It feels like our Summer is starting, lockdown restrictions are being wound back, and Christmas is just around the corner. It looks like it we may be ending 2021 on a good note, at least, I hope.
With the mood of the nation potentially lifting as we head into Christmas, so too may our propensity to spend over the holiday period. Whilst there is always an expected bump in consumer spending heading into the Christmas period, I feel that we should be looking to tame our habits. This view is largely due to two main themes:
1) 2022 will likely bring some uncertainty, or opportunity, and as such we should be preparing for this; and
2) Consumer spending these days has increasingly been directed at products which are limited in lifespan, or often used for only a short period of time (anyone with children will know what I mean here). This spending on fast fashion or trend toys has clearly had an impact on the environment.
As we head into the end of the year, there is a recognition that lockdown has had a financial impact on different people in different ways. Some have had the benefit of 26.6%[1] increases in their house prices over the past year, others have had a full income with reduced daily expenses given they are working from home, whilst others have either not been able to work, or have been a business owner that has suffered due to reduced revenues and potentially increased costs over the past year. This has clearly created a divergence of fortunes, often through no fault of the individual, but more due to supportive Government and Reserve Bank policies which have inflated asset prices, coupled with the lingering impacts of the Covid pandemic.
Given the above, the financial confidence that individuals have heading into the holiday season may vary considerably. Some, like myself, may find themselves with additional cash available to spend, whilst others may find themselves in a worse position due to their fortunes over the year which will impact their spending decisions positively and negatively respectively.
For those that are more financially challenged heading into the holiday season, I hope that you are looking at ways to be a little thriftier and limit the urge to splurge this holiday season. One way to limit this spending is to agree with family a spending limit, or to agree on a present limit.
In our household, we limit our spending and stick to one or two gifts to immediate family only. I have seen a lot of pressure to give gifts to the wider family, which can be very costly when including cousins, nieces, and nephews.
To avoid this expense and stress, people should be upfront ahead of time on both the amount to spend, and number of gifts. This reduces the expectations and pressures, and in all reality will likely reduce the number of dead gifts received – i.e., those gifts which are opened on Christmas day, and not used after; stocking fillers if you will.
How many times have we given gifts to Children and there is a double up, or the child has moved onto their new favourite trend. More times than I care to remember in my experience, and each of these times, it simply results in wasted money.
Key thoughts here are:
- Think about who you are buying for, and what they would value;
- You do not prove anything by being the person that buys the most gifts; and
- Spending two hours under the Christmas tree whilst little Jimmy opens his tenth present filled with plastic is not the most fun part of the day.
Now moving on to my second point. Christmas is clearly a significant event in the calendar, and one that carries both cultural and religious significance for many. Given the overall importance, and the trend towards consumerism over the last few decades, it is not surprising that Christmas is the peak event in the consumer calendar.
Unfortunately, with consumerism, comes excess production which ultimately contributes to waste and landfill. Whilst I am not against free production, celebration and giving, I do feel we should be more in tune with the impact our consumption has on the environment – simply building another solar farm is not the only thing within our power to lessen our environmental footprint.
In line with the first point, if we were to think about what we were giving, and limit the amount of giving, we are likely to lessen the flow to landfill. According to Sustaintrust.org.nz, after Christmas New Zealanders send 50,000 extra tonnes to the landfill[2] which is not just a rounding error. It would be great if this could be reduced.
Whilst I understand that much of what is purchased at Christmas has already been produced, and therefore if we do not buy it, it will likely go to landfill anyway. If we were to change our habits at the consumer level, companies will then change their production forecasts, and retailers will change their orders. This will have a follow-on effect, albeit a lagged effect, which should reduce consumer waste. The key here, is that the behaviours we present now will impact the behaviours of others in the future – in my opinion, the consumer is the ultimate driver of environmental change.
Noting the two points above, there are some linkages here between reducing our spending and reducing our consumption. Reduced spending should lead to better financial wellbeing, which should in turn reduce waste. A better mind, and a better environment.
Personally, I will not be spending more this Christmas, but will instead look to spend more time with family. It has been a funny old year in Auckland, with many frustrations, and some setbacks for many. As such, my priorities this Christmas will be a special gift for my loving wife, and some dinosaurs and diggers for our little boy (a current toy trend which has shown no sign of abating). Given we will be spending Christmas with family, we will also give some gifts to our parents, but this will be it.
The prohibitive cost of postage, coupled with the current challenges of even getting the gifts to family on time, mean that we will not be sending gifts. This will keep it easy, and hopefully stress free. Ultimately, it should ensure we are able to enjoy the day in ways that really matter, like spending time with family. I hope that this is the one thing that we have all learned from these lockdowns, that this is the most valuable gift that we can give.
In summary, to avoid overspending and creating unnecessary stress this Christmas:
- Discuss early on how much you should be spending with family and friends. Do not feel pressured to take their recommendation, make an offer that you feel comfortable with;
- Think about who you are going to give to and make the gift meaningful. Often, we can be focussed on a single gift which is appropriate, but then lose sight in the lead up to Christmas day and splash out on little stocking fillers that no one really values;
- When buying a gift, think about the environmental impact and whether that same gift will still be valued in six months’ time. If it will not be valued, it may be worth passing on the purchase;
- Think about the values you want to teach those around you. If you are wanting to dilute the current consumerist climate which envelops Christmas, why not use this Christmas as an opportunity to share those views with others through your gifting. Whilst some will think you are trying to be a martyr, others will hear you; and
- Give with meaning, and with the confidence that you will not look at your bank balance in January with regret.
I hope through reading this you think a little more about the impact of your spending choices and realise that it is not only your bank balance that is impacted, but also the landfill, and ultimately our environment.
Wishing a Thrifty Christmas to all, and to all a goodnight!
[2] Reducing waste over the Christmas period – Sustainability Trust Wellington (sustaintrust.org.nz)
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