Holidays
Tips for stretching your holiday dudget
BankRate Monitor
Dec. 7 , 2004 - Savvy shoppers
are expected to do comparison shopping online this year. And according to a recent
study from JupiterResearch, there are a lot of smart shoppers out there. If the
study is correct, online retail holiday sales this year will reach $21.6 billion.
A rising number of Americans -- 86 million to be exact -- are expected to make holiday
purchases on the Web this year compared to 73 million last year.
"Consumers use the Internet to get inspiration as
well as to find good prices at the holidays," said JupiterResearch retail analyst
Patti Freeman Evans. "Over half of online holiday shoppers say they will use the
Web to get gift ideas or to seek better prices," she said.
Hopefully, those shoppers will comparison shop for
better prices -- instead of spending too much by clicking "Charge my card" without
thinking through their purchases.
Holiday temptations
The holiday season is an all-out assault on your
senses. The music,
decorations, lights and the delicious seasonal smells assail
your sensibilities on every street and in every store. The pace is frantic, the
mood is manic, and the atmosphere is, well, different.
The holidays are so set apart from the norm that
people are tempted to break out of their norm -- for just the season. "It's seduction,"
says Ruth Hayden, a financial educator and author of "For Richer, Not Poorer: The
Money Book for Couples." "Consumers are seduced into buying. To be seduced means
that you're crossing boundaries that you've set. You're tempted to buy because you
want to belong. You're tempted to buy because you want to create love."
And that's where it gets dangerous -- financially
speaking. We convince ourselves that breaking from our budget and using our credit
cards a little more freely just this one time is all right. Come January, we'll
get caught up and back on track.
"Unfortunately, too many consumers are paying for
Christmas purchases beyond six months, a year, two years and even longer," says
Howard Dvorkin, CPA and founder of Consolidated Credit Counseling Services, Inc.,
(CCCS) in Fort Lauderdale, Fla.
Let family traditions decide your spending
"Most of us cannot remember gifts we received last
year, let alone as a child," says Dvorkin. "It's the family traditions and memories
that really stand out."
When deciding what to buy and what to do, first
consider your family's favorite traditions and holiday memories. What truly brings
a smile to your face? What is the one thing you'd most like to do this holiday?
Is there something new you'd like to try?
"If you don't have the cash in your pocket, you
shouldn't be buying. You can't afford it. Next month, when the bills are coming
in, chances are you're not going to be in better shape," Dvorkin says.
How about you? Do you plan and save for the holidays?
Or do you just punt and end up paying off the holiday bills just as the fireflies
are lighting the sky in the summer?
Here are some tips to help you wrap up your holiday
spending without overspending.
Looking for a better credit card? Check rates in
your area.
1. Make a spending plan
Start with a realistic idea of how much you can spend on all your holiday purchases.
Make a list of everything you usually buy, from the gifts to food to entertainment
to travel expenses, and tally the costs.
"If you don't budget and set a specific dollar limit, then your spending grows and
grows and grows. In January you'll be horrified by how much you've spent," says
Mari Adam, a certified financial planner in Boca Raton, Fla. "And, don't get locked
into the thought that how much you spend measures how good of a person you are."
2. Know your limits
Not many can afford to shop carte blanche, so don't try! Make a list of gift recipients
and decide how much you want to spend on each person.
If you're unable to spend as much on gifts this year, prioritize for whom you really want to buy gifts. Then communicate your plans to family and friends, says Adam.
"If you tell them you won't be exchanging gifts this year, then you won't feel embarrassed
if they purchase you a gift." You want to be able to pay off your holiday expenses
within three months after the holidays, four at the most.
