Strategies to save money this holiday may backfire

Holiday marketers have your number, and they know how to entice you to spend.

You try to rein it in. But two favorite strategies can lead to spending more, according to a 2018 survey by the Center for the New Middle Class, a research organization funded by Elevate, which lends to credit-challenged borrowers. Consumers who shopped at sales were 50 percent more likely to say they spent more than they expected. Among shoppers who used coupons, 38.5 percent said they overspent.

Many shoppers try to be careful instead of making a spending plan. Using a budget can feel like it’s wringing the joy out of a happy season. Why? Giving feels good, says Jeff Kreisler, co-author of “Dollars and Sense: How We Misthink Money and How to Spend Smarter.”

But simply being careful doesn’t work, “because a lot of the reasons we make poor financial decisions are unconscious,” says Kreisler, who’s editor in chief of PeopleScience.com, which applies behavioral science to the marketplace.

However, you can position yourself to recognize — and overcome — overspending triggers.

• BEST DEFENSE: A BUDGET

Ashley Feinstein Gerstley, a financial coach and founder of the Fiscal Femme website, advises setting aside time — not over an hour — to list holiday expenses. Build in a buffer, because you’ll forget some things. But you’ll be better off if you have a number in mind, she says.

Be realistic, not rigid, about your budget. Otherwise, controlling expenses can seem so futile you don’t bother trying, she says. “It’s like being on a strict diet and figuring if you cheated and had a cookie, you may as well eat the whole bag.”

Having a successful holiday spending plan may also inspire you to create a budget to help you achieve financial goals throughout the year.

• UNDERSTAND HOW SALES CAN COST YOU

Shopping sales can be smart — but only if you’re strategic and aware of the psychology at play. Kreisler says if you see a $100 sweater marked down to $40, your brain registers “saving $60.” Train yourself to translate that to “spending $40” and compare how it fits into your spending plan.

Then, figure out how much the item is worth to you. Would you still want it if $40 was the regular price?

Watch out for impulse purchases, too. Gerstley says she’s encountered products she never knew existed while shopping and suddenly wanted them. She’s a fan of “the 48-hour rule”: Put the item back on the shelf or abandon your virtual cart, and if you still want it 48 hours later, go ahead and buy it.

Understand that marketers use one-day sales or even shorter buying windows to create urgency. Fear of missing out can lead to poor decisions; buy only the items you intended to anyway.

• KNOW THE TROUBLE WITH COUPONS

Coupons can save you money — or tempt you to upgrade because of your “savings.”

Kreisler says a coupon is great if you’ve been waiting for a discount to buy something specific on your list. If you’ve done your research and buy the item you intended to, using a coupon to drop the price, then you really are saving.