 10
questions for holiday shoppers
|
When I was growing up, one of my favorite cartoon
characters was Scrooge McDuck. He still is. Uncle Scrooge knows
the value of a dollar. Even though he has three cubic acres of cash
socked away, he never forgot the lesson of his first dime, aptly
named "Old Number One." While he is a feathery Warren
Buffett in his business dealings, McDuck remains a family duck at
heart, and because this is the holiday season, I have no doubt he
would offer some solid financial advice for his younger relatives
Donald, Huey, Dewey and Louie. Were I to eavesdrop on their two-dimensional
family chat, I imagine that he would ask questions such as this:
1. Are you currently being visited by the
ghost of holiday debts past? If you are
still making payments on last year's holiday spending, don't add more
debt again this holiday season. Put yourself on a strict cash, or
debit-card-only, shopping diet -- and don't cheat!
2.
Have you weighed the piggy bank? Whether you have a piggy bank or your
own money bin, you must know how much you can realistically afford to spend if
you are to avoid going into debt at the holidays. The best way to accomplish that
is to review your finances carefully and determine how much, exactly, you will
have available for holiday spending.
3. Do you have a holiday shopping
map? I know it's not a treasure map, but to keep from overspending,
and save your treasure, you need a budget and a plan for how to
stay within it.
4. Do you know how to recognize
holiday scammers? Shopping online can save you time and money,
but beware of sites you don't know and the personal information
you have to give over the Internet. The Beagle
Boys (the criminals who are always after McDuck's fortune) have
gone high-tech, and fraud and identity theft are serious concerns.
So be sure you are dealing with reputable merchants before giving
any credit card numbers or personal information online.
5. Have you made a list and
checked it twice? Remember to include everything for which you will be
spending. Don't forget about holiday wrapping paper, food, travel and decorating
expenses. These can add up quickly and should be included in your budget.
6. Will you resist temptation
once you are finished shopping? Even McDuck has trouble resisting
a bargain. The high that you receive purchasing extra gifts because
they are on sale is not worth the debt hangover afterward. Stay
out of the stores. Get a holiday high by volunteering at a local
shelter or caroling instead.
7. Can you create a little
holiday magic? Be creative and come up with ideas for how you could spend
less. Consider a potluck dinner rather than footing the bill for a dinner gathering.
Shop at consignment shops for decorations and even gifts. Bake or create gifts
using your own hands and inexpensive materials. Remember, at the North Pole, Santa's
elves make the toys, they don't buy them.
8. WWSD -- What would Santa
do? While Santa brings gifts, it's only for those on his
list. Also, Santa does not receive credit card bills with a 16 percent
interest rate 30 days later. So consider gift alternatives such
as gifts of service or time. You might give your brother, with three
small children at home, a coupon for a night of baby-sitting. Your
jet-setting sister might appreciate a coupon to housesit. You get
the idea.
9.
How will you pay the piper in January or February? Keep track of all your
spending. If you are planning to charge some purchases, make sure you will be
able to pay off the balances within 90 days. If you don't, your holiday spending
may end up costing you much more than what you spent when you bought your gifts.
Interest charges on the remaining balances will eat up any savings that you received
when originally buying. 10. Would charging
gifts push you over the debt cliff? Stop! I know it is hard to do, but
don't let holiday spending push you over your capacity to manage your debt load.
If you listen to no other advice from the Debt Adviser, this would be a good place
to start: Don't charge your holidays and ransom your
financial future.
The Debt Adviser, Steve Bucci,
is the president of Money Management International Financial Education Foundation
and the author of Credit
Repair Kit for Dummies. Visit MMI
for additional debt
advice or click here
to ask a debt question. | 
