This story was featured in the November/December 2023 issue of ESSENCE, available on newsstands now.
Known as the most wonderful time of the year, Christmas can also be the most expensive. Figuring out what to buy and how much to spend is stressful enough—but this period can provoke additional anxiety in some, with targeted ads triggering compulsive shopping as an emotional response.
A 2006 study published in the National Library of Medicine found that compulsive spending affected approximately 1.8 percent to 16 percent of adults in the U.S. at the time, with women accounting for a higher percentage because they were more likely to seek treatment. Impulsive buys are purchases used to manage and deal with how you’re feeling. If you’re obsessing over what people think of your appearance, for example, the pressure of going to a holiday get-together may make you buy a new outfit.
If you suffer from depression, are bipolar or sometimes spend time in a depressive state, anything that makes you feel sad can provoke compulsive spending. “You can also be triggered by social interactions,” says LaTasha Seliby Perkins, M.D., at MedStar Georgetown University Hospital. “The anxiety may have to do with family, and that happens more around the holidays, when you’re interacting with people you don’t usually see.” These encounters can bring sorrow and stress during a time that’s supposed to be joyous. To compensate for these feelings, some of us may make a compulsive purchase in order to self-soothe. Or maybe you just want to see loved ones happy, causing you to splurge on gifts and experiences that you can’t afford.
“Be aware of emotional triggers, FOMO and gift-giving culture,” cautions Jack Howard, head of money wellness at Ally Bank. “Explore why you might be overspending and using money for bills to buy gifts. Delve into where you learned this behavior and the root issue behind the spending.” Howard explains that how childhood caregivers approached Christmas may impact how you spend during the holiday today. If your family did not have disposable income to provide many gifts, you may overspend as an adult to compensate. Whatever your triggers, our financial and wellness experts offer tips and strategies to help you more effectively manage compulsive spending behaviors this holiday season.
TAKE A MOMENT TO REFLECT. Before checking out, ask yourself, “Why am I spending money on this specific purchase right now?” Once you are clear on your why, it’s easier to either justify your choice or stop yourself from splurging.
SET A HOLIDAY BUDGET. Giving yourself a budget doesn’t have to ruin your holiday spirit. The goal is to get a clear picture of how much money you have coming in and how much you can afford to spend.
CREATE A CONSCIOUS SPENDING PLAN. Spend generously on things you want, and cut costs on things you can do without. This complements your budget, helping you to prioritize purchases and avoid guilt.
UNDERSTAND YOUR SPENDING, AND ADJUST. Eating out multiple times per week? You may need to adjust your spending to allow yourself to manage your current expenses and take stock of new ones that may be causing you to go over budget.
GO UNDERCOVER. Ever notice how if you mention getting new shoes out loud, you’re suddenly bombarded by specific shoe ads on social media? “Behavioral targeting is intended to nudge you toward purchasing,” explains Mathilda Lambert, vice president, community and business development at JP Morgan Chase. “To help avoid these ads, disable cookie settings to surf the Web anonymously.”
CUT THE CREDIT. Refrain from using credit cards if you don’t have the cash to pay them off at the end of the month. Keep one for emergency use, and remove the rest from your wallet to avoid swiping.
CHECK YOUR BALANCES. Monitor your bank accounts often for a reality check on how your spending may be impacting you. One strategy is to set account notifications that will inform you of when your balance has dropped below a specific threshold.
SET LIMITS. “Try carrying cash or a reloadable gift card for non-required expenses or ‘wants,’ based on your budget,” suggests Lambert. Once it’s empty, wait until the next pay period to reload. Decline offers to go window shopping and instead try activities, like having a friend over for dinner so there’s no temptation to overspend.