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I'd like to curb my holiday spending this year. Can you give me tips?

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If one of your holiday traditions is a large pile of leftover debt, you may want to re-think your holiday spending this year. With stores opening earlier, staying open later and offering discounts and money-saving coupons, many people think more about how much they’re saving than how much they’re spending.

Overspending is an addiction as difficult to kick as drug dependency. Many use money to meet emotional needs. If overspending is a problem for you, think about what needs you are attempting to satisfy through spending.

Remember last January when the holiday bills arrived and you vowed that next year would be different? A bit of clear thinking can leave you with a bigger bundle of cash and more holiday cheer this year. Consider these tips:

If the budget is tight this year, be upbeat but up front with your family. They’ll likely understand the circumstances. This could be the year you inspire them to more charitable endeavors such as supporting “Sub for Santa” or helping in a food pantry. Financial counselors advise us to give ourselves plenty of time to shop, make a list and check it twice, pay with cash and stay away from impulse shopping. Determine how much you can afford to spend this season and divide it among those on your list. If you can adopt one financial concept, it should be this — if you can’t afford to pay with cash, you can’t afford it. Paying with cash on hand is a simple way to avoid new debts and new stress. If you must use credit cards, debt counselors recommend carrying two cards — one with a zero balance that you can quickly pay off in full and another with low interest for purchases you can pay off within a month or two. Do not take other tempting cards with you. Unfortunately, credit cards can give a false sense of financial security when you use them without any concept of how much you are spending. Record charges in your check register and subtract them from your available balance as you spend. Not only will you get a good idea of how much you have spent, you’ll also know how much money to set aside for the bill when it arrives.

Plan for next year. Keep track of how much you spend on the holidays this year, including extra meals in restaurants, decorations, travel, holiday entertainment, long-distance phone calls, Christmas trees, cards and postage, neighborhood gifts, etc. Divide the total amount by 12. That is the amount you will need to set aside in savings each month during 2005 so you won’t have to go into debt for the holidays a year from now. Many banks and credit unions will work with customers to find a plan that allows them to have extra cash during the holidays. Funds can be transferred from checking to savings each month. You’ll also earn interest on it as it builds up over the year.

Utah State’s Family Life Center can help you set up spending and debt repayment plans. It also offers tips and skills for money management. This service is free. Contact the Family Life Center toll-free at 866-519-7881. The holidays become burdens when they bring money problems through the rest of the year. Financial security is the best year-round gift you can give yourself.

Posted on 4 Nov 2004

Adrie Roberts
County Director, Family & Consumer Science Agent, Cache County

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