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Rein in spending for the season

December 07, 2007|By LYNN LITTLE

If you usually find yourself in January and February facing a stack of bills from holiday shopping, resolve this year to not let your spending get out of control. The holiday season is a time to share, to enjoy family and friends and to give more of ourselves. By planning ahead, you can be creative and thoughtful, yet stay within a budget.

· Your best friend is a budget - Plan your holiday budget based on what you can realistically afford. Take a look at your finances. Have you saved for holiday expenses? Or, will the gifts need to be purchased from regular monthly disposable income? Do you plan to pay with cash? Or use credit?

Make a list of the friends, family and others you would like to remember with a gift. Place a dollar amount by the name of each person on your gift list. Be certain you also allow for other holiday expenses such as decorating, entertaining, gift-wrapping and postage.

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· Plan ahead - Overspending is easy. Advertising increases during the holiday season and stores offer expanded inventories. Since so often holiday shopping is impulsive, be sure you shop with your list and consider paying in cash. If time permits, separate "shopping" trips from "spending" trips. Use shopping trips to get ideas, make a list of alternatives, check prices, and comparison shop.

· Remember hidden costs - When selecting gifts, think not only of the initial cost of the item, but also the cost of maintenance and repair over its useful life and shipping to distant recipients or from online stores to your home.

· Use credit wisely - If you plan to do your holiday shopping with a credit card, consider using only one credit card and keeping a running tally of your expenditures. Many people carry multiple credit cards, so it's easy to lose track of holiday credit card purchases.

· Spend only what you have - Avoid buy-now, pay-later offers. These offers encourage you to spend money you don't have. These plans usually charge high interest from the date of purchase if you can't pay the bill in full by the end of the no-interest period, or if you are just one day late with a payment.

· Surf the Web - Online shopping may help make your holiday season less stressful. Make sure you understand refund policies.

· Give your time - Creative ways to give during the holidays can save you money. Try giving the gift of service. Offer to babysit, run errands, shovel snow, iron, tutor or do housekeeping.

· Give to your community - Teach your children the value of giving. Have them donate used toys and clothing to charity. You also might be able to take a tax deduction.

Start now to control spending for the holidays. With advance planning, your chances of not overspending improve greatly, and you may be better able to control the temptation to spend too much as an expression of love.

Spending more than you planned can add stress during the holiday season and afterward. Keep in mind that thoughtfulness can be far more important than cost.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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