by Stacy Francis, CFP®, CDFA
I read an excellent Suze Orman article last night, and thought I should share. Use these five easy techniques, and it will make all the difference this holiday season.
- Consider credit card interest rates. If you plan to pay off your holiday shopping slowly over time, you need to double each dollar you charge in your head to get an idea of the real damage.
- Be boring. Before you hit up the mall (or go online), make a list or a spreadsheet tracking your budget, the people for whom you are shopping, and how much you can afford to pay for each gift. Whenever you buy something, deduct the price from the grand total to find out how much money you have left.
- Reject store cards. Not only will the discount tempt you to spend more – by the time the bill shows up, you will have forgotten all about it and be in it for a cold shower.
- Stay clear of the gift card trap. For instance: someone gives you $100 at Nordstroms. You seize the opportunity to snag the Prada boots of your dreams for $100 cheaper, even if you end up contributing a couple of hundred from your own stash. This is a real killer. If your gift card is $100, spend $100 and not a dime more. That way, whatever you choose from the store remains a gift.
- Lastly, and most importantly, remember that even though so many of us try, when it comes down to it, we cannot buy love. Your family isn’t going to love you more because you spend another $50 – on credit and that you can’t afford – on their gifts. If you are in a financial crunch, tell them. You will know they love you back when they say they understand and want what’s best for you.