The "pain of paying" – the psychological discomfort of spending money – has historically been linked to cash transactions. Early research suggested that people spent less when using cash due to its tangible nature, activating pain centers in the brain or, conversely, failing to trigger reward responses associated with credit cards. This effect was thought to diminish the enjoyment of consumption when payment and consumption were closely linked.
However, the rise of digital payment methods has shifted this dynamic. Studies have shown that spending initially increased with mobile payments, similar to credit cards, though this effect weakened as consumers became accustomed to these technologies. Interestingly, payment notifications on phones and smartwatches have been found to reintroduce a form of "pain of payment," potentially curbing spending.
Recent research, particularly in increasingly cashless societies like Sweden, indicates a reversal in the traditional "pain of payment" concept, especially among younger generations. These studies, involving payment diaries kept by young adults, revealed that cash transactions were often perceived as having less impact on overall finances because they weren't immediately reflected in transaction histories or account balances. Participants described cash as "free money" or expressed a desire to quickly spend it, contrasting sharply with the immediate visibility and tracking afforded by mobile payments.
This suggests that the "pain of payment" is now more strongly associated with digital transactions for younger demographics, who are more accustomed to and reliant on digital tracking of their finances. For them, cash lacks the perceived "realness" of digital money, requiring conversion to a digital format to be fully acknowledged as spent.
While previous research suggested that businesses could benefit from promoting cashless payments to encourage spending, the current trend suggests a more nuanced approach. By refusing cash, businesses might miss out on sales from younger consumers eager to spend their physical currency.
Even traditional cash gifts, like those given at Christmas, may be losing their impact on younger recipients. Digital money gifts might be more effective in conveying a sense of "real" value and potentially lead to more considered purchases. The changing perception of cash and digital money highlights how evolving technology and spending habits are reshaping the psychology of spending.
The holidays are meant to be a time of celebration with family and friends. But they can also bring pressure to spend money on gifts, gatherings, and plane tickets home, exacerbated by brand emails, social media influencers, and family expectations.
With credit card debt rising and prices for many items still high due to inflation, overspending during the holiday season can add to the financial stress many Americans are already experiencing, said Dr. Marketa Wills, CEO and medical director of the American Psychiatric Association.
“The idea that one is on the hook for buying gifts for all their friends and families adds an enormous amount of stress on someone trying to have a perfect holiday,” Wills said.
But there are ways to get through the holidays without spending more than you can afford. From setting expectations with your family to making a budget to gifting experiences rather than things, here are expert recommendations to avoid financial stress this holiday season:
Start with a budget
To avoid overspending on gifts for family and friends, set a specific goal, said Matt Watson, CEO of Origin, a financial planning app. Ask yourself what your spending limit is before you start shopping.
“People get into ‘justification mode’ where you have a general sense of what you want to spend but then you see this really nice thing and all of the sudden you’ve done that a few times and you spend twice as much as you thought you might,” Watson said.
Watson also recommends that you include in your budget calculations how much you’ll pay for taxes and shipping.
Manage expectations with loved ones
In many families, the holidays mean going all out with gift-giving. But this can quickly become stressful if your finances make it hard to keep up. Managing expectations is key.
“You can avoid feeling inadequate, or like you’re not doing a good job, by having an honest conversation about where your finances are,” Watson said.
Being open about your money can be difficult, but sharing if you are struggling with debt or other financial issues can help family and friends understand that they should prioritize low-cost gifts or activities.
Don’t wait until the last minute
Planning your holiday shopping ahead of time can make it easier to stick to your budget,.
“When people feel rushed, oftentimes they’re going to buy more expensive things,” said Watson, who also pointed out that shipping costs increase closer to Christmas.
As you budget for the holidays, make a list of the items you want to purchase and slowly start buying them. This way, you divide your costs among several paychecks and avoid relying on credit for last-minute expenses.
Get creative
Wills recommends that people opt for homemade gifts if they want to show appreciation for their loved ones without overspending. Homemade gifts don’t always have to be crafts, they can also be actions.
“I will do babysitting for you, I will cook a meal for you,” Wills said. “Those kinds of things take a financial pressure off and make for a more joyous holiday season.”
In recent years, shopping expert Trae Bodge has noticed that younger people prefer to gift each other experiences rather than items. She recommends finding affordable, fun activities to do with your loved ones.
Examples include going ice skating, hiking, or hosting a potluck. You could also gift a photoshoot or framed pictures or digital albums to commemorate happy experiences.
Create your own traditions
Expectations or traditions you grew up with, such as buying expensive gifts for every member of your extended family, can cause stress during the holidays. This is what Bodge refers to as “keeping up with the Joneses,” which refers to trying to keep up with the expectations of other people rather than what is realistic for you to spend.
