consumer_confidence_leads_to_overspending

With the holiday season hot on our tails, consumers across the country are gearing up for their annual shopping binge. Now that the government shutdown is over and a debt deal has been struck between opposing parties, economists have already surmised that the two events have collided to give consumers that extra confidence boost necessary to fully engage in holiday shopping warfare: envision a cloud of smoke rising after the extra rapid swipe of an Amex card, effectively burning the cashier’s eyes.

Whatever you do, don’t let these articles cajole you into spending more than is necessary. Just because the government has agreed to continue to pay off their ever-increasing debt, doesn’t mean consumers should follow suit. It’s kind of like that age-old question your parents would rhetorically postulate when you begged for that Tamagotchi in the late 1990’s even though you were almost a freshman in high school. If all the kids at school jumped off a bridge, would you follow them? Now that I am older, I know the smart and sensible answer is a resounding no.

The problem is I don’t know that many people who plan their holiday spending habits based on government catfights. It’s not as if I was too privy to my parent’s finances when I begged for an electronic, Japanese pet. Yes, the state of the economy will affect stocks, bonds, and the job market, and people are not going to buy property when the housing bubble is about to burst (well, not again anyway…), but just because the government kissed and resentfully made-up for their public, and quite shameful tantrum, this should not translate into consumers spending thriftlessly.

Say, for instance, the country’s unemployment rate went down 5 percentage points overnight and consumer confidence went up as a corollary effect. Are you going to go out and buy stuff you don’t need just because everyone seemingly is? Well, this is essentially what happens every holiday season. People feel the holiday pressure to overspend because everyone else is. Call it consumer confidence or consumer confusion, but either way you buy it, it has a strong potential to turn into our least favorite word – debt.

This holiday season, do spend time and share a laugh with your loved ones, and do eat that extra piece of Mama’s homemade apple pie on Thanksgiving. Don’t spend beyond your means, and don’t buy gifts that are meaningless, like Tamagotchies.

If you do engage in the latter, just know that we will still be here to provide debt relief and offer you some helpful New Year’s resolutions.