Accumulating too much credit card debt can put you in a tight squeeze long after the holidays, especially if you only pay part of the total monthly.
Here is an example: Consumers spend an average of $1,148 for the holidays.
How many years do you think it would take to pay this off if you charged $1,148 on a credit card with a 16.5 annual percentage rate and paid the minimum on the declining balance?
It would take eight years, or until December 2013, to repay holiday expenditures you make this year. In addition, you could add another $712.77 in interest paid over the eight-year period.
Ideally, you should pay credit card charges off the month the bill arrives. If this isn't possible, pay as much per month as possible to reduce the interest costs.
There are ways to save
These are some budget-saving ideas for the holidays: If estimated shopping costs exceed your budget, consider adjusting the amount of money allocated for people or think twice about including someone on your gift list.
Think of creative non-cash gifts. For example, give someone with small children a "gift certificate for a free night of babysitting."
If you're "handy" around the house, offer to do some minor home repairs. Buy some bulbs and put them in a pot so they'll bloom during the holidays. Give a gift from the kitchen, especially if you're widely known for a certain dish.
To reduce costs, shop at yard sales for special items at very affordable prices.
Take elderly friends shopping and to lunch or offer to run errands for them.
Magazines often have holiday gift specials. Consider giving a subscription related to a friend's hobby or interests.
Invite some friends over to make batches of cookies or other baked goods each of you can give as a holiday gift.
Alternatively, make large quantities of soup, chili, stew or the like and freeze to give as a holiday gift.
Unique hand-mades are special
Give a gift certificate that can be stretched at post-holiday sales. Consider giving children gift certificates specifically for use later on in the year.
Create something unique such as a one-of-a-kind poem for someone, a painting or maybe a song, or a hand-written story. Grandparents could pass on precious written family stories to children and grand children.
Thinking ahead to next year, shop throughout the year so you don't have to pay for everything in one or two months.
If you do buy things ahead of time, just remember where you store them or have a special place or closet in your home for gift storage.
Holidays can be joyful and filled with wonderful memories without ending in debt or over spending. Giving gifts of love is what it's all about, not spending large amounts of money.
For more information on this or any other program, contact the Boyle County Extension Office at (859) 236-4484.
Donna Clore is Boyle County Extension Agent for family and consumer science.