Overspending and the True Meaning of Christmas – Presented by Mark K. Lund, Financial Advisor in Utah

According to Gallup, this Christmas individual Americans intend to spend an average of $932 on gifts.1 That’s up nearly $100 over last year.

Are people planning to spend more because they have more money in their pockets? Not exactly.

Over the past year Americans have been relying more and more on credit to make ends meet. According to an analysis of Federal Reserve data by WalletHub, in the second quarter of this year alone credit card debt increased by roughly 6% compared to the previous quarter.2

Americans haven’t yet reached the record debt load (when adjusted for inflation) of 2008. However, with record inflation and a dwindling savings rate, it seems we are trending that way.

But aside from what’s happening in the economy, there’s something about the Christmas season that lures us into overspending. Certainly it’s known as the season of giving. But there’s an emotional component that drives our habit of spending more than we know we should.

Christmas has become a season where all kinds of relationships are assessed. Parents, children, spouses, in-laws, and even employers will be judged by the kind of gift they give. And it’s a miserable feeling to be found wanting.

If you feel like you haven’t been on the best terms with a loved one, you might imagine that you can set everything right with an impressive gift at the end of the year. And impressive gifts are expensive.

Ironically, when someone treats us this way, we usually see right through it. We won’t be bought off that easily.

Reader’s Digest, the world’s largest subscription-based magazine, just passed the hundred-year mark.3 They’ve long been known for publishing amusing and poignant stories from their readers. In one collection you can read for free online, readers submitted family stories where something unexpected happened to make the holidays deeply meaningful—a case of “Christmas magic.”

These stories span a century, yet in nearly every one, the incident occurred when the people involved were facing a financial shortfall. A father has been laid off. A mother doesn’t have the money to buy the gifts her children want most. A family lacks the money to buy even a small Christmas tree.

Sometimes the “miracle” occurred in the form of an unexpected financial gift. But more often the people never got the wished-for windfall. And as a result they ended up figuring out how to make the season special anyway. The wonderful experience and the memory worth passing down came from the discovery that they were profoundly blessed in other ways.

The collection is worth reading as a reminder of the true meaning of the holidays (have a Kleenex handy), but the stories also serve as object lessons about the limits of money. While we all need it to live on, it often can’t buy the things we desire most.

We wish you and your family a happy holiday season and hope that it’s a time of deep enjoyment where you make lasting memories.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc., A Financial Advisor in Utah
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. http://go.pardot.com/e/91522/generously-holiday-season-aspx/8t8k1w/1764705527?h=epwcHhHboyVcBjycORT-rEtK05dlEjPhH5Pl3NmgQGQ
2. http://go.pardot.com/e/91522/c-credit-card-debt-study-24400/8t8k1z/1764705527?h=epwcHhHboyVcBjycORT-rEtK05dlEjPhH5Pl3NmgQGQ
3. http://go.pardot.com/e/91522/list-christmas-miracles-/8t8k1p/1764705527?h=epwcHhHboyVcBjycORT-rEtK05dlEjPhH5Pl3NmgQGQ

Disclosure:
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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