I'm Ron Corning for howdini.com.
You know, holidays are a time for giving and sharing and overspending.
It turns out, consumers do the bulk of their damage to their budgets
during the holiday season, despite their best efforts
to make this year different.
Well, it doesn't have to be that way.
Here to help us prevent our budgets from being mauled at the mall
is financial reporter, Stacey Tisdale.
She's the author of The True Cost of Happiness.
Hi, Stacey.
Hi, Ron.
Thanks for being here.
Yeah, we do go into the holidays with the best of intentions.
We want to give.
We want to share.
It's better to give than to receive, and yet, really what's behind it
is something a lot different, right?
You know, the biggest factor behind holiday overspending
is guilt. People really need to sit down and ask themselves, is buying my kid
the latest hot gadget or this new pair of sneakers
going to make up for the fact that I feel badly that I
don't spend enough time with them?
The key is to be aware of how these influences are working on you
and literally give yourself permission to not buy into them.
There's just better ways to spend your money.
Is spending all this money on toys, gadgets,
and all of these things really going to help you achieve your overall goal?
You know, recently I was helping a very underprivileged family raise
money for holiday spending last year.
And this woman got $200, and she had four children, single mother.
We said, OK, what do you want to do with the money?
Could have been buying food, buying clothes, and she said an Xbox.
And that made perfect sense when you look at the social pressure
out there that, you know, good kids have this.
Good parents give their children these things.
So you're right, it's really important to be
aware of how those influences are working with you
and keep your eye on your bigger goals.
Let's be realistic though, I mean, you need to strike a balance.
On the one hand, you don't want to overspend.
On the other hand, however, you're going to feel
compelled to give to your family and give to friends.
I always tell people, don't spend more on the holidays
than you can pay back in one month.
You're still going to get that credit card bill.
Your other bills are still going to have to be paid in January.
And also, if you have credit card debt, use a debit card,
and what you can't afford on that debit card, you simply can't afford.
I get the impression that how we spend during the holidays
really puts a spotlight, in general, on our relationship with money.
It's intensified, and yet, really there's
something there underlying that we need to look more closely at.
There's a lot more to our financial choices than dollars and cents.
People value themselves with the spending choices they make.
You see reflections of how they grew up with the spending choices they make.
The holidays just amplifies this, and we see
that, you know, people get so emotional about their spending and the things
that they feel that they have to give.
But think about it, would you feel slighted
if say, a relative gave you time or babysitting or cooked you a meal
instead of buying you, you know, some expensive sweater?
Really think about what they mean and put that meaning back into your gifts
and seriously know what you can afford.
I'm thinking if someone gave a donation to an organization in my name,
part of me is going to feel like, well, that's interesting.
I didn't get a gift.
But yet, we have to examine then the fact
that somebody is giving something in my name
and giving's really what it's all about.
It's a two-way street.
You can reach out and give to a charitable organization
in someone else's name, and hopefully, in that, there's
a lesson for that person.
You can go on the internet and find sites that, you know,
when you buy toys or something at these sites,
the money goes for breast cancer research.
Put some meaning into your gifts.
That's what the holidays are all about, and there's endless ways to do that.
All right let's run down-- let's leave people with some points
to start the new year right.
You say, begin starting early saving for next year.
A Christmas club, it sounds old-fashioned.
My mom has one.
They work, right?
Christmas clubs are great.
You know, all kinds of holiday clubs are great,
and the really good news about those is that you can start them yourself.
You can allocate money, you know, to put aside for next year.
And also, really examine your spending.
Create a budget and go through your spending and look for areas.
Can I reduce this by 75%, 50%, 25%?
And put that towards debt reduction.
We also want to let people know at debtorsanonymous.com,
there's a quiz there that will really help
you determine if you have a problem overspending,
not just during the holidays but during other times of the year.
So that might be a place to start, sort of a litmus test.
And start a New Year's budget.
When you say a New Year's budget, you mean everything
from beginning to end, not just what you're going to spend at the holidays.
Exactly, New Year's is a great time to really examine your finances,
think about what's important to you, see how your money's paying in the equation
that you're spending on things that really aren't bringing you
that much joy and happiness.
Good time to reallocate, and if you stay focused
on what it is that you really want and how
your spending plays into that equation, you're going to stay on track.
Stacey, thank you.
We appreciate it.
Stacey Tisdale is the author of The True Cost of Happiness, The Real
Story Behind Managing Your Money.
You can find out more by going to her website, truecostofhappiness.com.
I'm Ron Corning for howdini.com.