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Watch your wallets. A phenomenon
known as "the holiday spirit" seems to be sucking the
green right out of Americans' pockets. And the credit card bills
next month will be downright spooky.
According to VISA USA, less than 21 percent of the
population plans for incidental expenses this time of year. Heck,
approximately 60 percent of us don't plan ahead at all, says John
Putnam, a financial planner with Million Dollar Roundtable association.
That, of course, leads to stress -- the precursor to serious overspending,
experts agree.
The National Retail Federation has more distressing news: More
than half of consumers (51.2 percent) intend to add their own names
to their shopping lists, spending an additional $89.25. Overwhelmingly,
men and young adults plan to spend the most on themselves ($116.87
and $114.69, respectively). In the big picture, revelers will plop
down an average of $702.03 per person this month, up 4.5 percent
over last year. VISA's research puts the figure each American will
drop on holiday goodies at $941.
Meanwhile, VISA warns, financial planners recommend
limiting holiday spending to 1.5 percent of your gross annual income.
So to absorb that $702 without debt, you must earn $46,800 in paychecks.
Make that $62,700 if your spending dreams fall more in line with
the credit card company's predictions. (And remember, these spending
averages are per person, so theoretically, each person in your household
must bring home that much bacon.)
MSN Money financial columnist MP Dunleavey doubts
that preaching restraint will work. "There's a holiday maelstrom
that descends upon people," she says. "I know I lack the
ability to watch myself as I'm spending because that holiday spirit
puts both hands over my eyes and says, 'Oh, go ahead! Get that.'"
She finds the best way to win this struggle goes back
to the old-fashioned advice of writing everything down to keep the
dollars firmly front of mind. Today, software packages are smart
enough to help with the babysitting. But even the most sophisticated
software programs can't think for you. Take a lesson from these
unfortunate families as you consider the top-four budget-busting
categories.
Travel
For Don and Julie Engelhardt, the bleeding started over Thanksgiving
weekend. They live in Las Vegas, but he commutes to California for
his job, so travel is a weekly expense in their household books.
But he didn't realize he'd need reservations to park his car in
the airport's budget lot over the four-day break and wound up stuffing
it in a prime location.
"So after I'd spent a horrendous day shopping
on Friday, spending $250 and going through our bills to try to fudge
the house payment to cover it, he says, 'By the way, I have to pay
$75 for airport parking,'" says Julie.
"People do try to come up with different
ways of cutting costs, of being more financially responsible, but
there are pitfalls like these waiting," Dunleavey says.
Small stuff to watch out for: In addition to parking
fees, don't forget you'll spend additional money on gas to hit the
stores, visit family, even drive around to ogle outdoor lights.
You'd be surprised how many folks forget to include items such as
airfare, rental cars and hotel rooms as well, Dunleavey says. Then
there's truly hidden expenses, such as excess luggage fees or shipping
charges to schlep the gifts back and forth.
Entertaining
Diane Sermersheim had the means to buy a second
tree this year to bring good cheer to her basement, where crowds
usually gather. She had plenty of ornaments to cover two trees,
but didn't remember this plan requires another set of lights, tinsel,
tree topper, tree stand, tree skirt and even extension cords to
plug it all in.
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