How much will Christmas debt affect your workers?
It’s started… the countdown to Christmas and the slick marketing messages telling us to spend, spend and spend.
The result is that millions of workers will again put Christmas on credit, racking up substantial debts that will cause them distress and anxiety for months to come. According to research carried out by the TUC, one in six average-income families took until June to clear debts generated last Christmas.
So why do we do it? Well, an increased trend towards ‘emotional spending’ means that instead of making rational decisions about spending and debt, our spending habits are now being increasingly fed by our emotional vulnerabilities. Sadly, this is something the marketers are only too keen to play on: whether it’s being encouraged to use a credit card because money can’t buy everything or being told to spend because we deserve it.
This is so much so that the key to helping employees to stay out of debt this Christmas might be less about teaching them how to set a budget and more about helping them to recognise their emotional spending drivers.
Differentiating between needs and wants
We can all recognise the entrenched part of our society that equates power, success and beauty with monetary wealth. We are programmed to believe that the more we have, the more worthwhile we are. This may result in not being able to buy nice things over Christmas leaving us feeling depleted, which can further drive our desire to spend.
By helping employees to differentiate between what they ‘need’ and what they ‘want’ you can help them to stay out of debt. A ‘need’ might be the ability to heat the house during the cold months and provide a Christmas dinner. A ‘want’ would be that new flat screen television or the latest smart phone. Yes, this might temporarily make you feel like a ‘super parent’ to be giving such a great gift, but do the children really ‘need’ it and is it worth the stress of getting in debt for?
When I get employees to step back from the festive advertising and think through what it means to have a ‘perfect’ Christmas, the focus quickly shifts from acquiring material possessions to relaxing, having fun and enjoying quality time with friends and family. Things that don’t actually require the stress of the expense of trying to make the house look perfect, cooking an extravagant meal or showering everyone with unaffordable gifts.
Many parents associate giving their children a great Christmas with providing them with costly presents, but the reality is that most children would feel far more loved and nurtured after getting to spend quality time with a parent. So why not plan a cheap family day out or save on the cost of decorating the house by indulging in some Christmas craft activities together?
Once we shift the focus from spending money to spending quality time together the options are endless. Perhaps the Panto’s a bit expensive this year, but it’s free to build that snowman together or help out one of the many charities operating at Christmas. The challenge is: knowing that you don’t have to spend money you haven’t got to enjoy Christmas. Which brings us back to focusing on the emotions you want to create in yourself and others, and the best ways to achieve this.
Increase resilience to marketing propaganda
Another reason employees might find it difficult to avoid overspending is the sophisticated power of consumer brands. Manufacturers have moved far beyond promoting the features of their products, to persuading us that what we buy completes or defines our identity. You don’t just need a designer handbag or smart phone, you become the kind of person who owns one.
The first step to helping employees to resist the relentless marketing is to show them how to work out which emotions are driving them to want certain material possessions.
What is it they’re really feeling? How will buying that particular item change their life? Perhaps they think it will help them to improve their social life, be seen as a better parent, mend a failing relationship or appear more organised, attractive or confident. But once they recognise the emotional desires driving them to overspend, they’ll become far less vulnerable to even the most highly targeted adverts. They might even be able to start taking steps towards achieving their emotional goals without raiding the bank or maxing out their credit cards.
Provide confidential access to emotional support
For the most part, spending makes us feel good. It’s only later – if we find ourselves shoving needless purchases to the back of the wardrobe, or rushing to return them to the shop on a wave of guilt, or avoiding our credit card statements – that we might realise we have a problem.
Of course, it’s important that someone starting to get in debt has timely access to a debt specialist. But it’s just as important to encourage them to talk about the emotions driving them to overspend, before this has time to translate into a horrendous debt problem. That’s why, as well as providing employees struggling not to get into debt with access to confidential financial support through the Validium EAP, we also provide them with confidential access to emotional counsellors. These trained specialists can help employees work on negative emotions and feel good about themselves again, without the crutch of emotional overspending.
Unlike other addictions, such as drugs or alcohol, shopping isn’t something employees can totally avoid, as we all need to buy clothes and food. It’s therefore essential that those who are embarking on the slippery slope of overspending get directed towards appropriate emotional support to identify and address their issues.
Emotional spending types
Emotional spending is on the increase, giving rise to several new breeds of spender:
Frugal fatigue spenders make such rational and cautious decisions about money all year long that they make themselves and those around them miserable. Yet come Christmas they flip to the other extreme in a sudden unaffordable rush of overspending.
Experienced spenders spend to feel good and never more so than at Christmas. Most of what they buy ends up in the back of the cupboard, but the ritual of spending helps them to escape their worries, every bit as much as drinking or gambling might.
Givers overspend on other people to alleviate the sense of inadequacy they have about their relationships with others. They wish their relationships were better, but don’t know how to make this happen, so buy gifts to bridge the gap, without necessarily expecting anything back.
Bulimic spenders overspend only to bring everything back to the shops in a state of self-loathing. Although their 'reverse shopping' habit keeps their finances under control, they expose themselves to high stress levels and negative feelings about themselves.
Fortunately, emotional overspending is about our state of mind. It’s something we can all avoid if we take a step back and look at what’s driving us to overspend, while meeting our emotional needs in more effective and less expensive ways.
To find out more about how to help your employees avoid needless emotional overspending this Christmas, call us on 01494 685200 or email [email protected]