How to Survive the Holidays on a Tight Budget

If last year's holiday charges are still on your monthly statement, you are not alone. According to a recent survey of new clients with Consumer Credit Counseling Service (CCCS) of the Gulf Coast Area, Inc, one in three had not finished paying off last year's holiday bills.

"It can be difficult to pay off the high credit card balances many people incur during the holiday season. The CCCS Holiday Gift Buying Survey was conducted to learn how consumers budget for the holidays and how they can eliminate the stress of overspending," says Alan Olinger, executive vice president, CCCS. CCCS is a non-profit organization that offers confidential credit counseling, debt repayment plans and educational workshops.

"Many consumers do not realize that if they borrowed $1,000 last year at an annual percentage rate of 17 percent and make the minimum payment of 2 percent a month, they will be paying on those gifts through the year 2005 and will pay almost $800 in interest," says Olinger.

If you are struggling with a high debt load, here is some advice from CCCS clients on how to survive the holidays on a tight budget.

• Develop a budget. The need for holiday budgeting has never been greater as consumers are expected to pull out all the stops this year for the new millennium. When calculating your holiday budget, be sure to include holiday meals out, gift-wrapping, greeting cards, postage, travel and other non-gift expenses. These items can add up in a hurry and should be included in your budget. While only 29 percent of the CCCS clients surveyed had established a holiday budget, 86 percent said they planned to budget for holiday gifts in the future.
  
  
• Pare down your holiday shopping list. Do you really need to buy everyone you know a holiday present? Would they be just as happy with a card with a thoughtfully written message inside? The vast majority of the CCCS clients surveyed had a manageable holiday gift list of no more than 10 people.
  
  
• Cut back on your expenses. Nearly 70 percent of the CCCS clients surveyed planned to spend $400 or less on holiday gifts this year. This is less than half the national average of $964. Cost saving ideas include buying in bulk or making arts and crafts gifts.
  
  
• Pay with cash. The last thing you want to do is take on more debt. Start putting aside money today so you can pay cash for as many gifts as possible. Approximately 80 percent of the CCCS clients surveyed planned to use checks or cash this year.

To visit with a CCCS counselor, call 713-923-2227 or toll-free 1-800-873-2227. Spanish speaking counselors are available.

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©2006 Texas Medical Center

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