With just days remaining before Christmas, the panic-shopping season is upon us. This is a dangerous time of year when desperate consumers bust the budget on silly gifts like a cheeseburger telephone or wasabi lip balm. Forget re-gifting; such items will be in the trash by New Year’s Day. That won’t stop the bill from coming a couple weeks later.
Three quarters of adults say they have not finished shopping, according to a new survey from Visa. They expect to spend $304, on average, in the final days leading to Christmas. These numbers are in line with previous years, suggesting that procrastination and wasteful spending is an annual rite.
The numbers are fairly consistent across regions, with those in the south and Midwest having the fewest procrastinators (69%) and those in the west (79%) and northeast (78%) having the most last-minute shoppers. Men (72%) and women (74%) procrastinate at about the same rate.
But men plan to spend another $399, on average, while women plan to spend an average of just another $218. Clearly, a lot of men haven’t yet gone to Jared. Last-minute shoppers over 65 plan to spend the most this week: an average of $402. Somewhat alarming is that young adults aged 18-24 plan to spend another $241, a potentially significant amount of money for an indebted college student or recent graduate in a tough labor market.
“When it comes to reaching the Christmas panic shopping cliff, teens are particularly vulnerable because they are the least likely to make a holiday gift budget,” says Jason Alderman, senior director of global financial education at Visa. “Many teens will make the mistake of overspending in order to get a gift, any gift, in time for Christmas. But the people you’re giving gifts to don’t want you to overspend or go in debt, no matter how perfect the present.” A California Institute of Technology study suggests that customers are willing to pay 50% more for impulse items they see in a store as opposed to items they have researched online.
Alderman advises that you spend no more than 1.5% of annual income on total holiday expenses. To avoid wasteful last-minute purchases, consider one of dozens of alternative gifts like homemade cookies or show tickets, or a personal coupon book where friends and family can “redeem” favors like walking the dog or picking up coffee, or a gift that will help others from the World Vision gift catalog.
Here are few more ideas to help you avoid busting your budget while panic shopping
- Buy something useful. Your money won’t be wasted if the gift is needed, like maybe an exercise outfit or set of tools.
- Have a micro budget. Know how much you want to spend on each person on your list, not just an overall limit.
- Pay with cash. This is a time-tested way to keep within your budget.
- Give gift cards. An estimated $2 billion in gift cards went unredeemed this year. So it’s best to stick with cards that can be used anywhere as opposed to at a specific store or restaurant. For the fifth consecutive year, gift cards were named the top gift that people want to receive.
- Give to charity. Get others on your gift list to join you in pooling your money for a charity instead of spending on each other.