|Restrain overspending this holiday shopping season|
|Written by Dr. Garth A Rose|
|Thursday, 08 December 2011 11:53|
The holiday shopping season brings its mix of good and bad tidings. The usual surge in spending gives a strong boost to the economy. In fact, the recent fall in the national unemployment rate to 8.6 percent in November is largely due to increase in consumer spending and retailers' need to employ additional staff, a factor which will likely continue throughout December.
However, irresponsible shopping could put your own finances in trouble this season, depleting your cash reserve and putting you (and the economy) in a serious dilemma for the New Year.
Based on a survey conducted among South Florida Caribbean-Americans residents in mid-November, consumer spending will remain high this holiday season. Sixty-seven percent of those surveyed, mostly women, were saving especially for holiday shopping. The average amount saved was $2,800, ranging from a minimum of $540 to a high of $6,100. The majority planned to use savings to purchase household items (curtains, comforters, etc.), electronic equipment (TVs, music component sets, and cell phones), gifts, toys and clothing for the kids.
It is heartening to see people, despite the harsh economic climate, building saving accounts. Data also indicate consumer savings increased nationally during the year, but this could be reversed with the strong temptations provided during the holiday shopping season. A national survey stated Americans plan to spend an average of $764 this season. However, Consumer Reports found that as of October 2010, 14 million Americans were still paying off credit card charges incurred during the 2009 holiday season.
"We spend a lot during the holidays because we love giving to our friends and family," says Leslie Greenman, financial advisor and author of the book Dating Our Money: A Women's Guide to Confidence with Money & Men. "Watching someone you love open that perfect gift can be really gratifying."
But, Greenman notes this psychology of gift giving isn't good for your financial health. Guiding shoppers this holiday season, Greenman offers helpful tips to keep you in the black for the New Year.
Get real – Before writing your gift list, have a heart-to-heart with yourself about your finances. "Look at how much you can realistically spend," recommends Greenman. "Then decide whether or not you really need to spend that amount."
Don't fall back on old habits – When budgeting, remember that spending during the holidays doesn't stop with gifts. Allow yourselves a little more leeway for other unexpected costs.
Don't shop when you have the holiday blues – "Avoid shopping when you're having a down day," advises Greenman. "Studies have shown that we are willing to spend more when we are sad."
Remember, 'tis the season for relationships – It's completely human to want to give back to those who have helped you, but suggest to those on your gift list to put aside time to spend together for the holidays, rather than exchanging material things.
Establish an "Operation Holiday" plan – If you can't avoid holiday shopping this year, map out a shopping plan that follows your budget.
Set a shopping curfew – Avoid the temptation of jumping into the frenzy of holiday shopping. Setting a time limit on shopping will help you stay on budget.
Remember, it's the thought that counts – Can't find the perfect gift for someone? Don't buy it. It's the friendship you have that makes the gift meaningful, not the price tag. Don't waste time or money hunting for something that won't hold meaning past New Year's.
Make a list, check it twice, and bring cash! – Leave your credit cards at home. It's easier to track your spending when you're counting bills rather than effortlessly swiping plastic.
Point, click, and save – Shopping online lets you skip the holiday traffic and gas costs, plus makes it easier to compare prices.
Don't be afraid to re-gift – Explore your home for re-gifting possibilities: unused gift cards, clothes hanging in your closet with the tags still on them and gifts from years past never taken out of the box.
Although the economy thrives on heavy consumer spending, it is still important for consumers to spend within reason. There is no sense having an economic boon for two months, then returning to unemployment and negative economic growth after the season passes.
|Last Updated on Thursday, 08 December 2011 14:53|