Money Management

7 Biggest Ways People Waste Money During the Holidays

December 5, 2022

December 18, 2023

Happy holidays everyone! It is December now so Christmas is coming soon! People have already been paid for November or they are going to be compensated soon. This is a period when everyone spends money. Be it by treating yourself or your kids to something special, buying gifts, traveling upcountry, partying, Christmas decorations, or even that activity you forewent last holiday because of COVID-19 or whatever your Christmas plans are.

However, it is important to keep in mind that right after December there comes January which we commonly refer to as njaanuary or the dreaded 90-day-month where the consequences of December spending start to kick in: tight finances, increased stress, and regret over money wasted during the holidays.

So why do we find ourselves broke every January? Did we spend too much money over the holiday season? Or is economic hardship an inevitable stage in January?

Here is a look at seven common ways people waste money during holidays- and tips on how to cut those costs.

1. Beware of Retail Tricks

Imagine your typical holiday shopping. You walk into a mall and you see Christmas trees decorated in green and red. You are greeted by happy holiday music that warms your heart. The mall is full, people look happy as they drag their shopping baskets. Your eyes lay on an item on a 2-for-1 offer. On the other side, there is a sign reading 70% off. And suddenly even you can't help you just have to buy the item.

Oops! You have been tricked into Christmas sales tactics.

With so much money at stake during the holidays, it comes as no surprise that companies go to extreme lengths by using retail tricks such as the ones mentioned above to convince us to spend more money and buy things that we may never use.

Sure, buying one-get-one-50%-off may sound like a good deal at first glance - but if you think logically you may realise you only need one item after all.

Retail tricks are so simple but effective. It is easy to think that you can’t easily fall for them, but the truth is if they were not working then they would not be used. The psychology of retail tricks affects everything we buy from groceries to clothes to toys.

But being aware of these tricks and how they work can help you beat them and be a smart shopper.

Here are more common retail tricks to look out for when Christmas shopping this December, both in person and online:

The number 9: If you have found yourself reaching for a pair of shoes or jeans with a price ending with 9 then you are not alone. The number 9 is a popular sales strategy used by retailers to make products appear cheaper than they really are. And as consumers, we have culturally been conditioned to think that prices ending with 9 are better deals or have a good discount.
Buy now, pay later
Bold "SALE" sign in the window
Inviting atmosphere i.e relaxing music and warm scents
The limited-time offer card
Pricier items placed at eye level
Free promotions

2. Waiting Until the Last Minute

You may start the festive season with the best of intentions, determined to get all your shopping done before Christmas and New Year's Eve. You might even have made a list of the items you need and where to get them. But then suddenly it is a few days to the 25th and you have done nothing, so you rush desperately to the nearest supermarket or your local store.

This can be a horrible mistake. When you wait until the last minute to make your holiday purchases, you risk prices creeping up, even the price of a goat could rise from Ksh10,000 to Ksh20,000 in one day during the Christmas season. You also risk not getting the best deals, and as a result, you overspend.

3. Granting Your Kids' Every Wish

Must you buy every item on your kids' Christmas wish list? And what is a parent on a budget supposed to do?

You might not see spoiling your kids during the holiday as a waste of money - especially if your heart warms out every time you see their eyes lighting up with excitement as they open a gift.

Kids want many things, but sometimes they just use these items for one day, and then they get bored with them. This means your gift will probably end up under the bed, in the store, or at the back of the closet.

To avoid overspending on kids during the holidays, it is imperative to establish limits up front. Decide how much you are comfortable spending and tell your children point-blank which items are on the list and which ones are not, and have them rank, say their top three items among what is left.

It is a good lesson in helping your kids set priorities. Besides, your money will be better spent on a few items you know your children will truly use.

4. Treating Yourself

It is almost a tradition in Kenya to treat ourselves at the end of the year. With the elections, the economic struggles, not to mention surviving the crime surge most of us could not wait for December to self-gift and treat ourselves for getting through the knocks of 2022.

I mean come to think of it, you have worked incredibly hard, given up weekends, early mornings, and late nights to work on your career, business, and family…..should you not treat yourself to something you will love - a Christmas gift from you, to you?

Well, while it is important to appreciate ourselves, we ought to remember that just because a year has ended it does not guarantee that things will be better in the next one, especially at the beginning of the Year.

Thus you should limit the budget you allocate to self-gift yourself during the festive season. You have other seasons and times of the year to gift yourself like birthdays, it does not have to be this December or on New Year’s Eve.

5. Falling For Financial Blackmail

It can be difficult to know where to draw the line especially when you visit upcountry and people including relatives and friends blackmail you to buy “sikukuu”.

If you stuff a few hundreds into their pockets every time they blackmail you or say yes to every time someone asks you to buy them a beer or soda, your generosity could easily make you broke in January.

Make a plan for your seasonal giving. Identify specific people in the upcountry before you travel you want to appreciate during the holidays, and allocate funds that you are financially comfortable giving.

Leave room in your budget for some discretionary situations, and be prepared to confidently and politely decline some requests ‘blackmails' after you have exceeded your giving limit.

6. Unnecessary Travel and Overcommitting to Holiday Get-togethers

Your travel and social calendar may have been open within the year, but now that it is the festive season it seems like you have to travel upcountry during Christmas and take your family on a vacation during New Year Season, you have after-work cocktail party, a relative to visit, a wedding to attend, family gets together or some other festive get-together all in one month.

For most of these events, especially traveling, you end up spending so much money because it is peak season. When it comes to get-togethers you end up contributing money for the food, buying drinks, gifts, and probably a nice outfit for the occasion.

To save some money (and free up your holiday calendar), commit to only those events you are excited to attend without breaking your budget. You do not have to attend all get-togethers that you are invited to if you would rather do something else with your time.

7. Convenience Costs

One of the hidden costs of the festive season is convenience expenses. Just as the name festive suggests this period comes with extra activities and responsibilities with celebrations, parties, and special occasions.

As a result, the price we are willing to pay for convenience starts to rise - sometimes, it is just simpler to take a ride home after an office end-of-year party. It is even easier to order pizza for kids to create more time to prepare yourself for the party.

Additionally, all of the time spent Christmas shopping often results in other unnecessary purchases: eating in restaurants, getting snacks, coffee, or expensive drinks, and getting a ride to and back home just to name a few. These expenses are minor. However, over the month, they add up quite fast and the total convenience cost becomes significant and inconvenient when you realize you are broke in January.

Wrapping Up

Saving money is important during any period. Take the initiative of saving money during the festive season. It is good for January and your future.

One of the ways to save money is by setting a budget for the holiday and sticking to it. A budget will help you track your spending and make it easier for you to know where the money for spending will come from. Budget for your gifts, travel, kids, drinks, clothes- basically everything you intend to spend on during the holiday.

Additionally, shop around before you buy. Just because one shop has Christmas deals does not mean that is the best price in the market. Thus it is important to compare prices before you make your purchase for the best deal.

Also if you are traveling upcountry in public means book your ticket early before the prices hike. You can also shop around for cheaper tickets.

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Karuana Mwai is an award-winning freelance journalist based in Nairobi Kenya with a passion for telling business, health, and social justice stories. Find here on LinkedIn.