Surviving the Holiday Spending Season…Debt Free

As the traditional giving season approaches, there is one important item to add to your to do list: Create a holiday budget. Before the gift shopping and wrapping begins, take control of your wallet through financial preparation. Remember, you can avoid the credit card crunch and the dangerous pitfall of borrowing against your company’s retirement savings plan or IRAs.

Here’s how to establish a holiday wish list and spending budget:

• Start by determining the total amount of money that you want to budget for gifts. Carefully evaluate how much money your budget will allow for holiday spending. Be honest and be realistic. The idea is not to spend more than you plan for during the holiday season.
  
  
• Next, make a list of people that you will be buying gifts for this year.
  
  
• Write down ideas for each person on the gift buying list. Set an amount that you will spend for each person on the list, than estimate the cost of each gift idea. Create an alternative gift idea for each person if your first idea is too expensive
  
  
• After making the purchase, write down the exact cost of the gift, totaling your expenditures. Be sure to include the price of gift wrap and cards.
  
  
• Prioritize your holiday wish list: Consider your plans in light of your budget. You may have to choose between gift-giving, entertaining or travel. Families can decide together how much to spend for the holidays, including gifts, decorations and food.
  
  
• Take a radical step to hide your credit cards, put your credit cards in the freezer.
  
  
• Don’t forget inexpensive gifts, such as themed baskets — An Italian gift basket can include a colander, spiral pasta, gourmet spaghetti sauce, a pasta spoon and garlic bulbs.
  

Whether you celebrate Christmas, Chanukah, Kwanzaa, or even the Winter Solstice, you can make a commitment to sharing holiday presents with family and friends, attending your place of worship, and giving to your favorite charity, without worrying about credit card bills or repayment of bank or 401(k) loans.

©2004 Standard & Poor’s Financial Communications. All rights reserved.