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I was in a large discount retailer yesterday with my grandson, picking up some school supplies for his return to school after the summer break. Bearing in mind it’s late August, around 20% of the store was roped off while staff were busy unboxing and displaying Christmas merchandise. Unbelievable!
I overheard a few people asking staff when the display would be open for business, and you could sense a general excitement within the store about this new buying opportunity. I think the tills will be busy when it is.
As is my habit, this got me thinking. While most of us use these types of stores, they really target individuals with lower disposable incomes and can be a lifeline for families on a tight budget. This is the very demographic that research constantly shows is failing to save enough into retirement accounts; an often-cited figure is that around 35% have no savings at all.
The same consumer who relies on a store to stretch their budget for essentials is being enticed by highly effective marketing to spend on non-essential, holiday-themed items months in advance. The psychological triggers that make us excited to buy tinsel in August are often at odds with the discipline required for long-term financial planning.
The desire for immediate gratification—the thrill of a new purchase—can overshadow the need for delayed rewards, such as saving for a secure retirement. While a single holiday purchase may not seem significant, the cumulative effect of a culture that encourages constant spending can make it even harder for vulnerable populations to break the cycle of living paycheck to paycheck.
It may be easy for me, from a position of financial security, to have these thoughts, and I might come across as judgmental. But that’s not how I feel at all. I look at this from a place of true concern for the unpreparedness many people face as they move toward retirement.
The best early Christmas gift for a lot of people wouldn’t be more baubles and shiny plastic novelty presents. Instead, it would be the gift of opening a 401(k) and sending their future self a thoughtful and worthwhile treasure to be enjoyed for many years to come.
Happy early holidays, and bah humbug to you all on this sunny August morning.
Everything we see, everything we hear and everything we read every single day is purely designed to separate us from our money, and put it in their pockets. A lesson I’m trying to teach my younger son.
Perhaps people can buy the items in August at a greater discount than in November? Perhaps it won’t be available in November? Maybe? Maybe not. But if a Christmas purchase brings joy to a person in August, have at it. I wouldn’t presume to question the wisdom of a person making such a purchase. I have no idea of their financial standing.
Besides, buying a Christmas item in August and having a 401(k) at the same time are not mutually exclusive. You may be selling short these ‘vulnerable populations ‘ – however you may be categorizing them – regarding their ability to manage their money.
A bit tangential, but immediately after Christmas the shops here in Australia start selling Easter eggs and hot cross buns. Every year it brings a bout of predictable outrage …. “Easter eggs! We’ve only just got Christmas done!”
In the US there’s barely a month between Thanksgiving and Christmas. Wish we could get Thanksgiving moved earlier. Travel would be better in the northern states, and who holds a harvest festival at the end of November anyway?
We get Valentine’s Day stuff in between those, but on 15 Feb, the Easter stuff comes out.
Big box stores have areas devoted to seasonal merchandise. The Christmas stuff is replacing all the garden/outdoor goods that have occupied the space the last few months. That inventory is now pretty depleted and demand for it is dwindling— no restocking is done for these kinds of goods. So the “new” merchandise are the things consumers will buy for the next season. It is jarring to see— but it is part in inventory management.
i regularly shop at Walmart. To be honest, I haven’t noticed many shopping carts filled with a lot of nonessential junk. And I’m not going to judge the discretionary spending of someone who hasn’t spent the summer at a vacation home or had a pricey vacation. My feeling is that everyone deserves some kind of joy—even it is buying a something glittery in August.
I find Christmas, at least the overscheduled, overcommercialized version we have here in the U.S., very stressful, always have. When I see Christmas stuff in stores in early fall, I find it triggering (oh, God, already? Didn’t we just do this last year?). It doesn’t tempt me to spend. Unless I see those holiday Mint M&Ms. I like those!
Alcohol. Opioids. Tobacco. Cocaine. Sex. Gambling. Shopping…… Things that are addictive for some people.
And what do you do in the afternoon?
Oh, in the afternoon I just waste time😛
Definitely covered all the vices!
Hey Mark,
Can you really buy tinsel in the UK? It was banned years ago in the US. Without tinsel on natural trees they can be ground up for mulch.
Yes David, you certainly can…the cheap tacky plastic variety.
You mean the real metal version, right?
Yeah the kind where if a strand of the stuff happens to fall across both prongs of the electrical plug no quite inserted all the way into the wall outlet……..
”Nobody move! A fuse is out!” A Christmas Story.
Join me in the judgmental dock Mark. You are correct. As I have said before, let me follow someone around the grocery store or big box store and I’ll find savings from their shopping after a month or two that will allow them to start investing in a mutual fund.
It’s simple common sense when it comes to spending and living within one’s means. That part does not require financial literacy., it’s more psychological I think.
I do marvel at the items in people’s trolley’s. But I guess that’s because I’m nosey 😉
Mark, when I read your post, I thought the first gift to open up on Christmas, even before opening a retirement account, would be to start a sinking fund for the next year’s Christmas. This way you don’t go into credit card debt. When I learned about sinking funds, it changed our finances. As others here know, Spouse and I are “regular” Americans and were not taught about finances from our families. Had to learn on our own. Thanks for the good thoughts. Chris
Don’t mention it to Mr Quinn. I have a line on my spending spreadsheet for Xmas gifts!
Mark, I think Dick would be happy we have and use a sinking fund. I never used a spreadsheet, but now that Spouse is retired, they are keeping one. LOL! Chris
Hey Chris,
What is a sinking fund?
a sinking fund is a way to save for irregular expenses ahead of time. It doesn’t have to be just Christmas. We also use them for insurances, property taxes, etc. Some people use for more categories like car maintenance appliance replacement and other expenses that you know will come up sometime. We have a general “life happens” fund for stuff like that. It is different than our emergency fund. We know $$ will go in and out and we just build it back up again when we have to use. I learned about it from Michelle Singletary, the Washington Post columnist, and it made sense to me. Hope that helps. Chris
I assume Chris means what my credit union calls a “Santa Saver” account? I have an automatic deposit to this account every month and then they dump it into my checking account around Nov. 1. I agree with Chris—I’ve had one for many years, and it’s a great way to keep holiday spending under control.
Yes! Thanks, Dana. C
Thanks Mark. We are currently experiencing the effects of a hurricane passing a few hundred miles off-coast – rainy and windy, so it doesn’t feel much like Xmas (or summer) here. Your post touches on a number of my favorite topics, including saving, giving, and mentoring. Lots of wisdom in a few paragraphs.
Hopefully it stays out at sea!
The eye is staying out to sea, but the outer bands have been hitting the North Carolina coast. Rip tides and flooding, with sections of NC12, the road along the Outer Banks, closed. I’m a couple of hundred miles inland, which means that I am just enjoying cooler temps (in the summer here, low 80s are a welcome relief).
Thanks for making me think at 5 in the morning.
It’s always good to think lol
If you must buy Xmas tat – buy it on Boxing Day or thereafter when it is 50-75% off.
And anyway it’s all a bit early – surely the garden clearance stuff has to make way for Halloween tat first. Then for our US friends Thanksgiving tat.
The best thing about Xmas doesn’t cost money anyway – it’s just people are a bit less aggro for a few days (OK maybe not those refereeing fractious family dinners).
I saw Halloween stuff in a local store in JUNE. I’m used to it appearing in August. But June?!
It is getting ridiculous… the store I was in yesterday already had Halloween merch on display beside the discounted patio furniture.