Beware The Holiday Shopping Abyss
Sunday, December 12, 2004SUSIE GHARIB: Now that we`re in the thick of the holiday shopping season, some food for thought as you`re happily spending. Debt specialists point out that 54 percent of us are still paying off last year`s gifts. Add on all the new purchases this year, and, well, you get the picture. Tonight, some words of wisdom from our home economist Brett Graff on how to prevent another post holiday hangover.
BRETT GRAFF, NIGHTLY BUSINESS REPORT CORRESPONDENT: Ah, the crisp air of the holidays, throngs of people filling the malls, lines at the registers and near chaos in the parking lot. Everyone driving themselves crazy finding those perfect gifts. But how do we stop all this holiday cheer from sending us into near bankruptcy? Most of us are already carrying revolving debt anywhere from $2,500 to $8,000. So convincing ourselves, no, no, no, I`ll be sensible this year really!" is likely just a few credit card swipes away from another broken financial new year`s resolution.
UNIDENTIFIED WOMAN: Whatever I see I want to buy I`m going to buy.
GRAFF: And that`s fine or are you going to regret it in January?
UNIDENTIFIED WOMAN: I`ll regret it in January like I always do every year.
UNIDENTIFIED MAN: It`s a big budget every year that gets bigger and bigger and bigger at 20 percent credit.
GRAFF: Do you have a budget?
UNIDENTIFIED WOMAN: My husband does.
GRAFF: Do you follow the budget?
UNIDENTIFIED WOMAN: No but he doesn`t know that.
GRAFF: Now here`s what home finance guru`s suggest. Agree on a limit with gifts for your family or buy something small, but personal and include a handwritten note or buy a token gift and surprise them with the real present once all the big sales start after the holiday. And my personal favorite, buy only things that fit into the Christmas stocking.
UNIDENTIFIED MAN: I have teenage girls. They`re way past that trick right now.
GRAFF: The National Retail Federation, which clearly did not include my husband in its research, predicts the average American adult consumer will spend $700 on gifts this holiday. And Cardweb, which monitors credit card spending, anticipates most of that shopping will end up on our plastic, $130 billion worth. Despite our best efforts, those ho-ho-ho`s will turn into no-no-no`s come January. So let`s admit the red we`ll be seeing won`t just be the glow of the lights we never took down. And after it`s over and the "had to have it" hangover is pounding, now what? Here`s some advice from debt specialist Howard Dvorkin.
HOWARD DVORKIN, FOUNDER, CONSOLIDATED CREDIT: The first thing you do is you need to sit down at the kitchen table and go through and spread out your bills and on a piece of paper, write down who you owe, what you owe, what the interest rates are. That`s the first step, knowing where you are. Then you can device a plan to get yourself out.
GRAFF: So when you hear the holiday music piping through those retail speakers and you`re overcome with the warmth of holiday giving, remember, the chill sneaking through is likely from those impending January bills. Brett Graff, NIGHTLY BUSINESS REPORT, home economist.
