Rick Emerson, author of Zombie Economics, joined us with his financial holiday survival guide.
Five Simple Ways to Curb Your December Spending
1) Keep a running tally as you shop for gifts.
When purchases are made via credit card, it's easy to lose sight of how much debt you're accruing.
Keep track of what you're spending, and do it on paper. (No need for hyper-specifics - just round the figures and add them as you go.) If you're actually aware of your total spending -if you see the figures passing two hundred, three hundred, or four hundred dollars- it's a lot easier to step back and really think about where your money is going.
2) Beware of in-store credit cards.
Be cautious when it comes to signing up for in-store credit cards. Typically, these are pitched as a way to get a quick ten percent off at the register - you apply for the card, they knock a few bucks off that day's purchase. The downside is that these cards often carry extremely high interest rates - sometimes 20 percent or higher. What's worse, every time you open one of these accounts, that store requests your credit report. They call this a "hard inquiry", and it can actually reduce your credit score. All this for a one-time savings. The only time to sign up for one of these cards is f you're buying something expensive and know you can pay the balance on time and in full.
3) Use "Free Shipping Day"
We all know about shopping online; what you might not know about is Free Shipping Day. This is something that started in 2007 and has been growing every year. On Free Shipping Day (which this year is Wednesday, December 18th), more than 1,000 merchants will offer free shipping and guaranteed delivery by Christmas Eve in the contiguous United States. Retailers like Apple, Nike, Kohl's, REI, Zales, have all been part of Free Shipping Day. If you've moved a lot of your shopping online, this is a way to cut one of the biggest associated costsand make sure that your order is on your doorstep by Christmas Eve. You can find out more at FreeShippingDay.com.
Beyond December 18th, there are still ways to save on shipping. Some retail sites will tell you if a particular item is in stock at a nearby store; you can pay for it online, go to the store, walk in, and it's waiting for you, ready to go.
4) Have your bank turn off overdrafting.
This is to keep you from accidentally racking up massive fees and penalties while shopping. (Example: you buy some tinsel for five dollars; your account has insufficient funds; your bank is happy to cover the differencefor a thirty-five dollar fee, which means your five-dollar tinsel just cost you forty dollars.)
Tell your bank to disallow overdrafting altogether - to block any purchase for which there isn't enough money in the account. And make sure they confirm this change in writing/email.
(Note: this is primarily for debit-card transactions; paper checks might not be given the same scrutiny.)
5) Trim your gift list
The economy's slow rebound has at least one silver lining: it's your best-ever opportunity to trim your gift list.
We've all got someone (possibly many someones) to whom we give gifts out of a sense of obligation and/or preemptive guilt ("What will they think if I don't get them anything?")
In the current economic climate, however, no one will question anyone who's more focused with their gift-givingand you will be amazed and how little drama it causes. Send a card, a note, or a handwritten letter - the recipient will be happy, you'll have added a personal touch to your holiday interactions, and you have that particular gifting obligation off your back forever.