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Debt Management

Credit Counseling

Holidays

How to avoid gift shopping yourself into excessive debt - Strategies from top credit counselor

Thursday November 18, 4:42 am ET

FORT LAUDERDALE, Fla., Nov. 18 -- Consumers who start their holiday shopping without a strategy will likely end up adding to their debt load. To avoid going overboard, determine your budget, communicate with family members and decide the total amount of money you have to spend for gifts. If you decide to use credit, only borrow what you can repay within 60 to 90 days.

"Many people are still paying off their credit cards from last Christmas. In the back of people's minds, they know that their stress will be worse in January when they must face the stack of bills they can't pay," says Howard Dvorkin, founder of the nonprofit organization Consolidated Credit Counseling Services.

Each year the International Mass Retail Association asks consumers what they plan to spend on holiday purchases, and most years they report consumers spend about 30 percent more than they planned.

"Many factors contribute to overspending during the holidays. Lacking a clear picture of income and expenses leads consumers to overspending. Some people think that if they spend a lot for gifts, the recipients will appreciate it more," continued Dvorkin.

The counseling agency has uncovered four shopping personalities who might be headed for financial danger at the holidays.

Impulse shoppers

"I don't like to make lists. When I find a gift, I buy it."

Shopping solution:

Spend a few minutes thinking about the gift before you buy it and ask yourself these questions: Will the person enjoy, use and appreciate the gift? Could I find this gift, or a comparable gift, for less money somewhere else?

Shop with cash and when you have spent all the money, go home.

Keep track of the presents you have already purchased.

Wait-and-see shoppers

"I go out to the stores and look around to decide what to buy persons on my gift list."

Shopping solution:

Leave your money and credit cards at home and when inspiration hits, write down the gift, where you found it and the price. When you have shopped for everyone on your list, add up the total.

Compare your shopping total with your gift budget. If they do not match, you will need to make adjustments. Try to find the item on sale, look for a similar item that is less expensive, or give a combination gift to any couples on your list.

When you go back to purchase your gifts, buy only those gifts on your list.

"I hate to shop" shoppers

"I know I have 5 gifts to buy. I go to one store and buy them as quickly as possible."

Shopping solution:

Consider shopping on the Internet. The Net will allow you to shop quickly from several different merchants, which could save you money.

Give gift certificates and everyone wins. There is no shopping involved for you, the recipient can choose his or her own gift and you will not overspend.

Last-minute shoppers

"The end of December creeps up on me and I find myself in the stores on Christmas Eve."

Shopping solution:

ime is short, but you want to avoid buying any gift that would be more money than you would normally spend just so you have a gift to give. Map out a plan before you leave home. List each person, what gift you would like to buy and in which stores you will need to shop.

Enlist help. Get one of your "I finished my shopping before Halloween" friends to come shopping with you and send them off to pick up some of the gifts on your list.