REDMOND, Wash., Nov. 25, 2003 — Before heading to the mall on the busiest shopping day of the year, consumers should consider ways to avoid the classic holiday spending hangover. Recent statistics show that 54 percent* of U.S. consumers are still paying off credit card debt from the last holiday season. Yet economists predict that shoppers in this country will increase their holiday spending by 6.3 percent** this year.
From buying presents and traveling to entertaining and decorating, this weekend starts the season of overspending for many consumers. A few smart spending strategies plus an awareness of common holiday spending mistakes can help save them from paying for the holidays long into 2004. MP Dunleavey, award-winning columnist for CNBC on MSN®
Money ( http://money.msn.com /), offers the following simple steps to avoid the post-season doldrums:
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Avoid holiday spending blunders. Every year shoppers commit common spending sins. By learning to identify mistakes such as the “unnecessary guilt gift,” “online spending extravaganza” and the “pricey, last-minute gift,” as well as the frenzy to get something for everyone, consumers can regain control over their holiday expenditures.
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Beware of hidden holiday expenses. Most consumers think that gift-purchasing is what hits the budget hardest; however, they spend even more on holiday activities such as buying a new outfit (or two), hosting a cocktail party or taking the kids to see the “Nutcracker” ballet. Simply being more aware of these holiday spending traps, and taking steps to avoid them, can help consumers have a happy and financially healthy holiday season.
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Make a holiday list; check it twice. As soon as the Thanksgiving dishes are done, consumers should sit down and draw up a holiday budget that includes not only gifts but travel, entertaining and decorating costs — as well as the total amount of cash available (not credit). Not only will this offer consumers perspective on what they think they will spend versus what they actually spend, it will give them a chance to panic in their own kitchen so they won’t do it standing at the cash register.
“When shoppers hit the mall or shop online during the holidays, it’s important to control the spending patterns that can affect their long-term financial health,” Dunleavey said. “By avoiding common spending blunders, gift-givers can ring in 2004 with less financial angst.”
Financial Tools Help Keep Holiday Spending on Track
To help consumers keep on top of their spending this holiday season and throughout the year, CNBC on MSN Money offers a wealth of useful financial tools, including these:
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Useful tools, calculators and articles found in Decision Centers take consumers step by step through a particular activity, such as managing debt, setting up a budget or saving money, to help them make smarter financial decisions.
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With the powerful Credit Card Analyzer , consumers can screen hundreds of cards using criteria such as the lowest balance transfer rate to help pay off last year’s holiday debt.
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The Banking Center provides consumers with access to their credit score, credit monitoring, and credit reports from all three credit bureaus, powered by ConsumerInfo.com Inc.
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Convenient My Accounts and MSN Bill Pay enable consumers to monitor accounts and pay their bills in just minutes, leaving more time to enjoy the season.
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The Debt Evaluation Calculator helps consumers determine whether their debt is too high compared with their income.
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The Debt Consolidator helps consumers determine how much they can save by consolidating their debt.
(Note to editors: The above content can be reprinted for editorial purposes, citing CNBC on MSN Money as the source. Dunleavey also is available for interviews.)
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* Consolidated Credit Counseling Services Inc., Holiday Survey 2003
** Bank One Corp.
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