Most families don't plan to run up
high balances on their credit cards during the holidays -- it just
happens. Nearly one-third of adults say they spent more than they
planned on holiday gifts. Most spent $100 to $500 more than they
planned. It is hard to pay off an extra $500 on credit cards after
the holidays.Ways to control your spending
Start by making a written plan for holiday spending and gift
giving. Think about how much you can afford to spend on gifts,
decorations, holiday meals and travel.
Set a spending limit for gifts for each person. Include limits on
other items in your spending plan. Start looking for bargains early.
If it's been a tough year for you, think about cutting back on what
you usually spend. Talk with friends and family about not exchanging
gifts, drawing names so you give fewer gifts or setting dollar
limits on gifts.
Decide if you are going to use a credit card for holiday
spending. If you use only cash, leave your credit cards at home.
Then you won't be tempted. If you write checks, be sure to record
each in your register and figure the balance before writing another
check. Stay within your limit!
If you need or want to use a credit card, pick just one to use
for your holiday spending. It's easier to control your spending with
one card. Write your spending limit on an envelope and put it in
your wallet. When you use your credit card, write the amount on the
envelope and subtract it from your limit. Put the receipt in the
envelope. When you've reached your limit, stop using your credit
card!
Try to separate shopping trips from spending trips. Make one trip
to compare prices and value, but don't take along your checkbook or
credit cards. When you've decided what you can afford to buy, go
back to make the purchases.
Ways to cut holiday costs.
Make gifts by hand or give
gift certificates promising your time or talents. Have friends or
family over for dessert rather than for a meal. Make your own
decorations. The gift that each of us remembers as most special is
usually one that involved someone's time and thought, not large
amounts of money.
Credit card offers. During the holidays, your credit
card company may offer to let you skip a payment or two. Or, it may
invite you to pay back only the minimum or even reduce your minimum
payment. Don't be tempted to take these offers, since you'll pay
more in the long run.
