Reducing holiday spending

Your Money

October 29, 2006|By Humberto Cruz | Humberto Cruz,Tribune Media Services

The presents are wrapped and in the closet, waiting for the right time to come out. It's only October, but my wife, Georgina, and I are done with our holiday shopping this year.

I admit to some trepidation at telling you this, knowing hate mail will come from those who'll say we don't have any holiday spirit.

If by holiday spirit you mean rude pushing and shoving in crowded stores in December, you are right. Ditto for sitting in front of the computer for hours filling online shopping carts. If you mean getting into credit card debt and spending extravagantly, you are right again.

Instead, we choose to lift our spirits and feel the joy of anticipation by doing our holiday shopping here and there throughout the year, always keeping to a budget we won't exceed.

True, we might miss a pre-holiday sale later on or fail to buy the season's "must have" item that marketers push. But with more time to look, we are more likely to find the right gift for the right person for the right price. And we'll spread the cost rather than being hit all at once.

One warning: If you don't have the discipline to control your spending, you might end up buying stuff all year long and splurging again at holiday time. Before you try our method, make sure you are committed to setting up and sticking to a budget that includes all holiday-related expenses, such as parties, trees, decorations and buying and mailing cards.

How much to spend is a personal matter. I've seen surveys that say U.S. households on average spend as much as $1,000 during the holidays, a figure likely to create a significant hole in the typical family budget.

If money is tight, why not agree on a no-gift-exchange policy with friends (or even relatives). You can enjoy time together, but there is no need to spend money you don't have on gifts.

When you do give, a gift of time can be far more appreciated than one of money.

For an elderly relative or neighbor, consider giving a "coupon" for free services, such as mowing the lawn or helping with housecleaning. Do make sure this is OK with them and that they don't see it as an intrusion on their privacy or independence.

Or, instead of buying expensive toys you can't afford, entertain your kids with original stories. Georgina enjoys making little books for our grandchildren, who are 5 and 3, by pasting pictures of places we have visited, such as Disney World, and making up stories reminiscing about our trips.

Not a writer or storyteller? You still have choices. For all the electronic gadgets aimed at kids that are waiting to drain your wallet, simple toys such as building blocks, modeling clay, crayons and paper, and paper airplanes have proved to be loads of fun with our grandchildren, particularly when we all play together.

When shopping for gifts for children, consider those that teach about the value of money (you might keep your children from falling into the holiday-overspending trap when they grow up).

One I can recommend for younger children is the music CD "Mission 1, Celebrate Saving!" with 15 catchy tunes.

The CD, which has received praise from educators, is the creation of Sam X "Sammy" Renick, a songwriter and children's author who tours schools around the country with a life-size costume of the character Sammy the Saver, a rabbit with the savings habit.

"Some people think saving money is hard," Renick said, "but I think saving money is easy if you make it a habit."

The CD is available from Renick's It's a Habit Co. Inc. ( My favorite tune, "Don't Spend More Than You Make," reminds us: "Don't ever, ever, ever spend more than you make. Just give it a little thought. That's all it takes."

Another gift that older children, and adults, might enjoy is the board game Look Out Wall Street! (information available at Players try to make the most money by investing in stocks and bonds. Luck, as it does in life, plays a large role in the form of "random events," including bull and bear markets.

The game teaches the value of long-term and low-cost investing. The game's creator, Kathleen L. Ryan, said she was inspired by John C. Bogle, founder of the Vanguard mutual funds and a longtime champion of low-cost investing in index funds. Bogle has endorsed the board game as "a fun game that teaches valuable lessons about investing."

Humberto Cruz is a columnist for Tribune Media Services.

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