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Dec 9, 2005 8:52 pm US/Pacific
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How You Can Control Your Shopping Budget
Shopping Survival Guide
by Randy Paige
LOS ANGELES (CBS) ―
The cash registers are ringing, the credit cards are flying, and gift giving is at a fever pitch. But the question is, what happens after the presents are unwrapped, and you start getting your credit card bills in the mail. How do you keep from going overboard now and paying for it later? Here are three simple steps that can save your pocketbook and your credit this holiday season.
Experts say you've got to have a plan before you get caught up in the frenzy of holiday shopping. Jennifer Root is a credit expert with By Design Financial Solutions, a non-profit company which helps consumers dig themselves out of debt. She says, "first, make a list of all of the people you intend to buy gifts for this year; and think of every single person and then go to each person on the list and write a dollar amount."
Step two, add it all up to get the total amount you intend to spend and make sure you can afford it.
According to Root, "you should check and see if it's something you can pay back by Dec. 31st of this year because you don't want to be taking these bills into next year."
Step three, take your shopping list and make sure you stay within the budget for every name on the list.
"If you do spend less on one person," Root says, "you can spend more on another person."
Remember, once you've spent your total budget, you've got to stop spending money.
Experts say you shouldn't spend more than one percent of your net annual income on the holidays; that includes gifts, travel and entertainment.
"If you can't pay it all this year then try to minimize the damage by paying it off in a couple of months next year, getting a part time job for the holidays, a lot of places offer seasonal employment over the weekends, having a garage sale, maybe you could ask for some overtime at work, different ways to raise a little extra money to help you get through."
Here's the most important part, take that total you plan to spend on gifts this year, divide it by twelve. Then go to your bank, take out a savings account and every month transfer one twelfth of your gift budget from your checking account into the new savings account. Then, next year, your entire gift budget will be just sitting there, waiting for you to spend.
The following links provide tips on holiday spending, budget forms, and links to sites that will show you how to get the lowest interest credit cards, just in case you do have to go into debt this holiday season.
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