Cents and Sensibility
Holiday happiness does not come from going broke
You might think it's a bit too early to start thinking about your holiday shopping, but your opinion isn't shared by the nation's retailers, many of whom are already beginning to inundate you with catalogs and advertisements.
Of course, you enjoy giving presents to your loved ones, but if you go overboard with your spending, you could find yourself swamped by credit card bills.
Can you avoid the "debt trap" and still be generous? Yes -- if you make the right moves. Consider the following suggestions:
» Set a budget. Let's face it: Budgeting is boring. You probably don't do it most of the year, so why should you start at the holiday season? Because setting a budget, and sticking to it, can be your best debt-busting friend. So, before you begin shopping, determine how much you can realistically afford to spend. Once you've established some self-imposed limits, you'll be surprised at how creative you can be in finding nice gifts at reasonable prices.
» Make a list and check it twice. You may not have the luxury of basing your gift decisions upon who has been naughty or nice this past year, but you do have some control over who makes your final list. If you're trying to save money, you needn't feel obligated to go beyond your immediate family and friends. While you might really like to give gifts to everyone in your life, it just may not be practical.
» You'd better shop around. There's never been a better time to be a "comparison shopper." With added competition from discount stores, many merchants are making concerted efforts to keep their prices down. And you have the vast expanses of the Internet to help compare prices on similar items. Here's a hint, though: To be a really smart shopper, you'll want to start early.
» Hit the sales. As you know, many retailers have big "after-holiday" sales to boost business during January, typically a slow month. Why not take advantage of these markdowns to buy presents for next year? By "stockpiling" gifts, you may significantly reduce your holiday budget for next year.
Once the holiday shopping season is over, you may want to start saving for next year's gifts. By putting away even a modest amount of money each month, you'll have several hundred dollars built up when the holidays roll around again. If you're like most people, however, you might find it hard to spare even $50 a month or so for a holiday gift fund. After all, you have plenty of other bills and expenses in your life to deal with. And that's why you should "pay yourself first" by having the funds taken automatically from your checking or savings account and placed in investment account. You may only earn a modest interest rate, but you'll be removing these dollars from your normal channels of spending.
By following these basic suggestions, you can take a lot of the stress out of the holiday season -- and that may be the nicest gift you can give to yourself.
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Guy Steele is a financial planner and head of the Pali Palms office of Edward Jones. Send planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, Hawaii, 96734,
or call 254-0688