Holidays
For joyful holiday season, it's best to avoid overspending stress
By Janet Bigham BernstelBusiness Correspondent
December 8, 2003
The holidays can be a joyous time for giving, or a stressful time of mounting debt, depending on your financial choices.
Unrelenting advertising, as well as persistent young family members, can undo the best of intentions.
"Every year people say they intend to spend less," said Howard Dvorkin, CPA and president of Consolidated Credit Counseling Services, referring to the Fort Lauderdale firm's nationwide survey on American buying habits.
"Then they get into the stores, hear the Christmas music, and forget."
Before you hit the stores, it's important to know what you're spending your money on, and how long it takes to get out of debt. If you're like 54 percent of the people surveyed, you may still be paying off debt from last year's festivities.
"They get a $3,000 home entertainment system on credit, make the minimum payments and get tagged with an 18-20 percent interest rate," explained Dvorkin. "By the time it's paid for, they've spent $8,000 and it took several years."
Although most of us are feeling better about the economy, try not to get overconfident about your financial outlook, warned Dvorkin. It's too easy to bend to the pressure of buying expensive gifts that will take months to pay off.
Here are a few tips offered by the Consolidated Credit Counseling Services at www.consolidatedcredit.org to avoid holiday spending hangovers:
Pay with cash -- People spend up to 30 percent more when paying with a credit card, mainly because there's no emotional attachment to plastic like there is to cold hard cash. Spend only money you already have.
Make a budget and a list -- Decide on the amount you want to spend and carry that amount of money with you. Know what you want to buy, and for whom, before you go shopping.
Keep track of how much you have spent on everything -- gifts, dining and entertainment. Stay away from fads and trends if possible, because there's such a high price tag.
Take just one card -- If you decide to use your credit card, choose one with a low interest rate. Carry only one credit card so you can keep track of your holiday spending. Pay it off early to avoid finance charges.
Shop alone -- Christmas shopping with a friend sounds like fun, but they can influence you to overspend. If you must, then have lunch or dinner first, as shopping on an empty stomach is also known to cause overspending. Plus, try to leave the kids at home -- they'll tug at your purse strings until you give in.
Don't let holiday debt get in the way of your seasonal fun and financial freedom -- stick to your spending plan.
