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It’s the holiday spending season. – Peter Mulraney – Medium

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Everywhere you look this time of year, someone is encouraging you to spend your money on their latest deal and save yourself heaps.

Photo by Artem Bali on Unsplash

They’re tempting you with the illusion that you’re getting a good deal. That’s sales psychology for you.

If an item that normally retails for $399 is marked down to $199, you’ll supposedly save $200 if you make that purchase.

If you buy the item, it will cost you $199. You won’t actually save any money. The savings are fictitious — they are based on a mental comparison between your actual purchase and a hypothetical one you didn’t make.

They’re tempting you with the illusion that you’re getting a good deal. That’s sales psychology for you.

If you’re in the market for that item and you have the cash, fair enough. Buy it.

But if you don’t have the money, don’t be a sucker and buy it on credit — no matter how many dollars they claim you will save.

Your credit card is not your friend during the holiday spending season.

Your credit card is not your friend during the holiday spending season. It will only get you deeper into debt, and credit card debt, like all debt, has to be repaid. Better not to go there.

Holiday spending on presents for family and friends, and for yourself, is discretionary spending. It’s money you don’t have to spend to meet the necessities of life, no matter how much pressure advertisers and your kids put on you. Guilt is not a good reason for going into debt.

Despite what you’ll be told, not everyone buys expensive presents for their kids. Sure, we’d all like to but if that’s your aim, do yourself a favor and start a savings plan to fund next year’s presents and restrict this year’s buys to items you have the cash to pay for.

Guilt is not a good reason for going into debt.

I grew up in a low income family. My numerous siblings and I each got one Christmas present. Some years we all got the same present. It cut down on the squabbling. The year we got a bike, there were no other presents. We took it in turns falling off in the driveway as we mastered the art of riding it.

There were no credit cards back in those days. My folks did the best they could with the money they had. Their priority was providing the necessities, not the frills.

A child with a new toy is a child with a new toy whether it cost two dollars or two hundred dollars. Your teenagers might not be happy with what you can afford right now but they’re old enough to understand the realities of life if you take the time to explain things to them.

If you need some help sorting out your money situation so you can buy some more expensive presents next year, read my article on a strategy for solving your money problems and start managing your money with purpose.

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