Avoiding the holiday debt blues
- By Milt x_Zall
- Nov 30, 2000
Have you started shopping for holiday gifts yet? Even though economists
expect consumers to spend less this holiday season because of rising gasoline
and other energy costs, that doesn't mean shoppers won't spend more than
During the holiday season in 1999, for example, consumers spent 27 percent
more than they had planned for holiday gifts, according to the International
Mass Retail Association. Average family spending hit $1,067, with men outspending
Sometimes, excess holiday spending is what pushes a financially troubled
family into bankruptcy. Despite a robust economy, personal bankruptcies
remain near their all-time high.
Here are some tips from Dennis Filangeri, a certified financial planner
in San Diego, on how to keep your holiday debt-free.
* Make a gift list and check it twice.
Don't spend so much that you regret it in 01/when the bills come
in. Determine how much you can afford to spend overall, and divide that
amount among the people for whom you want to buy gifts. You can build the
list by browsing through catalogs and store windows for ideas and prices — just hold off on buying anything.
* Stick to the list and avoid impulse buying.
You probably are familiar with the advice: Never go grocery shopping
without a list (or when you're hungry). The same advice applies to holiday
shopping. Sticking to a list reduces expensive impulse shopping, which is
typically what gets people into financial trouble.
* Track what you spend.
Inevitably, you'll buy some things on impulse. At least keep track on
your list what you've spent so that you can keep the overall spending within
limits. Like any budget, if you overspend in one area, try to underspend
* Shop early and take your time.
Starting early allows you time to shop for bargains and take advantage
of sales. People who do most of their shopping in the last minute don't
have time to shop for bargains and they are more apt to ignore their budget
and spend any amount out of desperation. If you shop on the Internet, check
out the possibilities — but sleep on it before you order.
* Leave the credit cards at home.
Credit card companies push cards around the holiday season especially,
with low introductory rates and other incentives. However, many financial
planners feel that credit cards often lead to excess spending during the
holidays (as well as the rest of the year). So take cash when you go holiday
shopping. You'll be less apt to overspend and you'll be spending money you
* Be creative.
A "gift certificate" to baby-sit, clean or something else special makes
for a nice personal, but inexpensive, gift. Kids especially find this technique
useful. Baked goods and homemade crafts also are appreciated gifts. A photo
of a family gathering can be a far more cherished and lasting gift than
a new tie.
* Delay some purchases.
Perhaps you and your spouse or a close relative might agree to wait
to buy some gifts for each other until after the holidays, and concentrate
instead on the kids. This reduces your immediate expenses and you can take
advantage of the post-holiday sales.
* Watch the non-gift expenses.
With the focus on gifts, it's easy to overlook the other expenses around
the holidays. These include Christmas trees, long-distance telephone calls,
travel, wrapping paper, decorating, postage, party food, drinks and entertainment.
* Talk about a tight budget.
If the budget is tight, let the family know you won't spend as much
this year and why. Most likely they'll understand. You might combine this
with making charitable gifts to less fortunate families, such as helping
out in a soup kitchen or delivering food.
* Start saving for next year.
You can alleviate much financial stress by tucking away money each month
in a holiday fund. Start in 01/and you'll have a nice little fund by
this time next year.
* Keep your perspective.
Sure, it's nice to give generously, but keep it in perspective. The
best gift you can give your family is financial stability.
Zall, Bureaucratus columnist and a retired federal employee, is a freelance
writer based in Silver Spring, Md. He specializes in taxes, investing, business
and government workplace issues. He is a certified internal auditor and
a registered investment adviser. He can be reached at firstname.lastname@example.org.