Thursday, November 22, 2001

With the Christmas shopping season here, it’s a good time to look at ways to make your relatives and friends happy without busting your budget.
This year, many Americans aren’t quite sure what’s an appropriate way to celebrate the holidays given the September 11 attacks on the World Trade Center, anthrax scares and the fighting in Afghanistan. The weak economy also has taken a major toll on jobs, reducing the spending power of many families.
An annual survey conducted by the Consumer Federation of America and the Credit Union National Association found that more people plan to cut Christmas spending or hold it level with what they spent last year.
“There’s a great deal of uncertainty out there,” said David Heim, managing editor of Consumer Reports magazine. “A lot of people aren’t sure how to behave. They’re essentially asking, “Is it OK to have a good time?”
He added that the weak economy means “there are deals out there” at retail stores if consumers take the time to comparison shop for gifts.
“But it’s also a time to remember that the holidays aren’t just about going out and clearing the shelves at the department stores,” Mr. Heim said.
Some people have taken that approach for years and had a frugal, yet meaningful, Christmas season.
Anne Stinson, a nature writer in Easton, Md., who does her shopping by catalog, said she asks her children what her grandchildren want.
Then, “I try to order things for their special interests or hobbies. When you get them something they really want, it’s appreciated and put to good use.”
Mrs. Stinson’s special holiday gifts are homemade date-and-nut cakes she bakes from an old family recipe.
“There’s one for each of my three sisters, one of each of the four children’s households, one for the man who brings fresh corn in the summer and for the man who volunteers to clear the pine needles out of my gutters,” she said. “I like to make them, and they seem to like to eat them.”
For people who want to be sure they don’t spend more than they can afford, financial advisers have suggestions that apply whether you shop by catalog, on the Internet or by mall:
“I believe firmly in Santa’s rule: Make a list and check it twice,” said Steve Rhode, president of, a credit-counseling service in Rockville. “People who overspend often do it because they don’t plan.”
Mr. Rhode also suggests that the Internet is a good place for price-conscious shoppers this year “because it’s easy to compare prices, and there are fewer temptations than at the mall.”
He has some special caveats for online shoppers:
Don’t necessarily select the cheapest shipping method, especially if you aren’t shopping early. Choose one that allows you to trace the goods, such as express mail, Federal Express or UPS.
Try to make as many purchases together at a single site to reduce shipping costs.
Give preference to merchants that have both online operations and brick-and-mortar stores. It can make returns easier.
And, no matter how you shop, be careful with your credit cards. There are positives and negatives to using them for holiday purchases.
Mr. Heim of Consumer Reports says credit cards are safer than debit cards for online and catalog purchases.
“A credit card gives you some protection if there’s a problem with the transaction,” Mr. Heim said.
“With a debit card, the money is taken right out of your account and it’s hard to get it back if you’re not satisfied. With the credit card, you can refuse to pay until the situation is fixed.”
On the other hand, many consumers don’t consider the real cost of credit when they pull their cards out for Christmas shopping, said Jennifer Ridley Hanson, director of financial planning for Financial Finesse of San Francisco.
A shopper who charges $1,800 this holiday season on a card with a 14 percent interest rate and pays just the minimum of $45 a month will take nearly 14 years to clear the bill and pay $1,367 in interest.
“In a perfect world, you should have money in your savings account or money market account so you can pay cash,” Miss Hanson said. “If you have to use credit, you should try to pay it off as fast as possible.”

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