3 Expensive Mistakes Holiday Shoppers Are Making
Sure, it’s the most wonderful time of the year, but it can also be one of the more stressful times of year. Between figuring out what to buy for everyone, shopping, wrapping gifts, and scheduling visits with friends and family, we have a lot going on during the holidays. Plus, these tasks are all in addition to our daily responsibilities, like working, caring for our homes and families, and running regular errands.
It may be because they’re just trying to get it over with, or perhaps it’s because they’re misinformed, but a lot of people make expensive mistakes while holiday shopping. And later on, they regret these decisions. We’ve created a list of some of these shopping errors. Are you guilty of any of these?
Focusing too much on deals and discounts
Would you buy a name-brand blender because it was 90% off, even though you already have a blender and no one on your shopping list for asked for a blender (or anything similar for that matter)?
Our brains are conditioned to see an item with a high percent off discount as a value. Data published in Entrepreneur found that 68% of us would drive out of our way to save $5 off of a $15 item, but only 29% would drive out of our way to save $5 off of a $125 item. This is in spite of the fact that we would be saving $5, regardless to which item we chose to buy. But, because a larger percentage discount feels like a better deal, many of us will jump for what we perceive is a larger savings.
Holiday shopping based wholly on what’s on sale is a mistake so many consumers make. If you don’t look beyond the discounts, you may end up purchasing an item of lower quality, an item that’s not truly a good value, or something your recipient doesn’t really want.
Opening a ton of store credit cards
Every time you walk up to a retail checkout counter (especially during the holiday season), you hear some version of the question: “Would you like to open a store credit card today and save 25% on your purchase?”
And, as you glance over your items and add up the total in your head, you may start imagining the savings you could receive if you decide to open the card. “I’ll never use it anyway,” you think to yourself as you reluctantly answer, “OK, why not?” to the store clerk’s question.
Although there are some benefits to these cards, store credit cards have notoriously high interest rates attached to them. You often have a low limit too, and when they sit in your wallet, they may entice you into spending more money. During the holidays, credit card balances already typically rise by around 25%, so the holidays are not exactly the best time to take on a new card.
Perhaps in these cases, it’s best to hold off for a while, and if you’re still interested in a certain store credit card after you’ve had time to think about it, you can always apply later.
Having a complete lack of organization
Before you begin holiday shopping, do you make a list and check it twice? Or are you more of a “wing it” type?
Those who create a list of who they’re buying for and indicate a maximum amount of money they want to spend on each person (and in total) may have a much easier time staying on track — both financially and practically — than those who just buy now, organize later. And with average consumer spending on gifts alone being around $780, typical middle earners spend around 20% of their monthly income on gifts.
A Kiplinger publication reminds us of all of our other random holiday expenses, like “restaurant meals you’ll eat while out shopping, ingredients for holiday goodies that you’ll make for friends and family, postage for holiday cards, [and] cab rides home for late-night parties,” for instance. These types of expenses should be included in your holiday budget as well.