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Tips for stretching your holiday budget

Savvy shoppers are expected to do comparison shopping online this year. According to a recent study conducted by BIGresearch for the National Retail Federation, there are a lot of smart shoppers out there.

The study says 44.2 percent of consumers will go online to shop at some point during this holiday shopping season, about the same as in 2007. On average, consumers will make one third -- 33.6 percent -- of their holiday purchases online, up from 30.2 percent last year.

Buying tips
One hopes those shoppers will comparison shop for better prices -- instead of spending too much by clicking "Charge my card" without thinking through their purchases.
Maximize your spending power:
  1. Make a spending plan
  2. Know your limits
  3. Track your spending
  4. Shop with a list
  5. Shop early
  6. Be an educated consumer
  7. Load up your wallet with cash
  8. Use credit judiciously
  9. Beware of sales pitches

Perhaps a sign of poor economic times, each shopper is expected to spend $832.36 on holiday merchandise, a paltry 1.9 percent increase over the $816.69 spent last year on average.

Holiday temptations

The holiday season is an all-out assault on your senses. The music, decorations, lights and the delicious seasonal smells assail your sensibilities on every street and in every store. The pace is frantic, the mood is manic, and the atmosphere is, well, different.

The holidays are so set apart from the norm that people are tempted to break out of their norm -- for just the season.

"It's seduction," says Ruth Hayden, a financial educator and author of "Your Money Life: The 'Make-It-Work' Workbook."

"Consumers are seduced into buying. To be seduced means that you're crossing boundaries that you've set. You're tempted to buy because you want to belong. You're tempted to buy because you want to create love."

And that's where it gets dangerous -- financially speaking.

We convince ourselves that breaking from our budget and using our credit cards a little more freely just this one time is all right. Come January, we'll get caught up and back on track.

"Unfortunately, too many consumers are paying for Christmas purchases beyond six months, a year, two years and even longer," says Howard Dvorkin, CPA and founder of Consolidated Credit Counseling Services Inc., or CCCS, in Fort Lauderdale, Fla.

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Let family traditions decide your spending

"Most of us cannot remember gifts we received last year, let alone as a child," says Dvorkin. "It's the family traditions and memories that really stand out."

When deciding what to buy and what to do, first consider your family's favorite traditions and holiday memories. What truly brings a smile to your face? What is the one thing you'd most like to do this holiday? Is there something new you'd like to try?

"If you don't have the cash in your pocket, you shouldn't be buying. You can't afford it. Next month, when the bills are coming in, chances are you're not going to be in better shape," Dvorkin says.

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