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THE GOODS : Wrap Up the Savings : If Holiday Shopping Socks It to Your Budget, Here Are Some Tips to Keep Your Bank Account Out of the Red


Dara Duguay recalls dashing out for last-minute shopping two days before Christmas last year. "There were four people in line ahead of me, and each one tried to pay with a Visa card and each one was denied because the credit was overextended."

Duguay wasn't surprised. She is education director of the Consumer Credit Counseling Service and January is the nonprofit agency's busiest month, as people start picking up the pieces after overspending on the holidays.

"Our counseling schedule is just packed in January and February," Duguay says.

It's a similar story at the Los Angeles County Department of Consumer Affairs, says director Pastor Herrera Jr. "People who don't make holiday budgets invariably spend too much," he says. "We start getting calls a few weeks after Christmas from consumers saying they overextended their credit and hadn't expected to get laid off, or thought they could work extra hours, but aren't able to. They're in trouble."

To help holiday spenders out before they get in trouble, his department has issued a "News Alert Holiday Shopping Tip Sheet."

Duguay's counseling service, which has 13 offices throughout Los Angeles County, has gone even further and organized workshops on "Surviving the Holidays." "We'd had a lot of requests from companies who say the garnishment and bill collector phone calls start coming to employees right after the first of the year," Duguay says. As a response, last fall the agency developed a program to help consumers get through the holidays without overspending. "It was a huge success," she says, "so this year we enlarged and refined it."

The two consumer experts offer these strategies for balancing holiday generosity with common sense:

* Credit Cards. "If you buy on credit, be sure you understand all of the terms of your credit agreement, especially how much you must pay," Herrera says. "You could end up paying twice the price of the item."

If you buy $1,000 worth of gifts on credit and only make the minimum payments, you will be paying for this Christmas or Hanukkah eight years from now, Duguay points out.

"Sit down and decide how long you want to be in debt," she says. "Review your credit-card balance before you start, set a budget and stick to it."

She suggests that shoppers carry only one or two credit cards. Wrap each one in a piece of paper and each time you use it, write down the amount. Compare the running total to your holiday budget.


* Shopping: "Overspending on gifts is a basic problem," Duguay says. And yet, "in our workshops, when people are asked to recall the gifts that meant the most to them, they almost always mention gifts that took time to think about, not just money."

"One of the areas we are very concerned about," says Herrera, "is the importance of asking the store about the refund policy, especially when you are buying clothes as gifts. Don't assume the store will refund an item--many don't. And keep all your receipts and warranties."

Don't push yourself to finish shopping if you're tired. When you're so exhausted, you just want to get out of there and go home and you tend to buy anything.

Keep a shopping diary during the holidays and note when you buy and what mood triggered your purchase. We tend to overspend when we are tired, angry or nostalgic.

Limit the number of gifts to children, and don't feel guilty about saying "no" to them. Set up a budget with your children to show them that money is finite.

Re-examine purchases before buying, and put back the ones that aren't on your list or are too expensive.

* Wrapping: "A lot of people overspend here, especially by using the gift-wrap service of a department store. It is handy, but costly," Duguay says.

Buy gift sacks that can be reused. Paper holiday tablecloths are also good for wrapping large gifts.

Buy holiday wrappings and cards after the holidays for next year. You can save more than 50%.

* Traditions: "The best replacement for excessive gift-buying is meaningful activities. If you don't have any family traditions, create some," says Duguay, such as making decorations, going to a holiday concert or ballet, baking cookies for friends or having a family potluck.

* More Tips: Begin shopping in January of next year to take advantage of after-Christmas sales. Continue to buy gifts all year and store them in a gift drawer.

--Compare UPS and Postal Service rates to send gifts by the most inexpensive method. Plan enough time to avoid overnight or express shipping.

--Give gifts to adults on New Year's Day to take advantage of after-Christmas sales.

--Recognize the warning signs of too much debt. Are you running out of money before the next payday and starting to use credit cards for everyday expenses such as gas or groceries? Are you using credit-card advances to pay your bills? Are you borrowing from family or friends? These are common warning signs. So are receiving past-due notices or creditor phone calls. If you are overloaded, it's time to cut back your spending, not add to it.

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