Overly enthusiastic holiday spending can push a family into financial difficulty, according to LSU AgCenter family economics professor Dr. Jeanette Tucker.
"The challenge of managing holiday spending is to enjoy the spirit of the season without paying for it months or even years later," Tucker says, adding, "Realistic holiday expectations and wise management of your time, money, energy, talent and skills can help you have a happy holiday and avoid overspending."
The family economist offers a number of suggestions to help you plan, use your resources and avoid overspending.
1. 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 minute or spending haphazardly without limits lead to overspending.
2. Spread costs throughout the year. Don’t let holidays and other celebrations interfere with your ability to make ends meet. Set 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.
3. Plan your 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, and weddings and office gifts.
4. 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.
5. Practice wise consumer strategies: shop early; compare price, quality and warranties; read labels and hangtags; watch for sales. Plan shopping strategy by making a list, checking ads and going to stores near one another to help you save time and energy.
6. Remember, 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.
7. Look for ways to prune your greeting card list. Cards and postage add up quickly. Consider sending cards only to out-of-town family and friends whom you are not likely to see over the holidays.
8. If entertaining, 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.
9. If traveling, shop early for best airfares. Visiting family and friends can be expensive. When estimating travel expenses, include gasoline and car maintenance if driving and airfare if flying, as well as meals and lodging.
10. Consider different ways of making charitable donations for the less fortunate. Some families donate money to selected charities on behalf of other family members rather than buying gifts for one another. Although a contribution of money is always appreciated, a donation of time also is 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. She advises sticking to the plan, so your holidays are a time for living, laughing, loving, sharing, caring and learning. After all, she says these are the things that money can’t buy, but they make a precious, full and abundant life.
For information on related family and consumer topics, visit the FCS Web site at http://www.lsuagcenter.com/
Inst/Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.