Sunday, November 16, 2008 8:05 PM CST
Set limits and get creative this shopping season
Gift-giving doesn't have to break the budget
By DAWN SCHABBING, Features Writer
dschabbing@jg-tc.com
Consumer experts say families can have a “debt free” holiday season — with some careful planning, sprinkled with some creativity.
Even if you are just starting to think about shopping for Christmas, don’t fret.
“It’s never too late to start thinking about Christmas budgeting. What works best is to start on Dec. 26, for the next Christmas,” said Linda Simpson, professor of consumer studies in the school of family and consumer sciences at Eastern Illinois University.
Planning for this season shouldn’t be any different in the consumer world. It’s all about not spending more than your income allows.
“Stay within a budget. The only way (to have a debt-free Christmas) is to not spend more than you make,” Simpson said.
Simpson offered some tips to stretch the dollar and keep from going deep into debt for holiday shopping:
n Start shopping the day after Christmas for the next year, seeking out the best sales. This includes buying leftover wrapping paper, bows and Christmas cards.
n Postpone this year’s Christmas gift giving until after Christmas sales come.
n Draw names for gift sharing, rather than buying for everyone in the family.
n Shop smart by shopping during
holiday sales.
n Put small gifts in larger boxes or turn it into a scavenger hunt.
n Offer time and talent as gifts, instead of buying gifts.
n Use cash whenever possible, as people tend to spend more when using credit cards.
n Open a Christmas Club savings account each year, so there is money to shop with come Christmas time. Saving $10 each week in this account from January through October allows the account holder to accrue about $420.
n Remember that a child’s “wish list” is just that. Don’t feel obligated to buy everything a child requests.
Simpson said folks who might have issues with overspending should always use cash, because it is easier to gauge what you are spending as you see the money leave your hand.
“If you aren’t one who is able to control your spending, it is generally safer to use cash, rather than plastic,” Simpson said.
Also, using cash more often than credit prevents what those in the consumer education world call “holiday hangover.”
“Come January, when (consumers) get the bills, and often they had forgotten how much had been spent — this gets them into financial strains. We call this ‘holiday hangover’ because they aren’t able to pay it off very easily,” she said.
It all depends on how tight one’s budget is. That’s why planning for big expenses, such as holiday shopping, is important.
“Start early planning to take out so much money every month. Work it into a budget to take out a little each month, so you don’t get hit with a big balance at the end,” Simpson said. “And planning ahead puts one in a better position to pay with cash.”
One method to help get families through the difficult financial times of holiday shopping is the “envelope method.”
This helps keep control of spending by setting a limit of how much to spend for each person.
“The envelope method is the simplest method. Put ‘x’ amount in each envelope and the person’s name on the front,” Simpson said.
Basically, using the envelope method teaches shoppers that once the money runs out, consider the shopping for that person completed. And it encourages the consumer to stretch that amount of money even farther.
“You can still get some nice gifts by savvy shopping. If you save $10 on a shirt, save that money.”
Pat Hildebrand, a University of Illinois Extension educator in consumer and family economics in Effingham, said sticking to a budget is key.
“Nearly one-third of adults say they spend more than they plan on holiday gifts,” wrote Hildebrand in a recent Facts for Families column. “Most overspend by $100 to $500. Many families find it hard to pay off an extra $500 after the holidays.”
Hildebrand echoed tips similar to Simpson’s:
n Know how much you can afford to spend for gifts, decorations, holiday meals and travel.
n Leave credit cards at home when you shop and use only cash.
n If you do use a credit card, use only one in order to better control spending.
Simpson warned consumers to pay attention when shopping for stocking stuffers and ingredients for baked goods. Often, significant amounts of cash go into these items.
Also, don’t forget to take into account the costs of wrapping paper, meals out and fuel for the shopping trip.
Planning is the key to coming out of the shopping season debt free, experts said.
Contact Dawn Schabbing at dschabbing@jg-tc.com or 238-6864.
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Sharpshopper wrote on Nov 17, 2008 11:52 AM: