1. You're making financial decisions with your heart, not your head. Amanda Mulfinger, a psychologist who owns a small group practice just outside of Minneapolis, believes this is where many consumers go wrong.
"Part of the reason people spend so much money during the holidays is because they're chasing the idealized picture of the holiday that they have in their heads. It doesn't feel fun to just set a budget and stick to it," she says. "We believe that the more money we spend, the better the chances that we'll be able to purchase the perfect holiday."
Her recommendation? If we focus more on what we love about the holidays, beyond the shopping part, and we make it a point to engage in non-spending activities, whether that's baking Christmas cookies with friends or volunteering at a soup kitchen, then suddenly, "the holidays are both more meaningful and a lot less expensive."
2. Your gift list is too long. Dawn Casey-Rowe, a social studies high school teacher in Providence, Rhode Island, who just finished writing an upcoming book, "A Broke Teacher's Guide to Success," suggests considering whether someone can be cut from your gift list.
Sure, it sounds cruel, but Casey-Rowe points out that "many times, we buy out of guilt or obligation while the other party is doing the same thing. If you can get a no-buy agreement with some people, that will go a long way to helping you reduce holiday costs."
You can always be truthful and explain that it's nothing personal, but you're trying to save money. Most people will likely understand that.
3. You're glued to social media. You may not realize it, but social media can affect buying patterns.
Vassilis Dalakas, a consumer psychology specialist and a professor of marketing at Cal State University–San Marcos, says you might save money by staying away from Facebook. After all, your friends and family may be posting photos of shopping bag after shopping bag or of elaborate holiday parties that they're throwing.
"They essentially establish norms," Dalakas says.
And if their normal is in a higher financial bracket than your normal, you could be in trouble. After all, Dalakas points out, we all have a desire to win.
"So not only are [we] likely to follow those norms established by our peers but we are also likely to try and do better than them, which means spending even more money," he says.
4. You're overdoing gift cards. Arguably, one of the best ways to waste money is to get everyone on your list gift cards. Look at the math. Unless you're getting everyone $10 gift cards, you're probably buying gift cards worth $25, $50 or more, depending who you're buying for. So let's say you're shopping for your brother-in-law. You want to get him something nice, but you want to avoid that tradition of being broke in January.
Now, you can give him a $50 gift card to his favorite restaurant or home improvement store, and he'll probably appreciate the gift (he'd better). But unless you're going to a gift card reselling website, like GiftCardGranny.com or Cardpool.com, you're almost certainly going to spend $50 on that $50 gift card. But if you shop and look for deals, hypothetically speaking, you might buy him a sweater and slacks on sale for a total of $35. He does well, and you've saved yourself $15.
These numbers add up, and if you plan on buying a lot of gift cards, you will save time, but you will be killing any chance to save money.
5. You wait until the last minute. Starting early means you'll have more time to give a loved one something meaningful and relatively inexpensive, like, say, a handmade scrapbook.
It also means you have more time to look for sales and consider what your friend or family member really needs.
"Do a little detective work to see where they shop, what they were looking to buy, if they have an Amazon wish list," Casey-Rowe suggests, adding that too often, we end up getting the recipient what we would like to receive. And while there's nothing inherently wrong with that, as Casey-Rowe says, if the gift isn't used or is underappreciated, "that creates waste."
And, really, if you're smart about how you buy your gifts, you're really giving yourself at least two presents – less stress and more money.