Basic steps for setting up a holiday spending plan: Consider your income. Your maximum Christmas budget should be 1% of after tax income. ie. $50,000/yr - $10,000 taxes (20%) after tax= $40,000……….1% = $400 Average family spends $795 each Family with 2 adults = $1,500 Close to 4x the recommended amount
Estimate Extra Holiday Expenses Small purchases start to add up, especially over the holidays. Use attached spreadsheet to list all expenses associated with the holidays such as wrapping paper, shipping, decorations, etc. Gifts : Make a list of who you want to buy presents for and the amount you plan to spend for each Decorations : Take stock of what you already own and prioritize any additional items you want to purchase Travel : If heading out of town, don’t forget to include pet care and vehicle preparation costs. Include extra in the budget for weather-related emergencies (ie. Flight cancelations, road closures due to snow, etc.) Charitable Donations : Plan which causes you want to make holiday donations to Reevaluate your budget several times Work the cash available and projected spending plan until the numbers balance. Check regularly though out the holiday season to make sure that you are staying on target. Rebalance the plan if necessary if you find you are spending less in some areas and more in others. Watch to see that you do not get drastically off budget, there will be many temptations to splurge and buy during the holiday season. Remind yourself of the end goal: a happy holiday season without the dread of bills due come January 1 st .
Tips For Smart Shopping 1. Shop around. A sale price isn’t always the best price. Some merchants may offer a sale price on the item you want for a limited time; other merchants may offer items at discount every day. 2. Look for price-matching policies. Some merchants will match, or even beat, a competitor’s prices. 3. Go online. Check out websites that compare prices. If you decide to buy from an online merchant, keep shipping costs and delivery time in mind. 4. Carefully consider bargain offers that are based on purchases of additional merchandise. For example, “Buy One, Get One free” or “Free Gift with Purchase”. If you don’t really want or need the item, it’s not a deal.
5. Clip coupons. Coupons are useful when they save you money on what you’re already planning to buy. Check coupons for any restrictions. For example, do expiration dates apply, or do you have to spend a certain amount before you can use the coupon? 6. Ask about sale adjustments. If you buy an item at regular price and it goes on sale the next week, can you get a credit or refund for the discounted amount? 7. Consider layaway. Layaway purchase plans are designed for people who want to buy merchandise without using credit or paying the full price immediately. When you use layaway, you typically make a deposit – usually a percentage of the purchase price- and pay over time until you have paid for the item in full. In exchange, the retailer holds the merchandise for you. To avoid problems, get the store’s layaway policy in writing. 8. Keep an eye on your wallet. Don’t flash cash. Keep an eye on your credit or debit card during transactions, and get them back as quickly as possible. If your cards are lost or stolen, report the loss or theft immediately to the card issuer.
9. Use credit and debit cards with care. Save your receipts. You need them for returns and exchanges. Check credit and debit card sales and return receipts against your monthly bills and statements, and report any problems to the credit card issuer promptly. 10. Ask about refund and return policies. Many merchants may have different refund and return policies for sale items. For example, clearance merchandise may be on final sale, meaning no refunds or exchanges. 11. Keep good records. Whether you’re ordering by mail, phone, or online, it’s important to keep detailed information about the transaction, including your order number, shipping costs and dates, warranties, and refund and return policies. 12. Ship early. If you’re sending gifts to out-of-towners, factor in extra time for shipping. If you wait until the last minute, you may pay a hefty price for express or overnight shipping.
Online Shopping Safety Tips: 1. Protect your computer. A computer should always have the most recent updates installed for spam filters, anti-virus and anti-spyware software and a secure firewall. 2. Shop on trustworthy websites. Shoppers should start with BBB to check on the seller’s reputation and record for customer satisfaction. Always look for BBB seal and other widely-recognized “trustmarks” on retailer websites and click on the seals to confirm that they are valid. 3. Protect your personal information. BBB recommends taking the time to read the site’s privacy policy and understand what personal information is being requested and how it will be used. If there isn’t one posted, it should be taken as a red flag that personal information may be sold to others without permission. 4. Beware of deals that sound too good to be true. Offers on websites and in unsolicited e-mails can often sound too good to be true, especially extremely low prices on hard-to-get items. Consumers should always go with their instincts and not be afraid to pass up a “deal” that might cost them dearly in the end.
5. Beware of phishing. Legitimate businesses do not send e-mails claiming problems with an order or an account to lure the “buyer” into revealing financial information. If a consumer receives such an e-mail, BBB recommends picking up the phone and calling the contact number on the website where the purchase was made to confirm that there really is a problem with the transaction. 6. Confirm your online purchase is secure. Shoppers should always look in the address box for the “s” in https:// and in the lower-right corner for the “lock” symbol before paying. If there are any doubts about a site, BBB recommends right-clicking anywhere on the page and select “Properties”. This will let you see the real URL (website address) and the dialog box will reveal if the site is not encrypted. 7. Pay with a credit card. It’s best to use a credit card, because under federal law, the shopper can dispute the charges if he or she doesn’t receive the item. Shoppers also have dispute rights if there are unauthorized charges on their credit card, and many card issuers have “zero liability” policies under which the card holder pays nothing if someone steals the credit card number and uses it. If you are going to shop on classifieds web sites like craigslist, never wire money and only buy locally. 8. Keep documentation of your order. After completing the online order process, there may be a final confirmation page or the shopper might receive confirmation by e-mail. BBB recommends saving a copy of the web page and any e-mails for future reference and as a record of the purchase. 9. Check your credit card statements often. Don’t wait for paper statements; BBB recommends consumers check their credit card statements for suspicious activity by either calling credit card companies or by checking statements online regularly. 10. Know your rights. Federal law requires that orders made by mail, phone or online be shipped by the date promised or, if no delivery time was stated, within 30 days. If the goods aren’t shipped on time, the shopper can cancel and demand a refund. There is no general three-day cancellation right, but consumers do have the right to reject merchandise if it’s defective or was misrepresented. Otherwise, it’s the company’s policies that determine if the shopper can cancel the purchase and receive a refund or credit.
