November 29, 2024
US News recently published an article by Jay Zagorsky, Clinical Associate Professor of Markets, Public Policy, and Law, discussing best ways to pay for holiday gifts.
A recent Gallup survey shows that nearly 40% of U.S. shoppers plan to spend over $1,000 on holiday gifts this year. With an array of payment options like credit cards and buy-now-pay-later services, managing holiday spending can be tricky. To help curb overspending, Zagorsky suggests using cash, which encourages budgeting, curbs impulse buying, and eliminates the risk of credit card interest.
Paying with cash also fosters a stronger sense of ownership, making consumers value their purchases more. For online shopping, using cash to buy gift cards is a smart way to stick to a budget. Supporting the use of cash ensures accessibility for all, particularly benefiting low-income or elderly individuals who may depend on it, highlighting the critical role of cash as a payment option.
“Spending paper money causes a momentary feeling of regret, research in consumer psychology shows. This in turn helps slow down purchases. People don’t feel the same pain when they use credit cards, because the bill comes due in the future,” Zagorsky adds.
Ultimately, using cash helps reduce financial stress during the holidays, making the season more enjoyable.
