The Psychology of Why People Spend More in December
It’s the most wonderful time of the year…to overspend. Just like clockwork, every December people seem to justify spending more money than any other month of the year. But why? Is it the holiday cheer or peer pressure? Let’s take a look at the psychology behind why people spend more in December.
The holidays are a time where people are bombarded with marketing messages telling them to “buy, buy, buy!” A study by Forbes shows that people spend an average of R13 000 on Christmas Gifts alone. And that number seems to be increasing every year. So, what causes this spending spree? There are a few culprits:
1. The ‘Fear Of Missing Out’
The FOMO phenomenon is real and it’s affecting your wallet during the holidays. With social media, we are constantly bombarded with photos and posts of our friends and family enjoying the holiday season. This creates a feeling of anxiety that we are missing out on all the fun. To combat this, we overspend on experiences and gifts in an attempt to create our own perfect holiday memories.
2. Retail Therapy
We’ve all been there. You have a bad day at work or you’re feeling down about yourself. So, what do you do? You go on a shopping spree. It feels good in the moment, but afterwards you’re left with a bill and a bunch of stuff you don’t need. For some people, the high from buying things is enough to temporarily make them forget their problems. And retailers know this which is why they flood us with ads during the holidays playing on our emotions.
3. Pressure From Family and Friends
During the holidays, we feel pressure to keep up with our friends and family financially. We compare ourselves to others and think that we need to spend as much money as them on presents or risk looking cheap. This sense of competition can cause us to overspend just to one-up those around us.
Knowing the psychology behind why we overspend during the holidays can help us make better decisions with our money. Just remember that FOMO, retail therapy, and peer pressure are all affecting your wallet this holiday season! Try to be aware of these triggers so you can resist temptation and stick to your budget. Wishing you all a happy (and frugal) holiday season!