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Amber Dakar recently became a contributing editor to my Dividend Superstars newsletter. And the following insights on consumer spending and personal finance are so timely and useful that I wanted to share them with you today. — Nilus |
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The National Retail Federation projects U.S. consumers will spend an average of $682.74 on holiday shopping this year — a 3.2 percent drop from last year. So retailers have been pulling out all the stops to capture as many of those scarce consumer dollars as possible.
Steep discounts are everywhere. Retailers have also trimmed inventories and are stockpiling more lower-cost, practical items that are priced to move.
As I wrote this article, my email inbox was getting filled with enticing promotional holiday sales offers of 30, 50 and even 85 percent off.
Of course, all the sales in the world aren’t going to change the important shift that’s taking place. Many U.S. consumers, from all economic classes, have a new attitude about their household finances.
Gone are the days of frivolous spending — for this holiday season value is key, cash is king, and inflated holiday spending budgets of yesteryear have been curtailed.
There’s a lot to be concerned about — a recession, high
unemployment, declining home values, plus a tighter credit market.
So before you step out the door for last-minute shopping or to take advantage of holiday sales here are …
Five Steps to a Sound Holiday Budget
Step 1: Total it up. First, review what you spent last year. Make sure to include items you spent on decorations, postage, holiday cards and even travel expenses. Once you have a general idea of what you’ve previously spent, adjust that amount to fit your personal financial situation this year.
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| Putting together a budget before you go shopping will help avoid impulsive purchases. |
Step 2: Make a list and check it twice! Organize a list of the names of loved ones you want to purchase gifts for. Write down the amount you plan to spend on each person and stick to it.
Step 3: Talk it out. Have a family meeting. Once you have a general idea of how much you want to spend this shopping season, make certain everyone else in your immediate family is on the same page. This way you’ll be certain to keep spending in check across the board.
Step 4: Buy in bulk. It’s always possible that you’ll be the recipient of an unexpected gift from a co-worker or acquaintance so it’s nice to have a few gifts at home that can be used in return. But how can you do this without breaking the bank? One way is to buy in bulk. Visit a local wholesaler and pick up a few boxes of baked goods or stationery or small household trinkets that can be used as general gifts.
Step 5: Always remember: Cash is king. Make every effort to pay for your in-store purchases with a debit card or cash.
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| If possible, use cash when you’re out holiday shopping. |
If You Are Shopping Online,
It’s Better to Use a Credit Card!
Credit cards offer more protection for online shopping versus debit cards.
If unauthorized purchases are made on a credit card, U.S. Federal law limits the cardholder’s liability to just $50. And in most cases the credit card issuer will waive that fee entirely.
Meanwhile, if fraudulent charges are made with a debit card and the activity is not reported within two days, the cardholder can be held liable up to $500!
The cardholder may also face unlimited liability if they fail to report unauthorized charges within sixty days upon receipt of the bank statement that lists fraudulent purchases.
Four More Quick Pointers for Shopping Online …
First, make certain that the PC you’re using has up-to-date antivirus software.
Second, only shop on trusted and secure sites with https:// as the URL in the web address bar at the top of the screen. The “s” signifies that the website is secure. Or look for a closed padlock icon on the bottom of the screen.
Third, use one specific credit card to make all your online purchases. This allows you more easily monitor any activity on a regular basis, will alert more quickly to unauthorized charges.
Fourth, print a copy of the confirmation page that details your order for your records. It’s always good to have a record of the transaction stored somewhere other than on your computer in case you ever have to dispute a charge, return the item, etc.
In sum, if holiday shopping is on your to-do list this season, you should be able to find solid bargains, stay within your budget, and keep your financial information safe. All it takes is a few simple steps!
Best wishes for a safe and happy holiday season,
Amber
About Money and Markets
For more information and archived issues, visit http://legacy.weissinc.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson and Bryan Rich. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amy Carlino, Selene Ceballo, Amber Dakar, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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