Newspaper article St Louis Post-Dispatch (MO)

Gallagher: December Cheer Can Lead to January Jeer

Newspaper article St Louis Post-Dispatch (MO)

Gallagher: December Cheer Can Lead to January Jeer

Article excerpt

Too much Christmas spirit can lead to a big headache in January when the credit card bill hits home. So, let's look for ways to keep spending sane after downing lots of eggnog.

A rule of thumb is to spend no more than 1.5 percent of your gross income on holiday gifts less if you're already struggling to pay bills, says Suzanne Gellman, who teaches family finance at the University of Missouri's extension division. So, someone making $50,000 per year would spend $750 on the holidays.

Decide what you can afford before you make your gift list, and stick to it. Gellman recommends getting an envelope for each person on the list. Put inside the amount you want to spend in cash.

"People overspend when they use credit," she says.

Don't move money from envelope A to envelope B unless you've already bought A's gift and have money left over.

Lots of people will be shopping in their pajamas, and Washington University has a hint for them.

After filling up the online shopping cart, grab a cup of coffee before hitting the "purchase" button. A little hesitation can remove the urge to splurge.

"Those who took a break, as short as 10 minutes, were less likely to give into temptation," wrote Selin A. Malkoc, an associate professor of marketing, who studied online buying behavior.

The Internet allows easy price comparisons, and that can save a lot of money. My wife, Susie, spotted some towels she wanted in the Hammacher Schlemmer catalog a couple of weeks ago. They cost $39. Ouch.

She searched online for the same brand and found them for $23 at Amazon.

In some cases, although not all, an online buy can avoid sales taxes. But watch out for shipping charges.

Gellman thinks people should leave their credit cards at home, and limit spending to the cash in their wallets. There's a counter- argument: Lots of credit cards pay rewards cash back is usually the best choice. …

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