NEW YORK -- It is possible to have a great holiday season without ending up deeply in debt.
"It comes back to that ugly 'b' word -- budgeting," said San Francisco financial planner Kacy Gott. "Budgeting is simply the best way to do it."
Making a holiday shopping list, checking it twice -- and then sticking to it -- seems to be difficult for Americans.
Ways to avoid debt hangovers
Financial planners and other consumer experts suggest these steps to keep holiday spending in check and to avoid debt hangovers:
-- Make a list of what you expect to buy. It should include gifts, the cost of sending cards, party clothes, decorations and party supplies, even your tree.
-- Look at your financial situation. If cash is low and debt is high, scale back your list.
-- Carry your list when you shop. It helps prevent impulse buying.
-- "Window shop" at malls, in catalogs, on the Internet for good deals before you buy.
-- Need to finance or charge some things? Commit to pay off the bills in the shortest time possible to avoid interest charges.
-- Shop early to find bargains.
-- Ship early so you can avoid expensive express deliveries.
-- E-mail holiday greetings to save paper and postage.
An annual shopping survey conducted by the International Mass Retail Association, a trade group of retail companies and their suppliers, found Americans last year said they would spend an average of $849 on holiday gifts. They actually spent 20 percent more, or $1,067.
This year, consumers surveyed by the Arlington, Va., trade group have set a goal of $828, down slightly from 1999. But "we believe that they will actually spend more, as they did last year," the IMRA said.
"It's the old 'Ho! Ho! Oh no!' story every year," said Steve Rhode, president of Myvesta.org, a credit counseling service in Rockville, Md., and coauthor of "Get Out of Debt." Most people, he complains, are completely passive when it comes to managing their money -- until debt problems overwhelm them.
Rhode suggests you make out a budget and write the total, say $1,000, in the back of your check register. "As you purchase -- whether by cash, check or credit -- subtract it from the balance," he said.
This will help you avoid overspending, he said. And, as an added bonus, it will give you a head start on planning for Christmas 2001. "In January you'll know how much you spent at Christmas. Divide by 12 and save that much every month and you'll have enough for next year without having to fall back on credit cards," Rhode advises.
Cyndi Bailey of Englewood, Colo., knows how Christmas spending can get out of hand.
There was a time when her idea of Christmas presents included a $550 watch for her mother and a $1,500 lawn mower for her father-in-law.
Bailey, a 26-year-old computer software engineer, said she and her husband were busy charging their way deeper and deeper into debt that had begun building during her college years and became overwhelming by the fall of 1998.
"We were getting 10 to 15 phone calls a week" from creditors, Bailey said. "My husband and I talked about it and decided that either we had to do something or change our names and go into hiding."
They sought help from the Consumer Credit Counseling Service in Denver. The nonprofit counseling service helped them consolidate their debt -- which had grown to more than $60,000 -- and work out a payment schedule with creditors.
Bailey, who hopes to have the debt paid off by next August, now has a different approach to holiday shopping.
"I love Christmas, and we do try to be generous," she said. "But instead of buying outrageously priced things, I try to find things people will like and use on a daily basis -- and that we can afford."
She starts by making up her holiday shopping list in June.
"I start early. I go to outlet stores where they have discount stuff. I find a lot of things I know my friends will like -- and they can be 70 percent off," she said. She also buys on layaway, paying for the purchase over several months.
And this year she'll also be making some gifts featuring photos of her 6-month-old son Donovan.
Consolidated Credit Counseling Services in Fort Lauderdale, Fla., notes that one of the biggest shopping days of the year is the Friday after Thanksgiving -- known among consumer counselors as "black Friday" for the impact it has on the balance sheets of families already heavily in debt.
The group's hotline -- 1-800-SAVE-ME-2 -- will be operating from 9 a.m. to 10 p.m. EST on Nov. 24 and through the next week to dispense spending and budgeting advice. There's also a holiday "survival guide" on the group's web site at www.consolidatedcredit.org.
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