As many of us take full advantage of holiday shopping deals and steals, we may be wise to listen to our January selves.
January Self deals with the inevitable excess leftover from the holiday season. January Self is the one who joins the gym after all the holiday cookie consumption and the one who exterminates all the tinsel and pine needles from the carpet. Of particular importance are the credit card bill(s) that January Self may have the pleasure of opening after a holiday spending spree.
“What harm can a little holiday generosity cause?” our December selves may say.
The research suggests that financial stress is one of the worst carryovers into the new year. This is largely because financial stress is usually a snowballing stress. Unlike extra pounds and a messy house that may ebb and flow, credit card debt tends to multiply on a monthly basis if not paid off in its entirety. What’s more, the financial stress we parents carry can directly affect our children in both the short-term and for a lifetime.
Stressed mom, scared kid?
In a recent report in the Journal of Pediatrics, a 22-year-long study of families showed “unsecured debt,” namely, credit card debt, “is negatively associated with socio-emotional development” of children. According to the study, children whose parents had unsecured debt exhibit, on average, more behavior problems than those whose parents do not have unsecured debt.
Anxiety over debt may play out in a way that is especially shaming for our January Self. In spite of all our New Year’s Resolutions to be better parents, anxiety over credit card debt can inspire anger at all the necessary expenses (e.g., veterinary bill, kids’ braces) over which our family members have no control.
The invisible piggy bank
The conclusion that chronically stressed parents can create a stressful environment at the home isn’t earth-shattering. What may be surprising, though, is how many parents in the U.S. contend with financial stress of their own making.
In a 2015 study conducted by the Federal Reserve Board's Survey of Household Economics and Decisionmaking (SHED), nearly half of respondents who lived with children in their home said they would borrow or sell something to cover a $400 emergency expense. Yet, among this same population, nearly a quarter planned to borrow to finance holiday spending. For some American parents, a lack of savings for emergencies does not eclipse a willingness to overspend for the holidays.
The SHED study also found that of the respondents who planned to use credit cards or put their gifts on the Kmart layaway, half indicated that they expected to pay off that debt within three months. A significant minority, 13 percent, expected to be carrying the debt for a year or longer.
Like debt repayment, our best laid plans as parents often get derailed. We strive for practicality with a sprinkle of spontaneity. Sometimes the rush of holiday excitement takes over, however, and we don’t always make our best decisions. We know that behavior we model can be our children’s best or worst textbooks.
This is where many of us as parents live in the tension of our desire to provide stability and security to our children while not becoming a total (as Buddy the Elf might call us) “Cotton-headed Ninny-muggins.” Once again, January Self can help us to mediate this tension. When all the glitter of the holidays has turned to winter blahs, January Self reminds us that oftentimes the best overspending we can do is with our time.