Holiday Shopping Tips

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Justine Bartko Thomas is a contributor to The Brenner Brief. Her columns post on Saturdays.

A recent poll was taken with over one thousand Americans in all different income levels and the outcome may be a bit surprising. It seems that many Americans are still not ready to cope with the financial burden of the holiday season, let alone the stress that goes along with the holidays.

Some Americans will be turning to payday loans, prepaid debit cards and direct deposit advances. People do not realize that even though it is a quick fix to cash flow problems, it mounts to larger problems down the road. Its is imperative to always read small print as finance fees begin to pile on top if the money is not paid back in full within 30 days.

Over a period of time, you will have actually borrowed twice the amount through fees and finance charges. If you’re like most people, you finish paying off Christmas and in a of couple months you’re back to the debt you just paid off if you’re lucky enough to do that.

There are various options that consumers can try to use to stay out of debt. There are layaway programs that can be used as one option — this is a considerably cheaper way to go when you would figure in fees and interest rates borrowing money or even borrowing credit card space. People used to stereotype layaway as a means for the poor, but not anymore — seems we have learned a thing or two about this means of shopping.

Over half of the one thousand consumers polled in the survey who have an estimated income of $75,000 to $99,999 have admitted that they would put purchases on layaway, and 32 percent who earned more than $100,000 said they did.

This year, retailers have waived, and even in some places extended, the timeframe for making payments to entice more holiday shopping.

Financial expert Marc Bacsafra says, “People, for the most part, don’t really have a spending plan in place for the holidays,” said Bacsafra, a financial advisor with Sacramento, California based Fountainhead Wealth. “They usually just think about who they want to buy presents for.” The best plan, he said, is to come up with a dollar amount and divide it among people. Then, stick to the plan.

A more strict approach comes from Dave Ramsey, a financial counselor and an advocate of debt-free living. “The first thing you need to do is look at your budget, and see what you can afford to pay for in cash this season,” Ramsey said. “If you are married, agree on the amount with your spouse. Then, just like Santa, make a list and check it twice.”

“If you buy one extra thing for someone, you have to take away from someone else on your list. Keep that in mind,” Ramsey said.

He also suggests paying off the credit card debt in two installments so as to not to accrue extra finance charges and fees for late and over the limit fees.

With the holiday season fast approaching, hopefully these tips will help the holidays to be a little easier on your bank account and nerves. Bah humbug!

 

 

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