How to Master Your Holiday Shopping List

A shopping expert shares her secrets for coming out ahead during this frenzied season.

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Between the tempting discounts and appealing holiday scents, retailers are doing what they can to get your money this time of year. But with a few tricks, we can beat them at their own game, says Kit Yarrow, consumer psychology professor at Golden Gate University in San Francisco. Yarrow has studied how people make their purchasing decisions for years, and we asked her to share some of her top strategies for beating the holiday rush to spend. Excerpts:

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What is it about the holidays that seems to inspire people to spend more money?

It's the most social and celebratory time of the year. Parties, events, and entertaining inspire a boost in spending on clothing, candles, candy, and everything in between. There's also a primal instinct to light up the darkest months of the year, which adds to our desire to spruce up and tech-up our homes. And, of course, gifts—which account for about three-quarters of the average shopper's holiday budget.

What's different about this year?

This year is all about deals and delights. Retailers have mastered the art of the bargain, namely short-term sales, insider-only specials, and limited-location offerings that create a sense of urgency in shoppers. Rather than the progressive discounts of previous years, this year retailers are spurring earlier purchases with time-limited big discounts throughout the season. And it appears to be working, Black Friday was the biggest retail sales day in history and email deals are getting unprecedented response rates.

To counter, consumers are deploying an arsenal of deal-seeking weapons. They've become masterful in using a host of online shopping and price comparison tools, they're unabashed about requiring free shipping and returning less-than-satisfactory purchases, and they're increasingly using mobile technology to compare prices in stores and snag deals anywhere, anytime.

Also different this year is what shoppers want to buy. After a year of bare-bones inventories and uninspiring merchandise, retail shelves (and webpages) are brimming with enticing offerings. It's a match with what shoppers want. The austerity of the previous few holiday seasons has been replaced with a craving for delights. Jewelry, electronics, clothing, and tasty treats are back on top of wish lists. It's retail kismet of sorts—inventories match the spirit of today's consumer. And shoppers are responding by not only purchasing gifts, but replenishing their own closets, homes, and pantries.

[See How to Keep Your Holiday Spending in Check.]

Are there pitfalls or places where shoppers are more likely to make poor spending decisions?

Bargain-hungry shoppers can get so excited about what they're saving that they forget about what they're spending. They're also more prone to buying things that aren't quite right, or not what they really wanted. This can result in more buying because the purchase isn't satisfying. Which makes that bargain not much of a bargain.

People who subscribe to lots of retailer emails or deal-a-day programs are putting themselves in harm's way. They're constantly forced to consider purchases, which means they're frequently in shopping mode. People spend less if they wait until they have a need or want and then go shopping.

Those short-term sales that I mentioned earlier churn up emotions like competitiveness, the fear of missing out, or a sense of urgency. These emotions cloud thinking and you want to be sharp when you're spending money. Free shipping with a minimum purchase or a free gift with purchase can be pitfalls, too. People will often hunt for something else to buy to meet those minimums, and it's not always something they really needed or wanted.

These things can all be great ways to save money, but I think shoppers should be aware of how they can be manipulated by them, too.

[Earn an Extra $500 for the Holidays]

Can you share some of your own holiday shopping tips and secrets?

Don't go into debt to purchase holiday gifts. Debt is a terrible emotional burden and it hurts relationships. Your family and true friends would rather have a "happy you" than anything you could buy for them.