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MailTribune.com
  • How to stay within your ... Holiday budget

    With many of us still in a money squeeze, holding the line is even more critical this year, say consumer organizations
  • Thanksgiving is barely over, but the holiday shopping season is in full swing. Between now and Jan. 1, hordes of us are expected to be out scouting the malls and neighborhood boutiques or hovering at our computers to shop online.
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  • Thanksgiving is barely over, but the holiday shopping season is in full swing. Between now and Jan. 1, hordes of us are expected to be out scouting the malls and neighborhood boutiques or hovering at our computers to shop online.
    After several years of recession-induced belt-tightening, consumers may be loosening up a bit this holiday.
    "The past couple years, people have been in a self-protection mode ... (and) pulled back on their credit card use, but I think there'll be a bit of rebound," said Erica Sandberg, editor of CreditCardGuide.com in San Francisco. "It's a little like dieting: There's a feeling now that 'I need to indulge.' "
    But Sandberg and other money-management experts caution against binging on holiday spending. "Always remember what it felt like to be in debt."
    To ensure you have a safe-and-sane holiday shopping season, we've gathered some tips from consumer experts. Here's a look:
    DON'T BLOW THE BUDGET: Before leaving home, make a list of everyone you're shopping for and the amount you plan to spend.
    "Having a gift budget really helps keep spending on track and prevents a situation where emotion takes over," said Ted Beck, president and CEO of the National Endowment for Financial Education, in a statement. "People should keep in mind this holiday season ... that the greatest gift you can give your family is financial stability by not overspending."
    One tip to keep your holiday spending sane: Carry cash. When it's gone, you know you're done shopping.
    Other ideas: Pick names among family members or have a "Secret Santa" program so everyone is buying for one relative, not dozens. Instead of buying gifts for every friend on your list, host a potluck dinner or dessert night as a festive, less-costly way to celebrate the season.
    MIND THE PLASTIC: If paying with plastic, designate one card for holiday spending. If you spread your purchases across too many credit cards, for instance, it may feel like you're charging less, but you could wind up overspending and getting stuck with too much in fees and interest charges.
    "Remove all unnecessary cards from your wallet," said Gail Cunningham of the National Foundation for Credit Counseling. "(It) will not only help you stay within your budget, but will also lessen the damage in case of loss or theft."
    Don't charge more than 60 percent of your available credit line, said Sandberg. If your credit limit is $10,000, keep your spending to $6,000. And be sure you can pay it off within one to two months. If you extend that balance for more than a couple of months, your FICO credit score will take a hit, she said.
    When shopping, be wary of tempting credit card offers at the cash register. While the "instant" 20-percent-off deals may sound irresistible, store cards are generally loaded with some of the highest interest rates and lowest credit lines. If you don't pay off your monthly balance, fees and interest payments could easily outstrip the initial discounts.
    "Stick to your plan: If you didn't want or need that credit card before you walked into the store, don't get talked into it," Sandberg said. "Politely smile and say 'I don't need it.' "
    LAY IT AWAY — WITH CARE: Layaway plans are getting a revival, as more retailers let you set aside merchandise to be picked up once you've completed a series of installment payments. Typically, layaway plans require a deposit of10 to 20 percent of the purchase price and a service fee of at least $5.
    While it can be easier on the wallet, the Better Business Bureau reminds consumers to be wary when using layaway. Before you put down any money, be sure you understand the terms: How much are the fees? When are payments due? What happens if you change your mind? What if the item goes on sale after you've set up a layaway plan?
    ONLINE SHOPPING — SAFELY: Whether you're using a PC, Mac or smartphone, the holidays can be a minefield of online cybercrime.
    In its "12 Scams of Christmas," computer security software firm McAfee warns consumers of some common scams:
    — Holiday screensavers, ringtones and e-cards may sound festive, but can harbor malicious viruses or malware. If in doubt, don't download anything.
    — Hot gifts: Whether it's toys or electronics, the season's "must-have" gifts often pop up on rogue websites, even when the merchandise isn't available. Don't get tricked into giving out your credit card information but getting nothing in return.
    — Holiday "phishing" scams, using phony email or social media posts, try to dupe you into disclosing financial or personal data. Among recent examples: Phony Facebook contests and offers, such as free airline tickets, as well as fake texts from your bank.
    Another common ruse is a phony email purportedly from UPS, saying you have a package waiting but need to confirm personal details to receive it.
    "Cyberscammers know that most people are busy around the holidays so they tailor their emails and social messages with holiday themes in the hopes of tricking recipients into revealing personal information," said Gary Davis, McAfee's director of global consumer product marketing.
    To protect yourself, McAfee suggests:
    — Download mobile apps only from official app stores, such as iTunes and the Android Market. Read user reviews before downloading.
    — Be extra vigilant when responding to emails and phone texts. Don't click on links unless you know they're from a legitimate source.
    — Watch out for too-good-to-be-true offers on social networks such as Facebook. Never reveal your personal information to participate in a promotional contest.
    —Don't accept requests on social networks from people you don't know in real life. Wait until you've returned home to post photos and chatter about your holiday vacation.
    California Attorney General Kamala Harris reminds consumers to do the following things to avoid becoming a victim of identity theft while shopping online:
    — Make sure your computer's security software (anti-virus, firewall, etc.) is updated. Same with your mobile phone. Don't do any online banking or shopping from a wireless network — say at a coffee shop or mall cafe — unless you know it's secure.
    — Beef up your passwords and PINs. Don't use predictable passwords such as birthdates, children's names, numerical sequences or other obvious combinations.
    — Shop only from trusted sites and stores. "Many online scammers steal personal information by redirecting shoppers to fake Web pages that look like the checkout pages of legitimate shopping sites," Harris said. To avoid those traps, don't click on links sent to you in emails. Instead, type the store's name directly into your computer's browser.
    LAST WORD: And lastly, a basic reminder from the Consumer Federation of America: "To stop pickpockets from stealing your personal information while doing your holiday shopping, tuck your purse under your arm or place your wallet in a front pocket rather than a back pocket."
    Above all, carry with you some good cheer, a little common sense and a clear-eyed grip on your spending. It's a combination that could save you a serious holiday spending hangover in January.
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