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Spend smartly on holiday gifts

Here are some tips to help you avoid a debt headache after the Christmas shopping season.

December 04, 2011|By Scott J. Wilson, Los Angeles Times
  • A window display at the Free People in the Americana at Brand shopping center in Glendale.
A window display at the Free People in the Americana at Brand shopping center… (Ricardo DeAratanha, Los…)

Americans spend hundreds of billions of dollars buying gifts during the Christmas season. Inevitably, some people get carried away by the excitement of the season and spend more than they can afford. Here are some tips to make sure you don't end up with a debt headache after the holidays.

Budget: "Spend no more than 1.5% of your household annual income on holiday gifts and entertainment," suggests Practical Money Skills, a website operated by Visa. The site offers a holiday budget calculator at http://www.practicalmoneyskills.com/holiday.

List: Make a list of every person for whom you want to buy gifts. With that in hand, you can make best use of "two for the price of one" offers and similar deals.

Research: Check prices and product reviews online, even if you plan to buy in person. "Not only will you save time by researching ahead of time, you'll also save money on gas by not driving all over town," the National Retail Federation notes.

Start early: "Waiting until the last minute to buy presents increases the chance you'll overspend in order to get a gift — any gift — in time," reads one of the tips on the Practical Money Skills site.

Don't delay credit card payments: "Some companies mail offers to skip a payment on an existing loan or credit card during the holiday season," Consumers Union said. But interest may continue to accumulate. "Skipping a payment generally just means that it will take you longer to pay off the account."

scott.wilson@latimes.com

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