- The Washington Times - Tuesday, November 2, 2004

Q: With rising fuel prices and worries about my job, I need to keep to a budget for the holiday shopping season. What tips can you offer so I don’t run up a lot of credit-card debt?

A: It’s definitely easy to overspend on gifts during the holiday season because it’s such an emotional time. According to America’s Research Group, a Charleston, S.C.-based consumer behavior strategic research company, 38 percent of consumers polled said they usually spend more at holiday time than they planned.

“There is tremendous amount of hype associated with holiday gift giving,” said Jack Gillis, director of public affairs for the Washington, D.C.-based Consumer Federation of America. “Unfortunately, we sometimes become victims of letting the amount of money we spend on a gift be a measure of how much we value the recipient. It’s the thought that counts and not the value of the gift, so by spending some extra time with thoughtful planning, you can save yourself from financial heartache in January.”

Financial experts say consumers must develop financial self-discipline when shopping for the holidays to avoid going into debt. Here are some tips to make the process easier:

• Shop early because last-minute shopping — while offering the benefit of some bargains — presents a greater chance of poorly thought-out choices, according to Mr. Gillis.

• In creating a holiday shopping list, specify the price range you want to spend for each family member and friend, and the gift you want to buy. And stick to that range.

• Be creative to save money. Bake cookies or cake for your neighbors instead of buying gifts. Offer to babysit your relatives’ children, or make picture collages.

“If people are creative enough and plan, then they can have a wonderful Christmas,” said Paul Richard, executive director of the Institute of Consumer Financial Education in San Diego.

• Try to pay for your gifts in cash. Ideally, you don’t want to charge any more on your credit card than you can pay off in 90 days, according to Mr. Richard.

• Do research online before purchasing, whether you are shopping in stores or on the Internet. Use price-comparison sites like mysimon.com or shopping.com to check out price, quality, and shipping fees. At shopping.com, consumers can input their zip codes, and the site will calculate shipping fees and tax for each item. Consumerreports.org, the online arm of Consumer Reports, offers a free guide to how to shop for products, from digital cameras to MP3 players, and tell you how much you can expect to spend.

• When shopping online, be sure to order at least two weeks before Dec. 25; otherwise, you likely will pay extra shipping fees.

• Consider gift cards, which are easy to buy and make it easy to stick to a dollar amount. At the same time, experts warn that consumers need to find out about any fees before purchasing. Bank-issued cards often have an initial sales charge, and many retailers charge shipping and handling fees for cards bought online. Consumers should also find out whether these cards can be replaced if they are stolen or lost.

• Keep a record of your expenses. If you are comfortable with what you spent, then you can start saving for next year by putting away one-twelfth of that total amount per month, according to Mr. Gillis.

ASSOCIATED PRESS

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