HOLIDAY PLANS DON'T HAVE TO INCLUDE MAJOR CREDIT CARD DEBT
Behind the holiday cheer, many Americans are leaving a paper trail of credit card debts that can make January and February seem pretty bleak.
The average American already is holding a credit card debt of more $2,200. The last thing many of us should be doing is adding to that mountain of debt, often at high rates of interest.
"Spending money on people you care about or on special events during the holidays is not necessarily a bad thing," says Linda Boelter, Certified Financial Planner and University of Wisconsin-Extension family financial resource specialist.
"But your personal priorities and resources should determine what you spend, rather than the available credit balance on your credit card."
A new University of Wisconsin-Extension financial program, Money 2000 and Beyond, is designed to help households increase their savings and reduce their debt into the next century.
Money 2000 and Beyond can help people at all income levels set their own financial goals. The program includes information on basic budgeting, credit and debt management, investing and planning to reach financial goals. Components of the program include on-going support for participants, quarterly newsletters, home study materials, computer debt analysis, and local workshops and seminars.
During the holiday season, Boelter recommends spending some time in advance planning for holiday expenses. Draw up a budget that includes extra items you will need and gift ideas for everybody on your holiday list. Include items that are easy to overlook, such as camera film and development costs, holiday cards and postage, and extra grocery store purchases.
"Planning in advance can help you curb spending by reducing impulse purchases. It also can save time that you might spend shopping without specific ideas," Boelter says.
If possible, consider doing some activities and shopping at other times, rather than during the holidays. This can save you time and money. For instance, rather than entertaining during the busy month of December, hold a neighborhood open house around Valentine's Day or host a family reunion in the summer. People may be more likely to attend and appreciate an event during a less demanding time, such as mid-winter.
Likewise, consider sending cards and letters when things slow down after the new year. People appreciate hearing from distant friends and relatives at any time of the year. If you have a computer, you can send electronic cards and messages that don't require postage or purchasing cards.
"Gifts are one of the biggest expenses most families encounter during the holidays," Boelter says. "To save money, you may want to reduce the dollar amount you spend on each person, or you can reduce the number of gifts you purchase by exchanging names with family members."
If you don't want to cut back on gift purchases, consider spreading your gifts throughout the year. For instance, take a special friend or relative out for lunch or dinner later in the new year. Or, make a certificate offering one free night of childcare or a homemade and delivered meal each month for a year.
"Besides saving time during the busy holiday season, these ideas can spread out expenses during the year, rather than causing a credit crunch in January and February," Boelter says.
For more information on how to enroll in Money 2000 and Beyond or if you have other financial management questions, contact your county UW-Extension Office.
© 1997-1999 Board of Regents of the University of Wisconsin System, doing business as the Division of Cooperative Extension of the University of Wisconsin-Extension.
If you have questions or comments about the Money 2000 Web site email Linda Boelter at: linda.boelter@ces.uwex.edu