The shopping mania during Black Friday and Cyber Monday is the first step for many people to begin the annual routine of excessive spending during the Christmas season. An average Black Friday consumer is expected to spend PS203 during the holiday in 2018, more than double the previous amount.
Christmas is costly; in 2015, an average UK household splurged PS800 for Christmas, with 75% of this going towards presents. Likely figures, or more, are anticipated this year despite consumers worried about the overall UK economy.
The average UK adult carries PS3,737 in consumer credit debt, and 44 percent of UK adults have savings lower than PS100. Based on these numbers, an increase in high-cost credit borrowing from UK consumers is anticipated as families stretch their financial capacity to pay for the Christmas festivities.
Overspending is a major concern.
Last year, about a quarter of Britons felt pressured to spend more during Christmas. The pressure from children was the most significant factor that was followed closely by Black Friday and similar promotions, which caused people to feel that they’d otherwise miss the opportunity to save money.
Parents often cherish their own Christmas memories, which they strive to recreate (or more effectively) for their children. Parents also are under pressure to surpass their previous Christmas preparations, which leads to an unattainable cycle of present as well as more food, alcohol, and fun, All of which result in more expenditure. When you add in the images of Christmas from mandatory Christmas TV ads, the pressure quickly increases.
The most discerning consumers will observe an increase in the number of money advertisements for loans; they are a great way to offer “easy” money, not to mention the high charges for repayment. This may encourage the taking of expensive credit to cover the extravagant Christmas presents.
For the course of my Ph.D. research, I’ve studied the experience of consumers of high-cost credit. I’ve observed that parents especially have a hard time during the Christmas season of the year. They typically take on larger quantities of praise. However, they don’t pay much attention to conditions of repayment, specifically APR rates. The results show that almost all those who stretched their finances regret their decision, later on to use credit with high costs. Nearly half of the parents I spoke to pay off the Christmas debts through September or August. Many parents said they could have saved money on “meaningless gifts” that children eventually discarded and spent more time with the children on a more personal level.
The most important thing to consider is the convenience of shopping online. In just a few clicks, without checking your account balance, you can shop as much as you want. Retailers are aware of this. In the past, 60 percent of Black Friday sales were conducted on the internet. To capitalize on this data, Amazon has announced a “helpful” sales extension that will prolong Black Friday sales for an entire 12 days. However, who do these sales really benefit – the parents hoping to save money or retailers hoping to make a profit by extending the Christmas season?
Retailers are companies. They are looking to capitalize on the desire to make a great Christmas season by inviting you to their stores and online sites with appealing deals. So the pressure to shop has never been higher. Black Friday could be the beginning of the season of shopping for Christmas. However, you must be honest: are the excesses of Christmas really worth months of living a frugal lifestyle in 2017?
Six ways that you can improve your budgeting.
1. Create a budget: Identify the amount you are able to or are willing to spend and then stick to the budget. If you need to take out a loan, allow yourself the time to search for the most effective repayment options.
2. Make a list of the food, gifts, decorations, and else you want to buy for the holiday season. Look for the most affordable price.
3. Do not buy impulse items. If you’ve not thought of buying it, are you really in need of it? It’s still necessary to cover the cost even if it seems like cheap. If you are struggling with this, try sleeping on it before you buy. This allows you to consider it and find the most affordable price.
4. Beware of scams and marketing tactics. Beware of retailers’ techniques. For instance, buying online over certain amounts usually comes with free delivery. Don’t be enticed to purchase more to get free delivery. Retailers’ goal is to convince you to buy their products. Your task is to protect your cash.
5. Spend your money wisely. Meaningless gifts are among the most significant causes of debt accumulation. In the past, the most unpopular facilities comprised selfie sticks as well as DVDs for exercise. The best way to approach this is to ask your friends what they’d like. Children can create a list of their wishes for Santa. Keep in mind that children are not always interested in expensive items. They’re often more enthralled by the packaging or bright wrapping paper.
6. Enjoy yourself, but think in the longer term. It’s a holiday. Take your time, and have fun in the company of your loved ones. However, this celebration should not have a negative impact on your finances for months to come.