Don't Let Holiday Shopping Put You in the Red

      

     When the holidays roll around, many people think this time of year gives them free rein to overindulge -- not only with food, but also with shopping and gift-giving. A new survey from 
The National Retail Federation estimates that U.S. adults will spend more on holiday shopping this year. If you doen’t plan ahead and create a holiday budget, a tightening pocketbook may be a reality. Setting up a financial plan with staff at Neighborhood Housing Services of New Haven – and at many NeighborWorks organizations around the country -- and following other tips to control holiday spending can reduce stress and anxiety.

     According to a CreditCards.com report, 1 million U.S. consumers are already ‘holiday-stress-free” as they have checked everyone off their list and completed their shopping. While not done, another 34 million shoppers are chipping away at their lists and spending wisely by shopping for bargains and sales.

     An NHS Housing Specialist can help you look at last year’s spending and where you overspent. Many financial planners recommend spending no more than 1.5% of your annual income on holiday expenses. Working with NHS can help you set and reach your financial goals, such as saving for retirement or paying off debt – not just during the holidays, but throughout the year.

     Use debit instead of credit if you can. When choosing debit, it’s important to keep an eye on your balances. Many checking accounts allow a customer to spend more than is in the account, and charge an overdraft fee for the privilege. Also, when using debit for purchases, some banks charge a fee for the transaction that is similar to an ATM charge. These fees can be as much as $3.00 per transaction, even for small-dollar debit purchases.

     If you don’t pay in full, if choosing to use a credit card, be aware of how your bank charges interest, and where you are on your credit limit. If you exceed your credit limit, a card issuer may allow the transaction to go through, but increase your interest rate on all unpaid balances. If you’re thinking about debit spending or of carrying a balance on your credit card to cover gifts, make sure you’ve checked the fine print – going overboard on holiday gifts could cost you more than you realize in the long run. Consider layaway plans instead of credit. For expensive purchases, layaway fees are typically less than the interest on your credit purchases.

Avoid a holiday spending hangover this year and every year by setting up one-on-one time with a housing specialist at NHS of New Haven. Working with trained staff at NeighborWorks organizations can mean the difference between falling into a “financial trap” or working smartly and reaching one’s financial goals.

Happy Shopping!