You're 'wired' to overspend during the holidays, expert says — here's what to do about it

cnbc.com:

The holiday season is a time to give thanks, reflect on the past year, and spend time with family and friends. However if you're not careful, it can also be a time you overspend on holiday purchases.

About 83% of Americans plan to buy gifts for friends and family this holiday season, according to a recent NerdWallet poll.

Americans expect to spend an average $1,014 on Christmas or other holiday gifts in 2024 — «substantially more» than the $923 reported last year, according to a Gallup poll published Oct. 25.

Roughly 10% of consumers expect to draw from their emergency fund to buy gifts, and 9% will prioritize gifts over household bills like utilities and debt payments, according to the NerdWallet survey.

Almost half of shoppers will fund this year's spending with loans or credit cards, according to a recent EY survey. Meanwhile, 28% of people are still paying off credit-card debt from the 2023 holiday season, NerdWallet found.

People have an innate impulse to overspend, experts say. They are «wired» to be consumers, said Brad Klontz, a psychologist, certified financial planner and behavioral finance expert.

«For 99% of our time on earth, thinking about the long-term future hasn't served us very well,» said Klontz, who is a member of CNBC's Financial Advisor Council and the CNBC Global Financial Wellness Advisory Board. «Meeting our immediate needs was what it was all about.»

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The short-term gratification of giving gifts to loved ones can eclipse the long-term focus that's needed to be good with money, Klontz said. That's where many