Just when you thought the holidays were over, suddenly they're coming back to haunt you.
Yes, it's Visa time, and not in a good way, as the January credit card bills land with a thud -- further evidence that many of us went on a spending spree at the end of 2009. Online sales were up 5% from a year earlier, and in-store sales kicked up, too.
If your holiday budget ballooned bigger than planned, don't fret about the charges for the cashmere sweater for Mom and the Wii for the kids. Instead, let those Ghosts of Spending Past inspire you to make smarter, cheaper gift choices next season.
According to researchers at Stanford University, people tend to appreciate cheaper gifts as much as more-expensive ones. And people typically underestimate the cost of the items you bought for them anyway.
In other words: You could have spent a lot less and made everyone just as happy. Could this wisdom prevent a spending hangover next January?
The tradition of overspendingFor decades, it has been a holiday tradition to overspend. Americans consistently have reported that it's taken them months to pay off holiday credit card bills.
And though it would be nice to believe all those reports about our "new frugality," the jury is still out.
Unfortunately, part of that decrease was due to a record number of charge-offs. Also, many people had defaulted on their credit cards or were delinquent and weren't using them, according to Moody's.
Bottom line: Seasonal extravagance -- whether it's Christmas season, wedding season, graduation season or hunting season -- is a persistent financial risk.
Until now. Knowing that friends, neighbors and loved ones don't peg their appreciation of a gift to its price tag is like having a Get Out of Nordstrom Free card. If it's the gift that counts, not what you spend on it, then spend less.
What the studies foundIn two studies that I'll explore here, researchers set out to examine why gift givers often overspend and whether the cost of a gift is driven by the belief (or hope) that a higher-priced gift will inspire more appreciation from the person who receives it.
The studies, by Frank Flynn, an associate professor at the Stanford Graduate School of Business, and Gabrielle Adams, a doctoral student, were summarized in "Money Can't Buy Love" in the March 2009 issue of the Journal of Experimental Social Psychology.
Note for Valentine's Day, guys: Gals who received the more-expensive rings weren't any more appreciative than those who got cheaper ones.