Growth & Jobs | Curbing excessive Christmas spending

For many Jamaicans, spending can get out of control during the holidays. And, with business and consumer confidence showing an uptick in the latter part of 2022, persons might have a little more to spend this holiday season than over the past three years.

Despite the optimism and possible extra cash, Ricardo Williams, head of branches at JN Bank, is urging Jamaicans to be mindful of excessive holiday spending.

He noted that while Christmas is the season to be jolly, excessive spending can lead to much regret, heartache and added financial pressures in the new year.

“And with the promotions ramping up, it’s an especially important time to be cautious not to wind up in the red because of holiday shopping deals,” he warned.

“When spending is driven by emotions rather than a plan, it can get out of hand. Left unchecked, impulse buying of gifts can lead to serious financial drain.”

In October, the Jamaica Chamber of Commerce’s (JCC) third-quarter business confidence survey found that just over half of the firms surveyed (53 per cent) intend to give staff bonuses this Christmas season.

The JCC survey also revealed that approximately 40 per cent of those surveyed plan to host Christmas parties, while 29 per cent will be giving gifts/tokens to their customers.

The consumer confidence index made an upward shift to 162.6 points in the third survey, from 156 points. This 4.2 per cent upward movement has resulted in the highest index recorded in over eight quarters, or two years.

Although approximately half the consumers surveyed by the JCC said they had no plans for the season, and about one in every four said they will only host a family dinner, Williams noted that unplanned spending can be a major problem.

“Many persons will say they won’t overspend during the holidays because they don’t have what to spend, but you’d be surprised to see how many still end up in debt come next year,” the JN Bank senior manager said. “The real goal is to have a plan, and to be diligent and disciplined enough to stick to it,” he advised.

Here are a few ways to control holiday spending:

MAKE A BUDGET, SET A LIMIT AND DON’T EXCEED IT

Many people try to create a budget when holiday shopping, but budgets don’t mean anything if you don’t follow them. “Make a list of everyone you want to gift and how much you want to spend,” Williams said. “Approach your holiday shopping just like you would approach a trip to the grocery store. Plan ahead, write a list, and know what you are searching for, so you are less prone to the pitfalls of impulse buying.”

SPEND CASH OR USE A DEBIT CARD

Williams advised persons to use a debit card instead of their credit card, as this allows them to spend exactly what is budgeted, rather than going overboard on credit.

DON’T SPEND YOUR RENT MONEY ON GIFTS

“Also, avoid spending your rent, cash for your utilities or your emergency fund on Christmas gifts. This is a big no-no,” he said. “Life goes on after Christmas. It’s better to forego giving someone a gift for Christmas than to end up without light or water the next month,” he warned.

GIVE THE GIFT OF TIME

Williams pointed out that it’s quite acceptable, especially during a financial crunch, to give your loved ones the gift of time. “Spend quality time with your parents, go home for Christmas, or babysit your nieces and nephews. These are perfectly good presents to give to people who love and appreciate you. I’m sure they will understand.”

AVOID UNNECESSARY PURCHASES

“In order to avoid impulse purchases this holiday season, it’s prudent to take a step back and assess whether it’s an actual ‘need’ or more of a ‘want’,” said Williams. “Try putting an unplanned purchase on hold with the retailer or implementing your own personal ‘cooling off’ period, where you allow a certain amount of time to elapse before making a purchase decision. This will allow the initial adrenaline burst to subside and for you to make a level-headed decision.”

After the waiting period is over, if you are still thinking about the product and the purchase fits your needs and your budget, go ahead and buy it. If you’re no longer interested in the item, pat yourself on the back, because you just saved money.