Jeanette A. Tucker, Claesgens, Mark A. | 12/13/2006 1:32:52 AM
Every year thousands of Americans go into debt over the holidays because Santa and his elves went a little over budget. With holiday shopping, rising gas prices and hosting holiday parties, it is no wonder we have trouble staying out of debt.
Dr. Jeanette Tucker, LSU AgCenter family economist, says it is easy to go over budget, because most people forget to include many expenses. The main way to avoid overspending is to plan ahead. Planning ahead also can keep you from making expensive impulse purchases.
This also is a good time of year to teach children about money management, because it is never too soon to begin teaching youth how to make and stick to a budget.
The family economist suggests shopping on major sale days to save money, even if it means having to fight crowds. On the other hand, consider using the Internet, because it is easier to bargain shop, and you save on gas.
This time of year often includes a lot of eating out, and not just at parties. In the hustle and bustle of shopping, it is common for people to eat while they are out, or to get home and decide to go out rather than using their remaining energy to cook at home. This expense, however, is often forgotten from the planned budget.
It is also common to forget to add in the babysitting expenses related to holiday outings. Winter car maintenance is another item typically left out of the planned budget. These costs should certainly be taken into account along with all other expenses.
To cut down on decoration, food and beverage costs when entertaining, Tucker suggests having a potluck to which everyone can bring a favorite decorative item, dish or drink. A potluck allows people help you bear the burden of the entertainment bill, while it provides them the opportunity to have a special recipe or centerpiece to show off at your gathering.
Some family traditions can be costly. Try to eliminate a few that have less special meaning.
One with much meaning, however, is gift giving, which is usually the most expensive tradition. Because gifts often can have more of an emotional tie or guilt factor attached, Tucker says they are typically the most difficult items on which to cut back.
But if gifts cannot be slimmed down, it is likely that you will end up with an "unwanted present in January" in the form of credit card bills.
Tucker recommends that if you know you will not be able to pay off these "plastic holiday cards," switch ahead of time to a card with a lower interest rate.
There are many ways to cut down on holiday gift lists. If you start ahead of time by telling people you are trying to save money this holiday season, they may be more forgiving for not receiving a gift from you. The family economist also suggests trying creative gift ideas, such as homemade presents like a recipe box of typed recipes or a scrapbook of memories.
Drawing names among family members or coworkers often can help you cut down on the number of people for whom you must buy gifts.
Another creative idea is to create a memory together as a group or family instead of exchanging gifts. Do something fun together, such as taking the family to the theater or going on a short vacation.
If you do use holiday time for a winter vacation while the kids are out of school, remember to factor these extra costs into the holiday budget, since the bills add up quickly.
Arranging to exchange gifts after the holidays is another good way to cut down on the budget. Many major sales take place just after the holidays, and these sales can be a great time to go shopping either for next year's gifts or for a family gathering near the New Year.
Gifts that can be enjoyed by the whole family also cut down on the number of presents. For example, a family with several children might buy a DVD player or stereo system that everyone can enjoy, rather than buying multiple gifts for each individual. Although this can be a costly gift up front, it may end up much cheaper than buying smaller presents for everyone.
Giving a charitable contribution in someone else's name is a way to take care of two obligations at once, because it gives a gift to a loved one, while still giving to the charity.