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Simple ways to curtail holiday spending


Adults looking to curtail their holiday spending can agree with relatives to only purchase gifts for children.

The holiday season is synonymous with many things, including spending. Spending money is an accepted part of the season for many celebrants, who exchange gifts with loved ones, travel to see family and friends and host holiday parties this time of year. None of those things comes without a cost, and for some consumers, curtailing those costs is an early New Year's resolution.

Part of the danger of holiday spending is that many consumers are already in debt before the season even begins. In a holiday report issued prior to the 2012 holiday season, TransUnion, one of the three main credit reporting agencies, noted that the average credit card debt per buyer in the United States was just under $5,000. That means the average consumer began last holiday season having already accrued a significant amount of credit card debt. Though it might seem impossible to rein in holiday spending, there are ways consumers can do just that and still enjoy a festive holiday season.

* Propose a gift exchange. Many families exchange gifts during the holidays, but there are ways to make such exchanges less expensive. Instead of a traditional exchange in which every member of the family buys a gift for everyone else, propose an exchange in which family members pick names out of a hat and only buy a gift for the person whose name they draw. This saves shoppers time and money, and families still get to enjoy the thrill of putting a smile on a loved one's face.

* Don't purchase extended warranties. Big-ticket items like televisions and other household appliances make for popular gifts come the holiday season. When purchasing such items, shoppers are often asked by a salesperson if they want to purchase an extended warranty. In theory, extending the warranty seems like a great idea, acting as a safety blanket should something happen to the item down the road. But many appliances already come with a manufacturer's warranty, and extended warranties often just duplicate coverage already provided by the manufacturer. Some might still be hesitant to pass on the extended warranty, but it's important to know that many extended warranties often defer to the manufacturer's warranty, so you may very well be paying, and paying a lot, for something you are unlikely to ever use.

* Only buy gifts for children. For many adults, the joy of the holiday season comes not from receiving gifts but from the opportunities to spend time with family and friends. So rather than buying adult friends and relatives gifts, propose that adults only buy gifts for the kids in the family. This saves adults time and money, and the youngsters still get the joy of unwrapping gifts come the holiday season.

* Avoid signing up for store credit cards. When shopping at major retailers, consumers are often asked if they want to sign up for store credit cards, an offer that seems all the more enticing when store representatives dangle an immediate discount between 10 and 20 percent just for signing up. Though it might seem like a great deal, instantly earning as much as 20 percent off your purchase, signing up for store credit cards is not always in consumer's best interests. That's because store credit cards tend to come with steep interest rates, meaning consumers must be able to pay off their balances immediately, or they will be forced to pay interest charges that could dwarf the initial savings earned upon signing up for the card.

* Give gift cards. Gift cards may seem impersonal, but they can save shoppers money while allowing recipients to truly get something they want. Shoppers on strict budgets can purchase a gift card that fits into that budget, removing the temptation to spend a few extra dollars when they find the perfect gift that costs a few dollars more than they had initially budgeted. In addition, gift cards are great for distant relatives, as they can be included in greeting cards, saving the added expense of shipping.

The holiday season and spending seemingly go hand in hand, but there are ways for consumers to cut costs this holiday season.