Spending Tips Help Keep Holiday Shopping Jolly
Pointers Can Help Consumers Avoid Debt Stress
Last updated Monday, December 1, 2008 6:00 PM CST in Your Family
By Mark Foster
CREDIT COUNSELING OF ARKANSAS
It's the holiday season, a time to enjoy seasonal traditions such as decorating the home, baking traditional treats and sending cards to distant friends and family. And then there's the most popular holiday activity of them all -- shopping. The holiday season is a time when poor financial planning can lead to overspending and growing debt.
"It's very easy to get caught up in the joy of the season and buy what you want instead of what you can afford," said Steve Hoover, pastor of The Point of Bella Vista (a special needs church) and father of five, grandfather of two.
"While it might be hard to stick to a budget, if you don't have a budget you will end up spending way more than you should've," Hoover said.
Holiday overspenders can find themselves short on money while their regular bills still need to be paid, or perhaps be faced with higher credit card payments in the new year. Credit Counseling of Arkansas offers several holiday spending tips to help consumers avoid having a holiday spending hangover:
• Create a spending plan. Having a spending plan helps prevent overspending. Impulse buying can be a problem at any time, but even more so during the holidays. To create your plan, list all holiday-related expenses, starting with the obvious gifts and decorations. However, remember items such as greeting cards, postage, extra food costs and stocking stuffers. Then add up all of the expenses and compare with what you have budgeted to spend. It's that simple. If the expenses are more than you can afford, look for areas to cut back.
• Give a sentimental gift. Some of the most thoughtful gifts cost next to nothing. A CD slideshow of family photos or a framed photo of a favorite vacation would be less expensive than another $25 necktie -- and probably much more appreciated, too.
• Shop smart. Comparison shop and search for the best possible deal. And comparing prices online can save you both time and gas money. Because of the poor economy, there should be a lot of great deals on gifts this year. Look for huge markdowns after Christmas for family members and friends you won't see until after Christmas anyway.
• Eat smart. Americans tend to spend more money going out to eat during the holidays because of being rushed for time. Be careful not to overdo it -- you could end up with a full stomach but an empty wallet.
• Use credit wisely. The more debt you owe, the lower your credit score will be. Remember these tips: Limit your credit purchases to one or two cards, use your lowest interest rate cards, keep track of how much you spend, and charge only what you will repay within three months.
• Give low-cost or no-cost gifts. Give a homemade gift certificate for something you're good at, such as cooking, house cleaning, babysitting or home improvement work. Or give a family gift rather than individual gifts to everyone in a family, such as a family board game or a cordless phone.
• Avoid last-minute shopping. Shopping under stress can lead to poor spending choices. You might buy what's easiest or what's left, which may not be the right gift or the best price.
* Plan ahead for next year. Start saving money in a Christmas Club account in January. You'll be better prepared for the next holiday season. Consider depositing a little into the account each pay period by automatic deposit. Also, save all your coins during the year for holiday spending. It could easily add up to several hundred dollars.
Holiday overspending can diminish the joy of the season and can result in long repayment schedules. Enjoy this holiday season by having a holiday spending plan in place and avoid a holiday credit hangover in the new year.
CCOA has certified credit counselors who offer free credit counseling, free financial seminars and a debt elimination plan. For more information on CCOA, call (800) 889-4916. For more holiday spending tips and an online holiday planner, visit www.ccoacares.com.
Holiday Hints is a seasonal column written by local experts who address topics related to family finance and relationships during the holiday season. This week's columnist, Mark Foster, Is director of education for Credit Counseling of Arkansas.
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