. Online Holiday Scams: 1. Quizzes, polls and contests. The promise of something for nothing is a classic ploy of con artists. Ignore such offers or go directly to a company’s Facebook page or website to verify if offers are legitimate. 2. Auctions and deals too good to be true. Remember the old saying “if it sounds too good to be true, it probably is”. Before considering any deal, check the seller’s ratings and reviews on the selling site. Be extra cautious. Some fraudulent sites may even imitate a Better Business Bureau seal to throw you off. You can verify BBB approval at bbb.org. Never pay by wire transfer, a surefire indication of a fraudulent sale. 3. Phony charities. Scammers take advantage of your good nature by asking for donations right after natural disasters or during the holidays. Check that a charity is legitimate at the BBB Wise Giving Alliance or the American Institute of Philanthropy. You can always donate directly via a charity’s website too. 4. Malware-ridden holiday cards and programs. Animated greetings, seasonal screensavers and winter-themed games become popular this time of year. Many of these programs are accompanied by spyware and other malicious technology. A good anti-malware product – try McAfee, Norton, Kaspersky or Avira – will stop virtually all of this stuff in its tracks. Your best bet is simply to not open any e-mail – even from a loved one – that contains a forwarded greeting card or holiday game. Get extra protection by ensuring your computer software updates are downloaded and applied automatically. 5. Vacation homes not really for rent. The up-and-coming scam is surprisingly simple. Fraudsters set up a “vacation rental” site for a real home (complete with photos) and they rent it out for weekend and holiday getaways. He problem: the scammer doesn’t own the house and it’s not actually for rent much to the surprise of both owner and renter come arrival day. Use trusted travel sites and rental agencies when booking. Low resolution photos of the home and super low rental prices are also a giveaway that something is awry.
Mistakes to Avoid: Don’t underestimate what you spend. A holiday budget helps give perspective on what you think you spend versus what you actually do spend. Guilt seems to be the biggest source of overspending. Avoid: 1. Homemade gift guilt: buying a “real” present after spending time and money on homemade items 2. Equalizing to excess: trying to give equal numbers and equal value of gifts can leave you broke 3. Surprise-gift guilt: receiving an unexpected gift causes many to run out and buy something quickly without regard to their budget limits
Putting off holiday shopping may cost you more in the long run with: 1. Last minute shopping frenzy: forget the thought and the price tag, time’s almost up and you grab anything 2. FedEx folly: waiting to send that $15 picture frame could end up costing you $40 in shipping fees
Excessive holiday spirit can turn into a financial crime of passion….an insane impulse overcomes you… holiday joy?...the spirit of Santa?... whatever it is results in: 1. Debt of 1,000 gifts: buying gifts and small tokens of appreciation for everyone who has crossed your path 2. Parental panic: when you see the pile of gifts for your children, you don’t think it’s enough so you end up throwing caution to the wind and buy more so that there is no bare spot under the tree 3. Manic Perfectionism: trying to do it all…the holiday party, catered dinner, holiday plays, special events and leaving no nook untouched by holiday décor
Miscalculations of volume, time or value such as: 1.Shopping by the truckload: buying everything in sight whether at the mall or warehouse store because there is so much to choose from and thinking you’ll decide later who gets what 2.The 12 days of shopping: You can’t find the right thing for someone so you pick up a pair of earrings for the time being, and then some gloves … and before you know it you have a handful of gifts, and none of them are quite right 3. Arts & crafts fair amnesia: after you run around doing all your shopping you realize that you bought gifts for everyone in July at the arts & crafts fair so that you wouldn’t have to make this mad dash… now where did you hide them?
Personal Safety When Shopping: 1. Shop during daylight hours whenever possible. 2. Know exactly where you park your car. 3. If shopping at night, park in well-lit areas. 4. Avoid shopping alone. 5. Carry keys, cash and credit cards separate from each other and be constantly paying attention to your surroundings. 6. Avoid carrying large amounts of cash. If possible, avoid carrying a purse. Use a fanny pack or deep pockets to carry wallet. Limit the number of credit cards that you carry. 7. If you have to carry a purse, carry it close to your body and always zipped or snapped. 8. Be aware of strangers “accidentally” bumping into you. Pick-pockets use this as a diversion. 9. Avoid carrying large packages that block your vision and make you a target for thieves.
10. Avoid shopping until you are exhausted. You are more alert when you are less tired. 11. When hurried or in a crowded shop, make sure you get all forms of identification and credit cards returned to you before you leave. 12. Leave the mall/store well before closing time. This way, there is a greater assurance you will walk out with other people. There is safety in numbers. 13. Use an escort or mall security if you have too many packages or if you are leaving the store after closing. 14. Be alert while walking to your car. Check under and around your car as you approach it. After checking your car, lock it immediately upon entering. 15. If you see a van parked next to your car, you can choose to enter your car through the passenger side. 16. Avoid using automatic teller machines at night and remember to keep others from observing you type in your PIN.
Holiday Spending Tool AFSAEF (American Financial services Association Education Foundation) interactive online calculator: www.afsaef.org/HolidaySpending.cfm Resources : Consumer Reports, FTC, BBB, USAA, West Springfield Police Weekly Bulletin, AFSAEF, M.P. Dunleavy
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