Tobie Blanchard, Tucker, Jeanette A. | 12/8/2009 1:35:36 AM
News Release Distributed 12/07/09
Walking in a winter wonderland abundant with holiday sights, sounds and smells can seduce shoppers to spend dangerously.
LSU AgCenter family economist Dr. Jeanette Tucker says many consumers fall into the spending trap and find themselves still paying for Christmas purchases six to 12 months later. She offers these 10 tips to maximize your holiday spending power and keep your bank balance in the black:
1. Make a spending plan.
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.
“Determine how much you can realistically spend on all of your holiday purchases,” Tucker says. “Then, make a list of everything you need to buy – gifts, food, decorations, travel, entertainment, cards and postagepostage – and tally the costs.”
Compare and adjust your spending plan so you can spend within your means.
2. Know your limits.
Make a list of gift recipients and decide how much you can spend for each. If your dollars won’t stretch to the end of your list, Tucker says you have two options: “Trim gift allocations or prioritize for whom you really want to buy gifts.”
You may need to let some friends or family members know you won’t be exchanging gifts this year.
3. Track your spending.
“Your spending plan will only help you if you track all of your purchases to make certain that you are staying within your budget,” Tucker says.
Write down all of your holiday purchases, including gifts, food, clothing, cards, postage, wrapping paper and decorations. Expenses add up quickly and can get out of control if not carefully monitored. Consider stashing your receipts in an envelope so they are easily accessible if you need them for future returns. List the amount you spent on the outside of the envelope.
4. Shop with a list.
“Santa makes a list, so should you,” Tucker says. Know what you want to buy. Then you can zip through stores, find what you need and get out quickly. When you have finished shopping – STOP shopping to avoid impulse purchases.
5. Shop early.
Don’t wait until the last minute to shop. Shopping early will allow you time to compare prices and find the best deals. Last-minute shoppers are likely to spend more money.
6. Be an informed consumer.
Comparison shopping will stretch your holiday funds. Resist the urge to grab the first thing you see.
“Take time to find the best deal before hitting the stores by scouting catalogs, advertisements and the internet,” Tucker says. “Santa checks his list twice – follow his lead by thinking twice before buying.”
7. Choose cash.
Leave your credit cards at home. Spending cash will force you to budget and reduce overspending. Research shows that people spend up to a third more when paying with credit instead of cash.
“Cash carries a greater emotional attachment than plastic,” Tucker explains. “It is harder to hand over at the cash register.”
8. Use caution with credit.
If you must use credit, shop with no more than two cards – preferably low-interest cards that are accepted at a wide variety of vendors. Department store cards typically carry a much higher annual percentage rate.
“The more cards you use, the harder it is to track spending,” Tucker says. “Consider using one with a zero balance for purchases that you will be able to pay off in full. Use a low-interest card for purchases that will be paid off over the next few months.”
9. Resist the hype.
Retailers work hard to entice you to shop and buy with abandon.
“It’s easy to spend more than you planned, so resist their sales pitches,” Tucker warns. She also advises consumers to steer clear of credit card offers that encourage you to skip a payment. She says you’ll pay more interest in the long run.
Avoid the “buy now and pay later” offers that encourage you to spend money you don’t have. Shun department store offers to sign up for a credit card to get a one-time discount.
10. 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 you spend $1,200 per year for holidays 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.
“Downsize holiday spending to increase your joy at holiday time and in the coming months,” Tucker says. She suggests limiting the size of your Christmas spending and making it big on meaning for family and friends with traditions and memories.Tobie Blanchard