Seven Ways to Avoid a Holiday Spending Hangover

ABA offers consumer spending tips for the holiday season

WASHINGTON, Nov. 5, 2013 /PRNewswire-USNewswire/ -- As retail stores kick off their holiday shopping deals, the American Bankers Association is encouraging consumers to plan ahead so they do not find themselves in the red to start the New Year.

"Being a savvy shopper is a vital way to avoid the debt of Christmas past," said Gov. Frank Keating, CEO of the American Bankers Association. "A little advance planning can prevent a financial hangover when the bills arrive in 2014."

Below are some holiday spending tips from ABA to help consumers have a financially happy New Year:

• Plan ahead. Before you start shopping, develop a realistic budget. Consider your income, subtract your normal monthly expenses, and then add any savings to whatever cash is left over. If you need to use your credit card, think about what you can afford to pay back in January.
  
  
• Keep track of other costs. Don't forget costs beyond gifts, like postage, gift wrap, decorations, greeting cards, food, travel and charitable contributions.
  
  
• Make a list and check it twice. Keep your gift list limited to family and close friends, noting how much you want to spend on each.
  
  
• Shop early, spend carefully. Avoid shopping while rushed or under pressure, which can lead to overspending. Make sure to comparison shop online first, or download an app that lets you compare prices before you buy anything in a store. Before you head to the cashier (or online checkout), make sure your purchase is within the budget you set.
  
  
• Avoid traps. Finding a spectacular sale on something you've been wanting can easily throw you off course. Stay strong and stick to your budget. And don't apply for store credit cards you don't need just to get a one-time discount.
  
  
• Use credit wisely. Limit the use of credit for holiday spending. If you must use credit, use only one card, preferably the one with the lowest interest rate, and leave the rest at home. Pick a date when you can pay off your holiday credit card bills, and commit to paying off the balance by that time. Be sure to check statements for unauthorized charges and report them immediately.
  
  
• Save your receipts. Not only will you need them for possible returns, you'll need them to keep track of what you've spent and to compare with your credit card statement. Knowing how much you spent will help you plan for next year, too.

Banks are committed to helping consumers responsibly handle credit and save for the future. 

"Many banks offer customizable savings plans such as Christmas accounts that let you set aside money throughout the year for your holiday spending," said Keating.  "If you don't have a savings account already, make it your New Year's resolution to open one." 

SOURCE American Bankers Association

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