Spend money smartly and enjoy holidays

What do holiday parties, trips, family gatherings, decorating and shopping have in common this time of year? Next month’s paycheck!

Being out and about while shopping and feeling the mood, it’s easy to lose sight of goals, and stores are banking on that impulse to overspend. Congrats to those who have this under control. Through the years, holidays get bigger and better, and people spend more to have a happy holiday. That becomes more and more burdensome afterward.

In 2011, the average holiday shopper spent $398.62 during Black Friday weekend according to the National Retail Federation. Imagine that you met that expenditure of $398.62, but let’s round it up to $400 for this example.

For this year, 2012, you reduce that amount by half – you invest $200 and spend the other $200 on gifts and commit to this plan with an increase for inflation. So if the rate of inflation is 2.5 percent, then this year’s “Black Friday Investment Fund” would be $205 and 2014 would be $210. Commit to this for 20 years and that hardly missed $200 becomes $8,117.45 (based on 5 percent return). AmericaSaves.org certainly has given us an interesting example to ponder.

Consumer spending indications are that this year, holiday spending will increase 3 to 4 percent. Many of you are tired of holding tight and want to let out the strings a bit. Don’t do it. Stick to your plan. For last-minute shopping, here are a few thoughts.

Why? As you prepare for parties, outfits to wear, celebrations or gifts – is it because you always have? This time, examine each item on your list and ask yourself, “Does it earn its place in our celebration this year?” How much are you doing out of habit or perceived expectation?

Are you following a list? Keep the list as specific as you can and stick to it.

Comparison shop – online, smartphones, shopping local. This makes shopping faster, less travel, smarter, competitive and less expensive. Figure in the tax, shipping costs and service needs into your final, smart decision-making process. This year, two of the items I compared were distinctly different items. I compared local and online pricing. For these two items, buying locally was not only less expensive, but the large item was gift-wrapped at no additional cost.

Check your supplies for mailing and gift-wrapping before you buy more.

Pay with cash: You’re less likely to overspend if you pay in cash. If you do use a credit card, use one with low interest and only charge the amount that will be paid off within one month.

Return policy. Be sure to check this out when you make a purchase. Can it be returned? Who pays shipping or restocking fees? Is there a time limit? Do you get store credit, or is your money returned? There may be other factors that may affect your recipient.

Whatever you are doing for the holiday season, I hope you do it with special friends and family, have fun and make memories. Best to you and yours.

ricekw@co.laplata.co.us or 247-4355. Wendy Rice is family and consumer science agent for the La Plata County Extension Office.