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									                                   Holiday Time: How to Not Get into Debt

Does this sound familiar? You use credit cards to do your holiday shopping, promising yourself you'll pay the debt off
within two or three months. One year later (or more), you're still paying, and those items that seemed like such bargains
end up costing you 10 to 30% more than you thought, due to credit card interest.

For many Americans, this debt pattern is repeated year after year. Personal finance experts call this the "holiday
hangover." There are times when incurring credit card debt makes sense, but holiday gift-buying is NEVER one of them.
Using credit cards often leads to impulse spending, overspending, and increased debt. Relationship conflicts also result
from such unwise decisions.

A better approach is to not use credit cards! Instead save small amounts of money throughout the year in a special
holiday gift fund, make a list of all the people you'd like to give gifts to and how much you can afford to spend on each
one, and pay cash. When the cash is gone, you're done shopping.

If you find it difficult to save money throughout the year, join an old-fashioned Christmas Club, still offered by smaller
community banks and credit unions. You put so much a week (a manageable amount), often deducted automatically
from your paycheck, into a special Christmas Club account at your bank. The account usually earns interest at the regular
savings account rate. In October, November, or December, the money gets transferred to your regular checking account
and you're ready to go shopping!

Okay, you didn’t do that. Now what do you do? Here are some simple steps to help you stay out of debt this holiday
season and avoid that financial "holiday hangover."

First, set a budget now.--Look at your monthly budget and figure out how much you can realistically afford to set aside
towards holiday gift giving, without going into debt. Your intentions may be good, but the reality is that most people
have a depressing amount of debt after the holidays and are not able to pay it off in as timely a manner as they had
hoped. Keep your gifts simple and do not give in to feelings of guilt and manipulation by others, even your own family!
Keeping your family out of debt is far more important than a temporary gift that will be forgotten by January 15.

Second, lists help. Make a list of all the people you need or want to buy gifts for, including small gifts for babysitters,
teachers, newspaper deliverers, etc. These small gifts can add up and are often the cause of going over your gift budget.
Include money you'll spend on Christmas cards, postage, holiday parties, decorations, holiday entertainment, etc. So,
consider gifts that do not cost money, but are just as sincere: a sincere letter of gratitude with a simple craft you have
made, a small gift of your time at a later date.

Third, set a limit--Decide how much you will spend on each person on your gift list, then add everything up and make
sure it doesn't exceed your overall spending limit. Try to allow a cushion for unexpected items or price fluctuations. If
you cannot afford it, don’t do it.

Fourth, decide where to shop--As important as deciding what you're going to buy is deciding where you're going to
buy it. If you don't wait until the last minute, you'll have time to comparison shop. Prices fluctuate significantly from
store to store and from one month to another. Stores start cutting prices 10 to 25% on holiday items like decorations,
gifts, and winter clothing the week before Thanksgiving (4th Thursday in November). As Christmas approaches, some
items are marked down as much as 40% but selections are limited. You'll need to decide whether price or selection is
more important to you and time your shopping accordingly.

Follow these simple steps and you'll avoid the nagging feeling that you've overspent on Christmas or other
holiday gifts. You'll also avoid the struggle to pay off the credit card bills for months to come. Instead you'll
feel in control and free of the dreaded financial "holiday hangover."

                                               Gil Garcia, MSW, Therapist
                                             (866) 903-6000 (906) 864-22208

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