As shoppers get into the spirit of giving, it's often easy to throw that holiday budget out the window.
"Some people get into the trap of using their credit cards (over the holidays) and then spend the whole year trying to pay it back. That's not a good thing," said Mike Pobst, president of Alliance Bank in Sikeston.
But financial experts insist there are several things consumers can do to ensure they won't be entering 2005 with stacks of credit card statements arriving in their mailboxes.
For this reason, many area banks offer Christmas Club accounts, which enable consumers to save for their Christmas expenses throughout the year, Pobst explained.
"By using Christmas Clubs, they don't have to try to come up with a large bulk of money and can plan throughout the year how much to spend," Pobst said. Financial counselor Donna Taylor said she's also a fan of using Christmas Clubs -- and layaway.
"Layaways work very well for people and are an enforced discipline because they can't get that item out until it's actually paid for," Taylor noted.
Planning ahead is also essential, said Taylor of Financial Fitness Services in Sikeston.
"First of all, they should make a list and budget for each person they plan to buy for," advised Taylor. "Then shop with cash, if possible. Just take enough cash to cover what's budgeted. There's less danger because there are more victims of crimes from credit card fraud than from using cash."
Using cash is the ideal way to pay for Christmas gifts -- unless the consumer is very self-disciplined, Taylor said. "The amount you should charge on your credit card is how much you can pay off at the end of the month," Taylor said. "That's the bottom line."
Another thing to remember is will the items last longer than the payment does, and it can take as long as 18 years or more to pay off a $1,000 credit card debt, Taylor pointed out. And if it's a major purchase, always sleep on it, she added.
Comparison shopping and last-minute shopping are good ways to find real bargains, Taylor noted.
Other suggestions include:
-- Give gift cards. They're very reasonable, although some people think they're not personal, Taylor said. "But you might not waste money because you know they will get something they like. Plus there are bigger sales after Christmas than before, and it's a good value to them -- and there's no cost to wrap it."
-- Give gifts of themselves. "If you have an elderly parent who needs some jobs done, then offer your help," Taylor said.
-- Stay focused and keep close tabs on your spending and compare your actual costs to your budget. Keep a running tally of how much you're spending and how close you are to your limits. When you want to splurge by ignoring the fact that you can't afford something and putting it on your credit card, avoid the temptation.
"The rule of thumb is that your debt should be no more than 30 percent of your credit limit. Otherwise, creditors may view it as excessive debt and be concerned you may not be able to pay as agreed," said Maxine Sweet of Experian, a company that provides consumers with information and products to help them understand, manage and protect their personal credit profiles.
-- For those who can't afford to buy gifts for the whole family, consider suggesting that the family draws names this year and buys for just one person, instead of getting gifts for siblings, their spouses and their kids. Similarly, start a grab bag tradition among friends in place of buying gifts for everyone.
-- Monitor your ATM and charge cards. "Identity theft is on the rise and the busy holiday season is prime time for this type of crime," cautioned Sweet. "Don't be an easy target. Pay extra attention to your cards and receipts. Check your monthly statements for any inaccuracies or fraudulent activity."
If you carry a monthly balance, consider consolidating your debt on the card with the lowest interest rate.
-- Giving a charitable contribution in honor of your friends or family is really two gifts in one -- the charity gets a much-appreciated donation, and the honoree gets the satisfaction of knowing they've made a difference.
A little willpower can go a long way this season -- even for the weakest shopper, Taylor reminded.
"The problem is there's no magic to it," Taylor commented. "It's all about discipline. That's the hard part. Everyone wants a quick fix -- but it's about discipline. And if we can get through (the holidays without any debt), it definitely will make us feel more peaceful."
ARA Content contributed to this article.