3 Mental Hacks to Save your Christmas Budget

3 Mental Hacks to Save your Christmas Budget

You’re in the store. You’re pressed for time. You find the perfect gift for your mother, but it’s over your Christmas budget. You waiver a bit before pulling out your credit card… Stop!

Sure, it’s the season of giving, but not at your own expense. It really doesn’t take much more time to shop with compassion for yourself. It just takes a bit more focus. It’s hard to put the brakes when you?re caught up in the Christmas spirit. But if you just pause for a minute before giving into the card, you can use some mental hacks to save your Christmas budget.?And there are actually published studies that explain why.

Our Economic Brains Have Bugs

Neuroeconomics is a an area of neuroscience that investigates the brain mechanisms involved in economic decision-making. It tries to understand consumer behavior, especially behavior that a consumer continues even when they know damn well it will hurt later. And that is exactly the point – it hurts later. To put it simply, because the pain of spending cash on purchases hurts more in the moment than the pain of using a credit card, it?s so much easier for us to spend with a card than with cash. This can result in not only spending beyond our budget, but also spending money we don?t actually have.?

Credit cards effectively anesthetize the pain of paying. George Loewenstein, Carnegie Mellon professor of social and decision sciences (SDS)

In addition, spending with a card does not seem as ?real? as spending cash. Neuroeconomics explains that we are wired from ancient times to avoid risk and seek reward in the moment. It’s a survival mechanism. While somewhere in our analytical brain we know that spending with a card is risk, our emotional brain, which seeks the reward now, drowns it out. Thus, our emotional brain both abstracts the credit card from the actual cash it represents and is not affected by the pain of the sale in the moment. In short, we just don’t feel the true economical impact when we use credit cards.?

…the fact that we don?t feel the physical properties of money contributes to changes in our economic behavior ? e.g. we spend more in credit cards than in bills. – Sacha Bourgeois-Gironde Professor of economics and cognitive science; University Paris 2 – Lemma, Institut Jean-Nicod

Christmas is an emotional time. We are swept up in the romanticism of the holiday. It is the most vulnerable situation we can be in economically when weighing emotions against logic around spending. This isn?t to say that emotions are bad. Neuroeconomics doesn?t tell us to totally squash emotions, merely to put a rein on them. But this can be particularly difficult amidst the celebratory spirit of the holidays.?And guess what? You aren’t weak if you struggle with this. Studies even show that people who are normally ?tightwads? with a high sensitivity to the pain of overspending will overspend when forced to use a card. So it?s really not you, it?s your brain with a card.?

Christmas is an emotional time. We are swept up in the romanticism of the holiday. It is the most vulnerable situation we can be in economically when weighing emotions against logic around spending.

You have to get ahead of your brain if you want to win. Once you are in a store with Christmas all around you and carols being pumped through the speakers, you will struggle negotiating with the emotional brain when you have a card in your pocket. But now you know that we have this malware in our heads, so you can trick your own brain for the win! Here are 3 mental hacks you can use to get in front of your head and save your Christmas budget.?

Related:? Give the Planet a Break this Christmas:? How to Wrap Sustainably

1)? Feel the Pain of Overspending Now

Imagine opening your credit card statement in January. See that high balance from overspending. Feel the regret of overspending now vs later and really let it hurt. Think about your future financial goals and how this fat bill will change things for you. Feel now what you know you would feel later. Make it real by creating a connection between your present mind and your future mind. Then, replay this scene whenever you?re thinking about your Christmas shopping. Replay it on your way to the store. Replay it in the store while your shopping. Know that it’s real. ‘Cause, come January, you will be opening that bill, one way or another. So, pay it forward, to yourself.

2) Play the Cash Game

If you don?t trust yourself with mental imagery, another way to protect yourself is to simply leave your card at home. Set your spending limit and withdraw that amount of cash. Just use the cash. If you run out of cash, you run out of Christmas shopping potential, period. This alone will force you to spend more conservatively on each gift. (I know, I know, you’ve heard this a million times, right? Well, if you feel an immediate aversion to this idea, see the next hack.)

3) How to Win When You Don?t Get Paid ‘Till January

But what if you don?t have the cash now, but you will have it later, and you have to use the card to get your shopping done before Christmas? Easy. Use your credit card to buy a prepaid Visa or Mastercard gift card. Set your limit and charge only that amount to your card. Then leave your regular credit card at home and use the gift card for Christmas shopping. This will force you to budget your purchases. This hack is also helpful for Christmas shopping online where it is even easier to abstract clicks from actual cash.?

Related:? What’s the Best Gift for Yourself this Christmas?

Practice Self-Compassion this Holiday

Look, it may sound silly to you now that you might have to play games with your mind around Christmas spending, but it?s actually a serious problem in our country. And it seems to me that if I’ve held your attention this far, you know what I’m talking about. The tsunami of holiday fever makes controlled spending a lot harder for everyone. Remember that you are up against a plethora of highly specialized advertising and subliminal messages coming at you from all media platforms telling you that you need to outdo yourself every year in order to show your love. These messages are bullshit!?Don’t fall victim to them. Fight back.

You already know that an increase in the price of your gift will not directly increase how much your family and friends love you. In fact, it is exactly because they love you that they would not want you to do anything to put yourself in financial jeopardy. Proving your love by hurting yourself is not what this season is all about. A lot of us get this twisted. The truth is, protecting yourself against overspending is not selfish, it is an act of self-compassion. And you are just as important as anyone on your Christmas list.

?You, yourself, as much as anybody in the entire universe, deserve your love and affection.? ?Buddha

Related:? Put Your Credit Card Down!

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