Get Back to Basics this Holiday SeasonWednesday, November 19, 2008

Retail spending this holiday season is expected to rise just 1.9 percent this year, according to research conducted by the National Retail Federation. The average consumer plans to spend $832.36 on holiday-related shopping -- just a few dollars more than the $816.69 they spent last year.

"For consumers already struggling to make ends meet, holiday spending can quickly lead to overwhelming debt that can take months, or even years to pay off," said Mechel Glass, director of education for Consumer Credit Counseling Service (CCCS) of Greater Atlanta. "It is especially critical during these challenging economic times that consumers make wise and well thought out purchasing decisions this holiday season."

Although unemployment rates are continuing to rise, retailers traditionally add seasonal staff this time of year. Working a few evenings a week or weekends can provide the additional money you will need to buy gifts for family and friends without overextending yourself or your budget.

CCCS offers other tips to help consumers get back to basics this holiday season:

Make a budget

Decide what you can spend before you shop. Don’t forget to include decorations, wrapping and cards, and entertainment when developing your holiday budget. If you will be traveling this holiday season, also include the cost of travel, gasoline, airfare, hotel stays, meals and entertainment.

Cut back on traditional gift giving

Many families are reducing their holiday spending by limiting the number of gifts they purchase. Consider agreeing to forego gifts for adults this season and buy gifts just for children. If you don’t want to give up the adult gift exchange altogether, put the names of adult family members in a hat and have everyone pick a name and purchase just for that person. Agree on a spending limit and stick to it. If you traditionally buy gifts for coworkers and other friends, consider ways to reduce or eliminate spending. Instead of individual gifts for each coworker, bring in a tray of goodies for everyone to share. Handmade and heartfelt gifts such as ornaments, frames, and baked goods are great alternatives to more expensive, store-bought gifts. Work with children to make gifts for grandparents and other family members.

If you want to do something really special this holiday season, get your family and friends together and volunteer at a food bank, church, shelter or hospital. You will do something great for others and it will be more meaningful than any gift you can purchase.

Be a smart shopper

Retailers are already beginning to offer great discounts on items. Knowing exactly what you want can help you get the best deal. If you prefer to shop in the store, closely watch the sale ads for items on your list. For shoppers who like to brave the crowds the day after Thanksgiving, www.bfads.net and www.blackfriday.info are great resources to plan your day. They have already begun posting retailer deals for what is traditionally the busiest shopping day of the year. If you shop with friends, consider splitting up and sharing your lists so you can take advantage of more savings opportunities.

If you are ready to buy, but need the next several weeks to pay for your purchases, consider shopping at a retailer that offers a Layaway program. While most large retailers do not offer layaway, K-Mart has always offered it, and Sears reintroduced the program specifically for the holiday shopping season.

Shop online

Online shopping can be especially useful for consumers looking for a specific item or for shoppers who can’t resist the impulse to buy. Retailers sometimes offer internet-only specials, and many offer free shipping. And for consumers looking for layaway options for online purchases, www.elayaway.com has partnered with more than 1,000 online retailers to give consumers the option to pay over time.

Compare prices, use coupons, and look for rebates

When you already know what you want, you can find the best prices by using sites such as www.pricegrabber.com, www.bizrate.com, or www.mysimon.com. For information on available rebates on consumer electronics, computer software and hardware, and other items, visit www.rebateplace.com. And before you buy anything, look for coupons to save on in-store and online purchases. Sites such as www.couponcabin.com or www.dealcatcher.com can help you find deals for dollars off, a percentage off, or free shipping that can add up to hundreds of dollars in savings.

Don’t rule out non-traditional retailers

Thrift stores and consignment shops may hold the perfect gift at a much lower price. Also consider sites such as www.ebay.com or www.craigslist.com when you are looking for something in particular.

Use credit wisely-or not at all

Avoid using credit cards to make holiday purchases, especially if you are not able to pay the balance in full at the end of the month. Spending more than you have budgeted is much more likely if you are using credit cards, especially if you’re rushed for time and feeling the stress of holiday shopping. Leaving your credit cards at home will help ensure that you will stick to your budget, even if it means spending a little more time looking for the right gift.

If you do use credit cards for holiday shopping, keep a running tally of what you have spent and deduct it from your checking account balance. Incorporating these purchases into your budget will help ensure you don’t overspend.