Take, for example, an experiment run by The New York Times. Last year, the company acknowledged that it uses machine learning to predict what people are feeling while reading their articles online. That data can be translated into a list of 30 frequently felt emotions, 18 of which are for sale to advertisers. The Times is the not the only media outlet, by any means, that does this.
The point? Companies can show us online ads based entirely on how we're feeling in the moment. To stop them from preying on your emotions, make a rule for yourself: If a product is suggested to you by an ad on the internet, don't buy it.
Pro tip: Imagine your emotions as people. According to research from Hong Kong Baptist University School of Business, this can help you be less swayed by your feelings when making purchases. If you typically find yourself binge shopping when you're sad, for instance, try to detach that emotion by turning it into a character.
Set a holiday budget - and stick to it
Create a holiday spending plan before shopping for gifts. Plan to spend whatever makes sense for you — that is, what you can realistically afford without dipping into your savings or rent money, or creating credit card debt. A smarter option may be to dip into your travel funds. If you're like me and normally set aside money to go on vacation around this time, you could redistribute a portion of those dollars for gifts, or even for planning a fun virtual event with your loved ones.
Pro tip: Do your best to avoid getting caught up in consumerism by setting a holiday spending plan and using online shopping tools that can save you money, like Honey or Rakuten. To stick to your budget, just imagine the difference between starting 2021 debt-free versus being under a pile of debt.
Start a new tradition
For those of you lucky enough to see your family in person this holiday season, you can save money by doing a white elephant gift exchange: Instead of buying a gift for every person, everyone brings one gift to contribute to a common pile. As a group, make an effort to buy presents from local businesses or the communities that have been most affected by the pandemic. In this way, you'll be giving to multiple people at once.
To start the exchange, each person draws a number to decide the order in which everyone picks gifts. The first person selects a gift and opens it, and the following participants can either pick a new gift from the pile or steal a gift from a previous player. If someone steals a gift you've opened, you have two options: Choose a new gift or steal from someone else. Each family has its own rules for how many times an item can be stolen — it depends on your tolerance for chaos.
Pro tip: If you're afraid a white elephant gift exchange will bring out the less charitable side of your family members, consider skipping gifts altogether and doing a different fun activity, like cooking a special meal or playing charades. Get a sense of how your friends and family members feel about gifts this year beforehand by letting them know that your financial situation may affect what you can give. Your loved ones might even be in a similar situation and feel relieved.
If you're going to splurge, focus on experiences
It's easy to get caught up in negativity when we think about all the things we can't do because of the pandemic. Spread a little more joy this year by focusing your holiday spending plan on experiential gifts. Experiences often win out over possessions in our memories, and research suggests that experiences bring people more happiness than material things.
While it's hard to get together in person, there are still fun things you can do virtually or while maintaining social distancing. You can explore a nearby park or nature centre with your friends and family, ice skate, ski, visit a zoo, golf or any number of other activities (provided everyone wears a mask). Online, you can host a talent show with your family, or watch your favorite holiday movie using Netflix Party, Amazon Watch Party or apps like Scener.
Pro tip: If you want to get fancy, take a virtual craft course. That hat you planned to buy for your sister might bring her joy for a few months, but the memory of the knitting tutorial you did together — and all the funny mistakes you made while at it — will stick with you both for a lifetime.
Don't get caught up in what you feel like you should spend during the holidays. Right now, when finances are tight for everyone, having a good plan will make your 2021 goals more attainable. Focus on how spending wisely today can help you afford the holidays of your dreams in the future.
If nothing else, the greatest — and cheapest — gift you can give yourself is introspection. Make a list of 12 things you did this year that you're proud of. Maybe you didn't make as much money as you planned, but I promise, if you made it here, you've done something worth celebrating.
Written by: Daniel Lee
© 2020 Harvard Business School Publishing Corp. Distributed by The New York Times Licensing Group
