Small Town News

Stay in control of holiday spending

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Even in the middle of a U.S. economic crisis and with consumers supposedly cutting back on their spending, retail research suggests that U.S. consumers spend more than 100 billion dollars on holidays throughout the year. More than half of that spending occurs in November and December. Consumers will likely spend money for end of the year holidays and many will likely overspend. Now is the time for a holiday spending plan!

The main function of a spending plan, holidays or otherwise, is to take control of your money. Unfortunately, many people do not always understand how to effectively handle their "first line of control" of spending. Here are some control strategies:

Spend less money than what is earned.

Spend to meet needs and wants not just to get a "bargain" or "good deal." (Needs sustain life - shelter, food, clothing, transportation, health. Wants usually make life more comfortable.)

Spend without being influenced by social pressures, for example making purchases just to "keep up with the Joneses."

Spend without being influenced by personal feelings - especially guilt feelings.

Spend so that money goes for the purpose to which it was intended.

Simply put, a spending plan shows how money (cash income) will be used (expenses) for a given time, usually a month. Put holiday spending on your plan now to show how household income and expenses could be affected.

With die spending plan in place, ask yourself, "How will we handle the variety of strategies used by stores to influence holiday spending?" Common store strategies that influence and often increase consumer spending include lay-away plans; short-term shopping club memberships; deferred billing on credit accounts; increased discounts with credit purchases; increased discounts with new credit accounts; weekly/bi-weekly sales promising low prices, and/or limited editions of certain products.

These strategies and high-pressure sales people often cause consumers to change their "planned" holiday spending decisions, resulting in over-spending. Over time, unplanned spending will likely add to current debt if consumers do not exercise control measures when shopping. The most successful control is to spend money in amounts that are affordable to one's income. Spending plans will vary from household to household, tiiere is no right or wrong way to plan, just balance income with expenses. Planning may take some time but it will be the best way to help you make positive choices and achieve financial stability.



Copyright 2009 Tri-County News, Kimball, Minnesota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2010 Tri-County News Kimball, Minnesota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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