Ten Tips for a Happier Holiday
We can't promise you peace on Earth, or even that the in-laws will get along this holiday season, but these ten tried and true techniques for shopping, traveling and giving will save you money and reduce your stress.
By Erin Burt, Contributing Editor, Kiplinger.com
Cameron Huddleston, Contributing Editor, Kiplinger.com
November 10, 2005
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We can't promise you peace on Earth, or even that the in-laws will get along this holiday season, but these ten tried and true techniques for holiday shopping, traveling and giving will save you money and reduce your stress.
1. Make a list and check it twice. Determine who you are going to buy for and how much you're going to spend before heading out to the malls, says Steve Rhode, co-founder of credit counseling agency Myvesta. It sounds like obvious advice, but plenty of people do their holiday shopping without creating a budget and deciding how much they want to spend on each person on their list. As a result, they get caught up in the excitement of the bustling stores, submit to high-pressure sales tactics or the frenzy of last-minute shopping and overspend. "You don't have to go crazy spending money you don't have," Rhode says.
2. Establish gift-giving guidelines. Kids might write a holiday wish list a mile long, but parents by no means should buy every item. Let children know what the limits are. For more, see Holiday Giving Guidelines.
Also, if your extended family (aunt, uncles, cousins) exchanges gifts, consider setting a dollar limit. That way no one overspends and those with smaller budgets don't feel bad about giving $15 gifts while others are handing out $50 gifts.
3. Shop online. Unless you enjoy the thrill of hunting for a parking spot or elbowing your way through mobs of cranky shoppers, consider shopping online. Market analysts at Jupiter Research estimate online holiday sales will climb 21% over last year.
Even if you don't buy online (see number 4 below) you can save precious time by using your PC to comparison shop and research products. Check our Shopping page to search for products and compare prices.
If you don't know what to get someone on your list, consider electronic gift certificates. They won't get lost, and the set dollar amount will help you stick to your budget.
And always be sure you're on a secure site before entering your personal information. Look for a little padlock icon on the status bar of your Web browser, or check the address bar for https://. These both indicate the site is secure. You should also read a Web site's privacy policy to find out how it handles your personal info.
4. Shop by total price. Buying online may not always be the cheapest option. Shipping costs can make your purchase more expensive than if you went to a store in person. Retailers will also charge you sales tax if they have a store in your state.
And remember to shop early. Check with the site to see when you can place an order and still have it arrive in time. If you miss the date, you'll pay dearly for expedited shipping. For example, at Amazon.com, you'll need to order by December 19 to ensure delivery by the 24th at standard shipping rates. Otherwise, that $15 book could cost you an extra $9.50 to $16.50 for speedy delivery.
5. Pay with a credit card. A lot of people get into trouble racking up huge bills on their credit cards during the holiday season. However Myvesta's Rhode recommends using credit cards because they offer more consumer protection than debit cards. And if you overspend with a debit card, you could overdraw your account and get hit with hefty fees. The key is to pay off the credit card bill immediately. Rhode suggests deducting the amount you spend on your credit card from the balance in your checkbook so the money will be there when the bill comes.
6. Ensure many happy returns. Just because you like that purple sweater doesn't mean your brother will. Save him some hassle and include a gift receipt with the package so he can exchange it for a different color, size or item.
Also, be sure you know the store's return policy. Some are more generous than others. For example, Nordstrom offers an unlimited return period for the item with or without a receipt. CompUSA allows 21 days to refund or exchange a product with an original receipt and an unopened package. If you do not have a receipt, items may be exchanged for a store merchandise card.
7. Lighten your travel stress load. Even if you dodged the crowds at the mall this year, you probably won't be so lucky at the airport. Give yourself plenty of time to find parking and catch a shuttle to the terminal. Take advantage of some airlines' self check-in kiosks to avoid long lines. Pack yourself and the kids a snack for the flight and avoid pricey and less tasty airport fare. Also dress and pack with security in mind. Shoes with metal arches, metal belt buckles and even electronic security cards can set off today's ultra sensitive metal detectors. Pack all unnecessary metal objects in your carry-on to breeze through security.
If you're hitting the road this year, a little planning can ease your "are-we-there-yet" headaches. Pack age-appropriate entertainment for the kids. You can pick up coloring and sticker books, and travel board games for a few dollars. Let the kids bring their GameBoys and personal CD players along too. For movies on the go, you might consider investing in a portable DVD player, such as Audiovox D1708PK ($158.99 at Amazon.com). Or pick up the VideoNow system for $49.97 at Wal-Mart.
8. Mail early. If you need to ship any parcels to friends or relatives, plan ahead. The U.S. Postal Service expects the peak mailing day this holiday season will be December 19. However, Express Mail delivery to most major American cities is scheduled for Christmas Day this year
And if you're going out of town, place a hold on your mail delivery. Using USPS's online form, simply enter your address and the dates you wish your mail to not be delivered. When you get back, you can pick it up at the local post office. Don't forget to cancel delivery of the newspaper too while you're at it.
9. Watch out for the no-interest financing trap. You've seen the ads: "Buy now and pay no interest until 2007." Or "No monthly payments until June 2005." They sound like good deals, especially if you're strapped for cash this holiday season and family members are asking for big-ticket items. The offers can be money-savers if you pay off your purchase before the interest-free/no-payment period ends. If you don't, you could find yourself with a much bigger bill than you expected.
To get these offers, you usually have to sign up for a store's credit card. It's common for interest to be charged to your account from the date of purchase. When all that interest you thought they were avoiding gets tacked on to your bills, you end up paying more than if you had charged purchases to a low-interest credit card and made monthly payments. That's because interest rates on store credit cards tend to be high. This calculator can help you figure how much these "deals" can really cost you.
10. Give smart. Giving to those less fortunate is what the holidays are all about, and giving by year end can help lower your 2005 tax bill too.
If you're looking for a charity to bestow your holiday cheer, go to GuideStar. The site has a national database of 850,000 nonprofits that allows you to search by city, state or category.
The Better Business Bureau's Wise Giving Alliance has an alphabetical listing of charities, as well as tips on giving.
If you already have an organization in mind, use these sites or the American Institute of Philantropy to verify that the charity you've chosen is legitimate. You should be especially wary of e-mail and telephone solicitations. Never give your credit card number over the phone or to Web sites linked to e-mails.
You can deduct the full amount of your contributions if you itemize deductions on your federal income tax return. A $1,000 deduction on your tax return translates into $250 in savings if you fall into the 25% tax bracket. If you donate stocks or bonds, you can deduct the fair market value of the assets and avoid capital gains taxes. For more on giving appreciated assets, see Maximize Your Charitable Donation.