It’s 12 days to Christmas! People are stressed and time-poor as they try to fit extra social engagements and shopping trips into their everyday work and family lives. Under these conditions, our ability to make smart financial decisions can be tested.

An incredible 80% of decisions are made in the subconscious.

When you’re Christmas shopping, it’s easy to be blinded by the glitz and glamour of stores and shopping centres. And the ease and speed of online shopping can be just as dangerous. Discounts, sales and special offers can make bad choices look good. Advertising and marketing draw you in to make you spend money, without really thinking it through.

So, how do you combat this relentless assault on your psyche, and your finances?

Being aware of your spending habits and patterns of behaviour will go a long way to reducing unconscious, potentially harmful financial decisions. Train your mind to manage the stress of the festive season and create the opportunity for positive, healthy financial choices.

Be aware

Understand where your feelings come from when you’re shopping. Recognise that it is fun to buy. Spending money, especially on gifts, provides an emotional ‘high’ which makes everyone feel good… until that high wears off and the guilt and worry sets in. If you are aware of this pattern, you’re in a great position to monitor and manage your purchasing decisions.

Disassociate

Remove the emotion from spending. Look at it clinically and clearly. Do you, or the recipient, need this item? Can you get it cheaper elsewhere? Is there a better option? And, does it fit within your spending budget? Once you have separated your emotions from the decision-making, it is more likely that you will make a sensible financial choice.

Plan and Budget

Set yourself Christmas budgets. Much like the concept of ‘savings buckets’, create individual plans for how much you will spend on:

o Gifts: include everyone - family, friends, teachers, charities etc

o Entertainment: prepare for the cost of food and drink at the extra events and get-togethers that happen this time of year

o Christmas / Boxing Day: whether you are hosting lunch, or taking a plate to Nanna’s, you will no doubt spend more on food and drink during the festive period

Once you have created your budget, stick to it! Do the research, know how much you want to spend and stay within your guidelines. It goes a long way to reducing the post-Christmas guilt and January credit card stress.

Manage Christmas credit card debt

This is a big one. It is so common for people to buy on credit, then receive frightening, unaffordable bills in January. The only way to really combat this is to make your credit cards part of your budget. Plan ahead for both spending and repayments so you know you can afford to pay the purchases off without incurring huge interest charges.

Stay focussed

Write lists! They help to resist temptation and reduce impulse purchases.

o Make supermarket shopping lists rather than aimlessly wandering and filling your trolley

o Specific gift lists will help you manage your spending. Ticking them off will show you how much you’ve achieved when you’re feeling overwhelmed and exhausted.

o Keep all your receipts to track your spending and be prepared for any returns or exchanges. The reduced prices of Boxing Day sales often means you won’t get your money back on any items that were full-priced before the sale, unless you can show your receipt.

Train your mind

Work with your subconscious.

o Be aware: of your mental, emotional and physical state. If you are feeling stressed or overwhelmed, take six big breaths. Breathe slowly in and out repeating ‘I breathe in calmness, I breathe out stress.’ This will settle your mind and reset your thinking about the decision you are making.

o Create intent: decide how you want to think, feel and act before you hit the shops or the supermarket. Make your budgets and plans. Know how you want to feel – calm, in control, happy, relaxed – and recognise when those feelings are slipping away. Stop for a cup of tea. Walk away from your iPad. Return to the purchasing decision when you are feeling better.

o Take action: the more you practise, the better you will manage the overwhelm of Christmas and stay in a positive, healthy mindset.

Imagine a new year free from financial worry. Taking these steps to understand and work on your unique thoughts, feelings and actions will help you make better decisions and improve your overall financial wellbeing.