“Sometimes you may have a family member that is very financially well-off and they love to treat you to big, extravagant things. If you’re not in that same financial position, you should not feel compelled to return the favor,” Bodge said.
When creating your own new traditions, Watson recommends sharing the financial goals you have, such as saving for a house or paying off debt. This will help your loved ones understand why you’re looking to limit expenses during the holidays.
Divide spending responsibilities
Wills also recommends cutting costs by being selective with your expenses. For example, when it comes to hosting, even having a small group of people can be very expensive if you’re expected to pay for everything. If you’re in this situation, you could propose that everyone brings a dish.
“Think about having a potluck meal for the holiday. Have everybody bring something to the event to help share the cost,” she said.
Communicate your feelings
If you are having financial difficulties, it can help to talk about it with your family and friends.
“Sharing about stress can in and of itself be therapeutic for the individual who may be having concerns for that during the during the holiday season,” Wills said.
Making room to listen to your loved ones’ feelings is equally important, she said.
And if the holidays are a tough time for you, Wills recommends that you prioritize your mental health and good habits such as resting well and exercising.
Don’t be afraid to say no
It’s the season where social events are happening every weekend but if they are causing you too much financial stress or hurting your mental health, it’s okay to be selective.
Additionally, if you start feeling uncomfortable about certain conversations with your family, Wills recommends you take some time for yourself by taking a walk or removing yourself from the conversation.
Seek professional help if you need it
If you are experiencing mental health struggles, there are several resources you can use to find professional help.
In the U.S., you can dial 211 to speak with a mental health expert, confidentially and for free.
Other mental health resources include:
Veterans Crisis Line: call 1-800-273-TALK (8255)
Crisis Text Line: Text the word ‘Home’ to 741-741
The Trevor Lifeline for LGBTQ Youth: 1-866-488-7386
The Trans Lifeline: 1-877-565-8860
This holiday season, many Americans may find themselves unwrapping gifts they don't want. A recent survey indicates that **53% of Americans** will receive at least one unwanted present, a statistic that highlights a growing trend in holiday gifting. According to Finder, the total value of unwanted gifts is projected to reach an astonishing **$10.1 billion** this year, marking a significant increase in wasteful spending compared to previous years.
### Key Findings from the Survey
- **Prevalence of Unwanted Gifts**: Approximately **140 million Americans** are expected to receive at least one unwanted gift in 2024. Alarmingly, **one in 20** people anticipate receiving at least five gifts they won't keep.
- **Average Cost of Unwanted Gifts**: The average cost of these unwanted items is expected to rise to **$72**, up from **$66** last year, contributing to a billion-dollar surge in wasteful holiday spending.
### Most Unwanted Gift Categories
1. **Clothing and Accessories**: The most unwanted gifts, with **43%** of respondents hoping to avoid them. Interestingly, this figure has decreased from **49%** in 2022.
2. **Household Items**: Following closely behind, with **33%** expressing disinterest.
3. **Cosmetics and Fragrances**: Ranked third at **26%**.
4. **Technology Gifts**: Notably increasing in unpopularity, with dissatisfaction rising from **15%** in 2022 to **25%** this year.
### What Happens to Unwanted Gifts?
The survey reveals that regifting is the most common solution for dealing with unwanted presents, with nearly **39%** of Americans planning to pass these items along to others. This marks a shift from the previous year when a higher percentage opted to keep their unwanted gifts (43% in 2022 compared to 35% now). Additionally, about **32%** intend to exchange their gifts for something more desirable, while **27%** plan to sell them after the holidays—up from just **17%** last year.
As the holiday season approaches, it may be wise for gift-givers to consider whether their choices align with the preferences of their recipients. With a significant portion of the population expecting unwanted gifts, thoughtful consideration could help reduce waste and enhance the joy of giving during this festive time.
What’s on your holiday shopping list? I’m guessing it’s not a $3.5 million Yayoi Kusama painting or a $4.75 million David Hammons piece. But that’s what the rich were buying at Art Basel, the annual prestigious art fair that wrapped in early December in Miami Beach.
When I lived in Miami for a few years I couldn’t help but fall victim to the city’s flashy allure. Every day felt like brushing shoulders with model-like people straight out of a Hollywood movie (or reality show). So I saved for months, survived on Trader Joe’s $3 frozen meals, and finally decided to splurge $3,000 on my first designer handbag. When in Rome, right?
I gingerly walked into the Hermès store in the Design District, a glossy four-story temple of luxury. Frugal justified the choice because Hermès bags supposedly hold high resale value. Stepping out of the elevator, I spotted two sales associates — a man and a woman — talking to each other. I took a deep breath and mustered the words, “Do you have the bucket bag?”
