Holidays
Making List, Checking It Twice
Wednesday, November 01, 2006
Dave Burge
El Paso Times
U.S. consumers are expected to spend $457.4 billion on Christmas, Hanukkah and Kwanzaa this year, up 5 percent from 2005, according to the National Retail Federation.
Planning ahead, creating a budget and doing some comparison shopping are simple ways to avoid the temptation to overspend this winter, experts say.
Your holiday budget should include who you plan to buy gifts for and how much you plan to spend on each person.
Although the winter holidays are still two months away, now is the perfect time to create a holiday budget, said Howard Dvorkin, founder of nonprofit Consolidated Credit Counseling Services Inc. and author of "Credit Hell: How To Dig Out Of Debt."
"Plan ahead and plan early," Dvorkin said.
Kern Place resident Julie Griffith, 28, and husband, Joe, use an Excel spreadsheet to keep track of family members, friends and co-workers that they buy gifts for, how much they spent last year on each person and what they gave to each individual.
The idea is to have a spending plan and avoid impulse buying, Julie Griffith said.
"If I'm feeling pressured or stressed, I'll spend more than if I thought it out ahead of time," she said.
Griffith also said she started jotting down potential gift ideas in March in an effort to plan ahead.
Having a spending plan in place can help you avoid running up your credit cards and keep you from doing long-term harm to your finances, experts say.
"Ten months of hard work can go out the window with poor planning and by overspending during the holidays," said Greg McBride, a senior financial analyst with Bank rate.com.
Rocio Castruita, education director for the El Paso YWCA's Consumer Credit Counseling Service, recommends making an "early New Year's resolution not to go into debt again this Christmas."
"Think back about last year and the stress you went through," she said. "You're probably still paying off debts from previous Christmases. Ask yourself, 'Do I want to go through that again this year?'"
Jerry Love, an Abilene certified public accountant and chairman of the Texas Society of CPAs, says consumers tend to overspend during the holidays and think about the consequences later.
"The holidays end up being a time of year when we overeat and gain a few pounds," Love said. "The same thing happens to our credit cards. Between making trips and buying gifts, we overindulge with our credit cards and get a big bill in January."
About 65 percent of U.S. consumers carry a balance on their credit cards from month to month, Dvorkin said. The goal is to avoid going further in debt this holiday season, he said.
Some holiday survival tips:
- Create a comprehensive list of each person you plan to give a gift to, how much you plan to spend and what type of gift you plan to buy for each person.
"And stick to it," Dvorkin said.
- Take a look at what you spent last year. Look at your checkbook and credit-card statements from last year.
This can give you a ballpark figure of how much you spent last year, Love said. Ask yourself, was it reasonable or did you go over your budget and put yourself in debt, Love added.
Make sure you include the cost of holiday travel, any parties or dinners you plan to host and decorations you plan to buy, experts say.
- Try to pay cash for holiday gifts. If you can't do that, only charge what you can afford to pay back within a month or two, experts say.
"If you can't do that, you shouldn't be buying all this stuff, and you need to cut back," Dvorkin said.
- Start shopping now. This gives you time to find bargains and sales. Also, do some comparison shopping. The Internet is especially useful for researching big-ticket items, Dvorkin said.
"You'll get a better selection and better prices instead of waiting until" the last minute, McBride said.
Men are particularly prone to procrastinating during the holidays, Love said.
"Men will get in a hurry, panic and spend a lot of money to overcome the panic and guilt," Love said. "I think this is true more for men than for women."
- Get creative with your gift-giving.
For senior citizens on your list, you might pay for a maid or a gardener to help with their household chores, Love said.
You also might consider giving seniors a gift card for a store where they can buy groceries or other necessities, he added.
"Many seniors are on fixed incomes, and basic items are often more appreciated than something you can wrap up," Love said.
For young married couples with children, offer to baby-sit so they can enjoy a night out, he added.
