Holiday Spending During Tough Times
It’s a fact, as consumers, we spend more money in the three months before New Year's than at any other time of the year. Retailers often make about half of their annual profit during this time, according to the National Retail Merchants' Association. If you are like most of us, much of the buying will be done on credit, and sometimes it’s easy during the holidays to spend more than usual. So to help keep your cheer intact before and after the holidays, we've compiled a few tips on being generous without inviting disaster.
Cut Your Gift List. The easiest way to reduce how much you spend during the holidays is to exchange gifts with fewer people than you have in the past. Be honest: Aren't there a few people on your list that you question year after year? Make this the year you put an end to it. You might even talk to those people in advance and agree that, in the name of saving money and reducing stress, you won't exchange gifts but will get together to do something you both enjoy.
Find Alternatives to Purchased Gifts. Maybe stopping cold turkey on a gift-exchange with certain people doesn't feel right. A suggestion might be to try being creative with alternatives: homemade treats, a coupon for your services such as babysitting, pre-addressed and stamped envelopes so an older person can easily keep in touch, or a family photo are all thoughtful gifts sure to be appreciated.
Make a Budget, and Stick to it. You have heard this one a thousand times! Once you've figured out who you want to buy gifts for, you will do yourself a huge favor by determining your overall budget and having a general idea of how much you want -- and can afford -- to spend for each person. Remember you must stick to it. This takes discipline.
Look for Gifts that are also Good Buys. Learn about the features and options available on a particular product, especially expensive items such as cameras, video equipment, sporting goods, stereos, and computers. Get specific product numbers before you shop around so you're not comparing apples to oranges. Studies have shown major price variations -- often 50% or more -- for identical products, especially audio-video and computer equipment.
Avoid Buying Unnecessary Warranties. Many consumer products come with warranties, especially audio-video equipment and appliances. Resist the offers to buy an extended warranty or service contract for most products. Consumer Reports, however, does suggest that you consider extended warranties for laptops and some types of TVs: LCD, plasma flat panels, and some rear-projection TVs.
Keep Records of all Your Purchases. To make sure you stay on track, won't be surprised by gigantic credit card bills keep all your sales receipts. Review the receipts every few days to monitor your progress.
Try to Always Pay More Than the Minimum. Once you've spent the money and the bills arrive, you can still make your holiday dollars go further by paying your bills as quickly as possible. Credit cards require a minimum payment each month and if you only pay the minimum, you'll be burdened by this year's holiday purchases for years! The best way to avoid these charges is to pay by cash, check, or debit card, not credit card. Admittedly, that's not always possible. The next best thing is to pay off your entire credit card bill when it comes or try to always pay more than the minimum.
If you need help managing finances or debt, call the LIFELINE program at 1-800-284-7575. The staff of financial advisors can provide assistance with home mortgage questions, suggestions on getting out of debt, help with creating a workable home budget and more.
Please Be Safe: Grab-A-Cab and We’ll Pay the Fare
We all know that it is dangerous, and illegal, to drink and drive. Your safety is important not only to us but, more importantly, to your loved ones. Therefore, as the holidays approach, we felt it timely to remind you about the Grab-A-Cab program offered by our LIFELINE Program. It’s simple and confidential.
If you are ever in a position where you have had too much to drink, please designate a driver or take a cab home. We are not encouraging anyone to drink, however, we realize that sometimes people can get into unanticipated situations and should not drive. If you take a cab, get a receipt, and send it to Alternatives, 3100 Broadway, Suite 313, Kansas City, MO 64111. Alternatives will reimburse you for the fare. Please call 1-800-284-7575 if you have any questions.
Please, one request per six months, maximum $45 each.