The woman paused, exchanged a glance with her colleague, and replied, “No.” She softened slightly when I mentioned I lived in Miami. Feeling hopeful, I asked, “Could you let me know if one comes in stock?” She took my number, but when I tried to specify color choices, the man cut me off with a dry laugh and a heavy French accent: “No, no, no, no, no — don’t be greedy.” I changed my mind and left.
The uber-rich have long since moved past pricey purses, and this year they dropped quite a bundle on some notably extravagant items. Here are a few of the wildest things that were purchased — and proposed — in 2024.
The $6.2 million banana
In late November, crypto entrepreneur Justin Sun placed the winning bid on a banana taped to a wall at Sotheby's Contemporary Art Museum: $5.2 million, plus another $1 million in auction-house fees. The banana had been purchased from a fruit stand in New York City for a mere 35 cents.
It's not the first banana-as-art that sold for a tidy sum. Previous ones netted $120,000 and $150,000 for the Italian artist Maurizio Cattelan, known for critiquing the art market’s absurdity while making a fortune from it.
Sun has been known to lighten his wallet before. He once bid $4.57 million for a dinner with Warren Buffet to try to convert him into a crypto advocate. After Donald Trump won a second term, Sun invested $30 million in World Liberty Financial, a crypto platform the president-elect helped launch this year.
Sun followed up his banana buy with a video on X of himself eating it. “The taste is naturally different from an ordinary one," he said.
Time is money. So are these watches.
JAY-Z, the 24-time Grammy winner and longtime watch collector, debuted his $350,000 Bugatti Chiron Tourbillon in August at Fanatics Fest in New York City. Created by Jacob & Co., the watch draws inspiration from the Bugatti supercar, boasts 578 hand-assembled parts, and features a miniature engine that moves when wound.
JAY-Z has been a client of Jacob & Co. for 25 years, a relationship that secured him a spot at the front of the line for the exclusive timepiece. It has an inclined tourbillon, a feature aimed at improving accuracy by counteracting gravity, which adds to its rarity in the watch world. It's a statement piece for collectors who can afford it. You’re essentially wearing an apartment on your wrist.
Not impressed? Former NFL great Tom Brady sold $4.6 million worth of watches at a Sotheby's auction this month. The "GOAT Collection" included a rare Rolex Daytona Paul Newman "John Player Special" watch from 1969 that went for $1.1 million.
Virgin Galactic’s $600k tickets to space
For $600,000, Richard Branson's Virgin Galactic offers the ultimate adventure: a trip to space. Passengers experience weightlessness and see Earth from the perspective of astronauts — a blue marble floating in the void.
The journey, initially priced at $450,000, includes pre-flight training and luxury accommodations. Its website bills it as a life-changing experience. The company is facing problems posting profit and the next flight has been postponed to 2026, but Virgin Galactic has already sold over 800 tickets. Was it the price hike that held me back from buying one? Sure, let’s go with that.
Mukesh Ambani’s $100M private jet
Indian billionaire businessman Mukesh Ambani — the richest person in Asia — bought a Boeing 737 Max 9 and not just for transportation. It’s a flying palace, customized for one of the world’s wealthiest men. The $100 million jet includes a private suite, entertainment lounge, and office. It also boasts noise-canceling tech, high-speed internet, and automated controls. For Ambani, it’s the ultimate way to travel in style this holiday season.
But even with that price tag, it may not be the fanciest: The most luxurious private jet costs around $500 million and is owned by Saudi Arabia’s prince and businessman Al Waleed bin Talal Al Saud, according to the Times of India.
$270 nachos at the Miami Grand Prix
Finally, something less expensive — and tastier? — than banana art. At Miami’s star-studded Formula 1 Grand Prix this spring, the food menu went viral for its jaw-dropping prices. We're not talking $6 hot dogs at Yankee Stadium. This menu offered $270 nachos with black truffles and Wagyu beef, $280 lobster rolls, a $12,000 bottle of Clase Azul Ultra tequila, and a $560 bottle of Tito's vodka. We're not sure how much the actual race tickets cost.
Some fans argued the premium ingredients and exclusive setting justified the cost of the food. Plus, for an extra $400 you could add an ounce of caviar to your item of choice!
Donald Trump’s $2T "Iron Dome"
As Trump stumped, he repeatedly proposed an "American Iron Dome" aimed at defending U.S. airspace from missiles and drones and inspired by a similar system in Israel. The plan would cost about 2.5 trillion dollars, national security analyst Joseph Cirincione estimated. That's over three times the country’s projected 2025 military budget, leaving us to wonder how many taxpayers are on board with footing the bill.
Not to worry. Trump offers options for smaller budgets: Those who donate at least $1 million to his inauguration or raise $2 million for it can have dinner with his wife Melania or J.D. Vance the night before the Jan. 20 swearing-in.
After all that, maybe I should revise my holiday wish list. To keep it simple: a banana from a New York fruit stand or nachos from Dos Toros. Decisions, decisions.