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Published November 26, 2010, 12:00 AM

Have a strategy during season of spending

Money advisers offer tips to curb holiday expenses
The day of thanks has passed. We’re now in the season of spending.

By: Sherri Richards, INFORUM

The day of thanks has passed. We’re now in the season of spending.

U.S. consumers plan to spend an average of $688.87 on holiday-related shopping this year, according to the National Retail Federation. This is a slight increase from last year.

Some people are still paying off last year’s holidays, and it’s important not to pile new debt on top of old, said Duane Emmel, a financial counselor with The Village Family Service Center in Fargo.

“That doesn’t mean you won’t always borrow or put (gifts) on a credit card,” he said. “We have to have some strategy: How can I pay this off quickly?”

Here are tips from local money advisers and national groups to get control of your holiday expenses.

  • Make a list. Ask yourself, who really needs a gift? How much are you going to spend on each person? “Add that up. Know how much you’re planning to spend,” said Nancy Kvamme, who owns Fargo-based In the Black Money Coaching.

    Include holiday decorations, travel, parties and postage. “You have to look at that total package,” Emmel said.

  • What’s your budget? Figure out how much money is left over at the end of each month. Decide a maximum amount of spending that will be done on credit cards. Free up money for holidays by cutting back on spending elsewhere, but be intentional about setting this money aside.

    “Tracking is a physical way of doing that,” Emmel said. “Write down everything you’ve spent, and keep track of it.”

  • Stick to your list and budget. More time spent in the store means more temptation. “We have a tendency to buy things for ourselves, not just on our gift list,” Emmel said.

    Also, don’t give in to guilt. Let’s say you planned to give a $40 sweater but found it on sale for $25. A lot of people would go buy another $15 gift, to not be perceived as “cheap.”

    “It’s perfectly fine as long as it’s within the budget or less,” Emmel said.

  • Preplan before you go to the stores. Comparison shop through circulars or online. If you’re hosting during the holidays, plan your menu in advance, Kvamme said.
  • Be a savvy consumer. Limited-time offers or “limit two per customer” can make shoppers act irrationally. Kvamme points out two-for-one sales. “Is it something you really need?” she asks. “Do you need two?”

    Consumer Reports’ December issue warns about “deep-discount come-ons,” where retailers jack up the “regular” price so its sale price looks like a steal.

    “Don’t get caught up in ‘I saved money by spending money,’ ” Emmel said. If that item is put on a credit card, “the interest is going to cost you that over the next few years.”

  • Be creative. Can you give someone a homemade gift or offer a service, such as shoveling? Think about activities. Will your child remember what you bought him or her two years from now?

    “Build memories, not debt,” Emmel said.

  • Think about next year. Start setting aside an amount each month for 2011’s gifts and expenses, Kvamme suggests. Look for deep discounts after Christmas and stock on up things like wrapping paper and greeting cards.

Sources: 360 Degrees of Financial Literacy, Consumer Reports, The Financial Physician, The Village Resource Center, Better Business Bureau

Readers can reach Forum reporter Sherri Richards at (701) 241-5556