EXTENSION REPORT

Money Smart for the Holidays

It’s that time of year again for gift giving. Have you ever opened your credit card bill in January  with great uneasiness and was surprised at how much you had spent for the holidays? You knew you went overboard trying to satisfy all of the wants of family and friends. That is no way to live! Today we can show you how to happily sail through the holidays and post-holiday billing periods with peace of mind. People often throw away their budget during the holiday season. It is not how much you make but what you do with it that counts. We have to learn to spend less than we earn instead of spending more than we earn. People often throw away their budget during the holiday season. Economists are predicting that consumers will buy more gifts than usual in order to show their loved ones how much they care about them. Organizing your monthly statements and setting up your financial filing system is the first step to take before making any major financial decisions. It is important to determine where you stand now before you start your holiday shopping.  Before making any purchase over one hundred dollars wait a day and if you really want the item, then you'll go back to the store and buy it. But there will be times when you will decide not to purchase it and save yourself one hundred dollars or more. Take control of your money. We know that you can’t eliminate every indulgence that might enhance your life but everyone has some purchases they could reduce. This year keep track of your spending by keeping a spending diary and writing down each expense. You’ll begin to see how little things add up. Only pay cash because it ’s at lot harder to hand over cash than a credit card. Unless you can pay the balance off within the next one or two billing periods leave the plastic at home. Money management isn't just about dealing with what's coming up; it's also about controlling finances every day. Learning to recognize where your money is going from day to day can help you reach your financial goals.

When it comes to savings, American's have one of the lowest savings rates of industrialized countries. Maybe that is because we buy excessively with our hearts, not taking into account our monetary health.  But that isn't the only reason. We often end up buying more than we can afford because we don't really have a clear picture of what we can afford. A recent financial survey showed that 45% of people do not follow a budget. This isn't surprising considering that this same survey said that 55% of parents roll over their credit card debt every month. Christmas savings clubs at local financial institutions can help reduce some of the financial anxiety we feel during the holiday season, but by having a regular system of saving can put you in a better position to deal with some of life’s unexpected events and help with holiday expenses. But discipline is required to save an amount that you will not constantly withdraw from on a weekly or monthly basis. My personal recommendation is to have both a Christmas savings account and a regular savings account where you give the bank the amount that you want to save each month and it is debited from your account. Your savings amount is taken out of your paycheck before you receive it.

Bankruptcy is at an all time high primarily because consumers are continuing to buy on credit even though they don't have the funds to pay it. With some interest rates in the 20-30% range, this can cause a great financial burden. (2.1 million people filed for debt relief with the courts .) To break these old habits of over-spending and money mismanagement, people need to develop new habits. Start the New Year with a budget and make a resolution to start saving and you will have your Christmas money and more.

Many families around the country are striving to achieve financial  stability.  Now they will have many tools at their fingertips at anytime of day or night to help them increase their money management skills and reach their financial goals," said Sharon Seiling, Ohio State University Family Resource Specialist. Financial Security for All provides Internet visitors with reliable and up-to-date financial security information through online lessons for self-paced learning and a knowledge base of commonly asked questions  with research-based, peer-reviewed answers to help users learn more about specialized areas of personal finance. "Financial Security for All is like having a personal financial advisor, but even better. Publications and answers to Frequently Asked  Questions on a wide variety of financial topics are available to consumers 24/7 at no cost," said Barb O'Neill, Extension Specialist; Rutgers Cooperative Research and Extension "There is also an opportunity, through the Ask the Experts feature to get personalized advice and links to featured resources. This site will be available to the public after January 1, 2007.

The resources used for this article are from msmoney.com one of the leading on line financial resource for financial planning and Rutgers University Cooperative Extension publication FS063 Programming My Dollars: Where does the money go.

Email address: aoutlaw@aces.edu
Phone: 937-7176 or 943-5611, 928-0860, ext. 2222

Issued in furtherance of Cooperative Extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, and other related acts, in cooperation with the U.S. Department of Agriculture. The Alabama Cooperative Extension System (Alabama A&M University and Auburn University) offers educational programs, materials, and equal opportunity employment to all people without regard to race, color, national origin, religion, sex, age, veteran status, or disability.