The holiday season is here, and that means figuring out a budget for presents. That can be tough at any time, but it’s especially difficult — and important — given this year’s slack economy.
The first thing, obviously, is to stay within your means: Don’t give gifts you can’t afford. But that can be easier said than done. If you need to get the most out of your holiday shopping buck, it helps to have a strategy. And as the Houston Chronicle points out, ATMs are a useful part of that strategy.
Their first tip: Shop early. You’ll get better selection and prices, especially on end-of-summer closeouts.
Their second tip: Rely on cash.
Shop only with cash this year. Credit card interest rates are going up in anticipation of a new credit card law that restricts how and when card issuers can raise rate. If your rates have gone up and you don’t pay off the balance every month, your Christmas debt will last longer in 2010 than it did this year. Cash also helps you stay within your budget because when the dollars are gone, that’s it. Trekking to an ATM to take out more cash gives you a long pause in your shopping that you can use to talk yourself out of overspending. That kind of break in the action doesn’t come when you are writing checks or swiping credit cards.
Use layaway plans. This will help you stick with the cash-only edict by allowing you to put aside items in layaway until you can pay them off in installment payments. There tends to be a small flat fee for using the service. Major retailers that offer layaway options include Burlington Coat Factory, Marshalls, T.J. Maxx and Toys R Us. K-Mart and Sears are also providing online layaway programs. It also doesn’t hurt to ask local small business owners if you can set up a pre- and post-holiday cash payment plan for big-ticket or one-of-a-kind gifts, such as jewelry, art work and treehouses.
Give cash. Cash is freedom. Your loved one can use it for whatever he or she really needs — which may be to pay rent, a utility bill or catch up on a debt payment. Your child’s teacher can use money more easily than a gift card to a coffee chain or restaurant.
So put away the credit card — and its temptation to pay just a little more, or buy just one more thing. Decide how much you’re going to spend, take out that much money, and either buy presents for cash or give the cash itself as a gift. You’ll be happier, the recipients will be happier, and you won’t face that post-Christmas hangover when the bills arrive.
