Jeanette A. Tucker, Bogren, Richard C. | 12/9/2006 3:43:11 AM
Overly enthusiastic holiday spending can push a family into financial difficulty. The challenge of managing holiday spending is to enjoy the spirit of the season without paying for it months or even years later, says LSU AgCenter family economist Dr. Jeanette Tucker.
"Realistic holiday expectations and wise management of your time, money, energy, talent and skills can help you have a happy holiday and avoid overspending," Tucker says.
Tucker offers these suggestions to help you plan, use your resources and avoid overspending.
-- Look at the big picture. The amount you spend may vary depending on family values; however, it is unwise to spend more than 10 percent of your yearly income for holiday expenses. Spending at the last minutes – or spending haphazardly without limits – leads to overspending.
-- Spread costs throughout the year. Keep holidays and other celebrations from interfering with your ability to make ends meet by setting aside an equal amount each month. For example, if you estimate that you spend $1,200 per year for holiday and other celebrations, set aside $100 each month. "Take out what you need for various celebrations as needed, leaving the bulk of the money for December when you might spend more," Tucker says.
-- Plan holiday spending. Once you know how much you can spend, decide how the money will be used. Start by making a list of the holidays and special occasions you plan to celebrate. Determine how much money you wish to spend for each special occasion. Don’t forget to set aside money for unforeseen occasions such as baby showers, weddings and office gifts.
-- If you use credit cards for holiday shopping, charge only the amount that you can safely repay in a few months. If you have multiple credit cards, limit your charges to one card. This will help facilitate bill paying and provide a clear picture of your spending. Evaluate your overall credit picture before shopping for the holidays. Avoid cards with higher annual percentage rates and annual fees. It’s more cost effective to use cards with lower rates and no annual fees.
-- Shop early for gifts. Practice wise consumer strategies and comparison shop. Compare price, quality and warranties. Read labels and hangtags. Watch for sales. Plan shopping by making a list, checking ads and shopping at stores that are near one another to help you save time and energy.
-- The best gifts don’t always have the biggest price tag. They are fun or useful and chosen with the recipient in mind. Consider using your talents and skills to create low-cost gifts. A gift of time is the most precious gift.
-- Expenses for greeting cards and postage add up quickly. Look for ways to prune your list. Consider sending cards to only out-of-town family and friends you’re not likely to see on the holiday.
-- Social gatherings highlight holiday seasons as calendars fill with parties and activities. Consider co-hosting an event with another family member, friend or co-worker to consolidate time, effort and expense. For special events, evaluate the necessity of a meal. Consider appetizers or snacks instead. Also consider a potluck dinner as opposed to a lavish buffet.
-- Visiting family and friends can be an expensive part of holiday plans. Shop early for best airfares. When estimating travel expense, include gasoline and car maintenance when driving and airfare when flying, as well as meals and lodging.
-- Remembering the less fortunate is an important part of many holidays. Some families donate money to selected charities on behalf of other family members rather than buying gifts for one another. While a contribution of money is always appreciated, a donation of time is also valuable.
"A realistic and affordable plan for spending your money and your time should always be at the center of your holiday plans," Tucker says. Develop a plan and carry it out. Make your holidays a time for living, laughing, loving, sharing, caring and learning. These are the things that money can’t buy, but they make a precious, full, and abundant life."