe we didn’t make it to all their games or shows or athletic events or some other activity.  I get it.  They need support, but it’s not always easy or even possible to be there all the time.  Yes, COVID’s been hard, and it’s not exactly the childhood we would have chosen, but it’s no reason to be guilted into spending more money. Didn’t you take care of them when sick?

I know that I’ve even been caught buying something because I wanted to relive my childhood in a better light.  Maybe a nice bike because that’s what I would’ve wanted. You’ll shoot your eye out, kid!! What’s that all about?  I know it’s super fun to see a kid light up when they get a gift they’ve been wanting for a long time.  But, don’t we all remember when a cardboard box was way more interesting than the actual gift inside?  Come on, let’s be honest.  It was.  

Here’s a question. How many Americans expect to get a gift they don’t like?  Any ideas?  10%, 20? 30%?  Over 60% expect to get a gift they don’t like, that’s over 150 million people, which is estimated over $15Billion of gifts.  That should make you feel better about cutting down on the amount you spend on a gift, right? 

It’s definitely not worth going into debt for. Or, are we worried about what other people think. If you are, then be prepared to also worry about the debt you just got into for buying gifts that people didn’t want. What’s the right number Mr. Twain?  How many people get a gift and then return it?

I’ve seen a calculation that more people get gifts they don’t want and then DON’T return them.  Isn’t that insane?  So, people keep crappy gifts.  Do you believe that?  Have you ever found a gift you got, still in the box?  I’m man enough to admit it. I have. Is that what you want? Wasted money and going into debt.  Does that sound right?

Ok, here are a couple of things to think about. It does happen to the best of us. You’re not alone, and companies want you to spend more than you have.  So, here are a couple of issues….

  1. Not having a budget.  
  2. Taking out a new credit card for the extra savings
  3. Using your entire bonus on the holidays instead of saving some
  4. Stopping your investing for the holidays to cover your bills
  5. Hosting all the parties
  6. Using a buy now, pay later offer

We’re here to make better money decisions. Having a budget and planning out your spending is helpful.  Learn to say “no”, I practice in the mirror.  I’m told I’m pretty good at it, and honestly, it’s a compliment.

The extra savings on a credit card only last so long.  It can potentially hurt your credit with the extra inquiry or the extra debt you now have access to.  Most times, it’s just not worth it.

How about that bonus.  It probably took a whole year to get it. I allowed myself 20% of the bonus for fun but saved the rest.  Make sure to save some of it, please?

And, remember good money management is about good habits.  Keep putting money away and investing.  It’s not a great time to stop it to cover the extra expenses. It’s time to tighten your budget.

Yes, it’s fun to be the host with the most.  Or is it better to say the host loses the most??  Paying for food, drinks, possible gifts, candles, extra decorations will all hit your pocketbook whether you believe it or not.


And, lastly, the excitement of the season may entice you to buy something now and pay later.  We’re trying to get rid of the extra burden of debt in the future.  It’s generally not a good idea to buy something you can’t afford now so that you can’t afford it in the future.


It’s time for most of us to get past the guilt as we do so much for our kids already.  Gift-giving doesn’t make or break the season, but it can break the bank. Nobody likes to stare down the credit card statement in January and get stressed. I’ve never EVER heard anyone say I wish I would’ve spent more over the holidays.  Have you?

Thanks for being here, and we’ll see you next week for more Money with Mak&G and a little less of me 🙂  BYE!!!

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