Holidays
CONSUMERS BRACE FOR HOLIDAY COSTS Budget, save, don't use credit cards, experts recommend
Even with Christmas three months away, it's still tempting to overspend and bust your budget this time of year, experts say.
If you have children, you just got through back-to-school shopping. Next up are Halloween and Thanksgiving, followed by the winter holidays.
"I think you solved the big mystery of why Americans are in debt," said Howard Dvorkin, founder of Consolidated Credit Counseling Services Inc. and author of "Credit Hell: How To Dig Out of Debt."
"People don't get a reprieve," Dvorkin said. "You spend from January to August paying off what happened in the last four months of the year, and it's very tough on your household budget."
To survive with your finances intact, make a budget, establish a savings program and put away those credit cards, experts advise.
South-Central resident Alicia Samaniego, who has two children, is a "big believer" in saving and planning ahead.
The idea is to avoid charging up her credit card, she said.
"I only use it for emergencies," she said.
Through El Paso Employees Federal Credit Union, she uses a special vacation savings account to finance back-to-school expenses and a Christmas club account for the holidays.
"I've learned to budget myself," Samaniego said. "Every month, some money goes into my vacation account and some goes into my Christmas account."
These accounts help give her a disciplined framework in which to save, she said.
Jerry Love of Abilene, a certified public accountant and chairman of the Texas Society of CPAs, says many people live paycheck to paycheck and have a hard time planning ahead.
"They feel they're (between) a rock and a hard place and feel they have no option but to charge back-to-school expenses, holiday expenses and other things," he said.
Here are some tips:
· Create a realistic budget, especially for the coming holiday season.
"Now is the perfect time to do a holiday budget," Dvorkin said. "The pressure is not on, and you're not being brainwashed by the massive onslaught of advertising, saying, 'Spend, spend, spend.'"
"Make a list of whom you need to buy presents for, what you're going to give and how much you're planning to spend," Dvorkin said.
Also include expenditures for hosting a holiday party, new clothes and thank-you cards, Dvorkin said.
Dvorkin's organization has a free downloadable "Holiday Survival Guide" on its Web site, www.consolidatedcredit.org.
You can trim costs by making homemade gifts, having friends and family over for dinner instead of exchanging presents or offering to baby-sit someone's children, Love said.
· Look at last year's receipts and credit-card statements as a "barometer" of how much you'll spend this year on the winter holidays, said Greg McBride, senior financial analyst with Bankrate.com.
Start saving money every paycheck to reach that goal, he added.
"The best time to start is at the beginning of the year, but it's never too late to start putting money aside," McBride said.
Start shopping now, instead of waiting until the last minute, Dvorkin added. Watch for sales and do some research on the Internet, especially for big-ticket items.
· Establish a regular savings program, said Maureen Hankins, director of the El Paso YWCA's Consumer Credit Counseling Service.
"That's the only way to get out of debt and stay out of debt," she said.
Hankins recommends a three-pronged savings program: an emergency savings account to cover unexpected expenses; long-term savings for retirement and your children's college education; and short-term savings for Christmas, back-to-school shopping and other events that can be planned.
Put your emergency and short-term savings into different accounts to avoid commingling funds, Hankins advises.
