Checkbooks can survive holidays

Its easy to get caught up in the holiday shopping spirit, but it could mean a visit from the Grinch of Christmas Past next month as the bills start to arrive.

According to the Wall Street Journal, 70 percent of Americans have no money left over after paying basic expenses each month.

But no one wants to seem like a Scrooge at Christmas time, so many people are inclined to spend more than they can afford during the holidays.

The period between January and March is when people start getting their credit card bills in and getting into a crisis situation, said Tami Wagster of Financial Frontiers in the Valley. The problem is that most of us are already living up to our means and then something bad happens and we just cant meet our expenses.

Her goal is to help people get out of debt and stay out of debt, and never get in that hole again.

To help consumers make it to the New Year with their financial health intact, the Consumer Credit Counseling Service of Alaska offers the following advice:

Get a plan. Develop a workable holiday budget. First, list all holiday-related expenses, making note of possible gifts and alternatives, and how much you can afford to spend on each person. Remember to add items such as postage, charitable donations and travel. Add up the total and compare with available funds. If its too much, look for ways to trim expenses.

Evaluate your gift list. It may be necessary to trim it back to family and close friends. Talk to some people about not exchanging gifts at all, or about limiting the cost of presents. Send a personal card or note in lieu of gifts. Some of the most thoughtful presents cost next to nothing; for example, giving time or services such as baby-sitting or housecleaning, a free car wash, sightseeing trip or gardening. Handcrafted gifts and baked goods can mean more to the recipient than expensive store-bought items.

Shop smart. Never shop in a rush or under pressure. Take an initial shopping trip to scout out the sales, but dont carry a checkbook or credit cards. With a little extra time, you can get the best possible deal. Watch the advertising and sale fliers that come in the newspaper. Try asking salespeople when various items will go on sale. Most retailers will reveal sale dates because they dont want people shopping at a competitors establishment.

As late shoppers know, the holiday sales get better as Christmas approaches. Gift wrap and accessories frequently are offered at large discounts, so its a good time to stock up for next year. If holiday sales are sluggish, clearance sales will appear earlier in the season.

Use credit wisely. Try to use the card with the lowest interest rate, and only carry one or two cards on shopping trips. Monitor your credit purchases daily or weekly so youll know the total amount charged. A good rule of thumb is to not charge more than one can afford to repay within three months.

Buy in bulk. Join family and friends to chip in on big-ticket items. Purchase an economy-size food package at a discount store, then split the item for individual gifts.

Try to buy with cash. Since it hurts more, this method tends to limit spending more than using credit cards for which the repayment date seems so far away. If paying by check, write down each purchase and deduct the total from your balance immediately.

Dont tempt yourself. Sometimes we cant resist buying one extra gift, or exceeding preset limits because an item just seems so right for someone. These decisions can be budget-busters, though. Try to stay out of the mall after your holiday shopping is done.

Remember the needy. At office parties and other holiday functions where youre asked to provide a gift, suggest that people bring canned food for the homeless or disadvantaged.

Teach children the value of thrift. Instead of cash, give them U.S. Savings Bonds. They cost half the face value, will not be immediately spent, encourage the savings habit, and they are interest-bearing and tax-free until redemption.

Consumer Credit Counseling Service is a state agency that provides confidential counseling, debt management and education programs. People may schedule appointments by calling (800) 478-6501.

Wagster also offers a crisis program to handle pressing debt problems beyond just the holidays. Often, creditors can be persuaded to reduce interest or accept lower payments over a longer period of time. Wagster guarantees a 10-percent reduction in monthly payments on unsecured debt, or she will refund the $250 initial fee.

The long-term Debt Free and Prosperous Living program helps people set up a system to get out from under their debt load, even their mortgage, within five to seven years, and to never need credit again, Wagster says.

Financial Frontiers can be reached at 357-9462 to set up a consultation at Wagsters home or at the clients.

Photo:Holiday budgets only stretch so far despite merchants offers of easy credit. Here, Sharon and William Dwyer look over the tempting merchandise at Zales Jewelers in Cottonwood Creek Mall.

Photo by JODI STEPHENS.