Holiday Season
It is that time of the year again, where we spend money for the sake of spending money. Yes, it is that period between halloween and the new year, the holiday season with the requisite holiday sales.
Some may disagree with the time span, and argue that the holiday season begins after Thanksgiving. For those individuals, Christmas carols and decorations are on display before Thanksgiving. But the time span is not the point.
Holiday Spending
During the 2018 holiday season, Americans spent over $717 billion. Americans spent over $3.5 billion online on Thanksgiving day. On Black Friday, over $6 billion online. On Cyber Monday, over $8 billion and over $18 billon on Small Business Saturday. In total, in 2018, over 174 million individuals shopped over the Thanksgiving weekend from Thanksgiving through Cyber Monday. Many of these individuals were motivated by holiday sales. However, do you really need that new phone, TV, computer or gadget? In the time of covid-19 and related variants, should you be so focus on material things?
Sales?
If you are motivated to spend based on the holiday sales, those big signs with percentages off, I have some sober news. Retailers have figured out that those big signs can lead to sales. Lots of sales. As such, instead of actually lowering the sales prices, many may instead increase the listed price. Therefore, there is a larger gap between the sale price and the list price.
That big sale may not be as big as you think.
Holiday Spending And Your Financial Future
Now that your euphoria of large savings have been normalized, have you considered how spending in the holiday season will impact your financial bottom line. Of the 174 million Americans who spent over $717 billion during the 2018 holiday season, how many are financially independent? How many are on track to retire early or living pay check to pay check? How many could have contributed to their savings, 401K, IRA or personal investment account? What about paying down debts from the previous year’s holiday spending?
Extravagant spending during the holiday season occurs yearly. Let us assume that the retirement age is about 65, and conservatively, careers begin after college at age 22. Based on this estimate, about 43 years of spending occurs during your working years. How could saving during the holiday season have impacted the average American’s bank accounts? How many could have retired early or at least struggle less financial?
Stay On Your Journey To Financial Independence
While the holiday season is branded as the season for spending, take stock of your financial situation and how your holiday spending will impact your journey to financial independence.
Conclusion
Your family is important and we are certain that they would rather you be in a better financial situation than purchasing gifts that will put your financial future in jeopardy. If you are planning on making small or large purchases this holiday season, keep in mind your financial goals. Stay on your journey to financial independence.
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