Mary Deibel -
Scripps Howard News Service
Whether you celebrate Christmas, Hanukkah, Kwanzaa or New Year's, experts
say to plan ahead to get a good hold on holiday spending.
"When you don't plan, spending for gift-giving can become a burden," says
Charles Brown, head of the National Foundation for Credit Counseling.
"Now is the time to compare your income and savings to your credit-card
debt, living expenses and other obligations," Brown says, to have a holiday
spending plan in hand before Thanksgiving - and before you hit the stores.
The 2002 holidays come just as consumer confidence hit a nine-year low and
when Americans are coping with record-high household debt, which stands at
more than $7 trillion and 107 percent of disposable income.
That's why the National Retail Federation forecasts that holiday spending
will average $649, with retail sales rising a modest 4 percent to $209 billion
over a year ago. "We will be seeing a very cautious consumer this holiday
season," says Phil Rist of BIGresearch, which conducted the federation
Federation President Tracy Mullin says that "all retailers will be discounters
this year" with sales and markdowns prominent in stores already packed
with holiday merchandise.
Catalog sales are growing faster than in-store sales even though postage hikes
and a sputtering economy have dampened the mail-order outlook, with the Direct
Marketing Association predicting a flat year.
Online sales are expected to soar 15 percent in the fourth quarter, according
to Forrester Research, which puts 2002's e-tailing at $20 billion, including
$9.5 billion between Thanksgiving Day and Christmas.
Diane Swonk, chief economist for Bank One, says budget-minded shoppers "used
to see promotions only after Christmas, but now sales and promotions are a
part of the holiday season. You get discounts now, plus coupons to redeem after
Swonk is bullish on clothing, knickknacks and shopping early when promotions
and selections are best despite inventory shortages caused by the West Coast
dock strike that briefly stranded holiday shipments of Barbies and other toys.
With a gracious plenty to choose from, sit down to figure that holiday budget,
which usually swells by Christmas Day: Edie Clark of the International Mass
Retailers Association reports that the discounters' October survey shows that
consumers plan to spend $863 on gifts this year - just what they planned to
spend last year - but past surveys show they wind up spending between 15 percent
and 30 percent more than their initial estimate.
Still, shoppers can help curb their spendthrift ways: Start like Santa by
making a gift list, then checking it twice.
Know that kids come first, with the average child getting $350 worth of toys
a year, according to industry figures. Wish lists run three or four times as
much, so take the chance to sit down and talk with your children about what
is realistic and that Santa's sleigh has only so much space for presents for
good girls and boys.
Adult gifts can be budget busters, too, especially if you and yours go in
for one-upsmanship. If you come from a large, extended family, consider starting
a gift exchange where each of you draws the name of someone outside immediate
If penny-pinching lacks Christmas cheer:
- Try making something, whether chocolate truffles or baked goods, or a knitted
scarf. Children can try their hand, too.
- Give a couple in need of a night out a gift certificate for your baby-sitting
services, or give a tribute in the family's name to a favorite charity.
But remember, gifts are only the start of holiday spending. Decide if you
want to spend holidays with family, going to parties, seeing old friends, or
maybe a trip to get away from it all with bargain air fares and hotel packages
you must scout now.
Add up those expenses, including party and travel clothes, then figure decorating
costs, cards, envelopes and postage - and don't forget wrapping paper and ribbon.
Go back over the total to see what's necessary and not if you've busted your
The credit foundation's Brown cautions to stay the course in December, when
last-minute shopping is to be avoided because stressed shoppers spend more.
Keep a running tally of your expenses to make sure you don't exceed what you
set aside, and start the new year by paying your holiday bills in full, adds
Steve Rhode of MyVesta.org debt counselors, and resolve not to be among those
who overspend the holidays and start every new year deep in debt.
On the Net: nfcc.org
Photo Copyright Getty ImagesCopyright Scripps Howard News Service 2003