Say ‘no’ to impulse buys, credit cards this Christmas

If it ain’t broke, don’t fix it!

Though this phrase probably raises the ire of our editors (and English teachers across the land), it’s hard to deny the point it makes: if you’ve got a good thing, keep it going. Last year at this time we landed on just such a thing when, with triple-digit temperatures still prevalent, we offered up some tips for avoiding holiday debt by getting on the holiday bandwagon early. A Christmas shopping discussion before Halloween is in our rearview mirror? We knew it was a risk, but we got some pretty positive feedback on this approach. So with a few minor edits, we’ve repackaged these five steps to help make the holidays a financial footnote and not a financial disaster:

Have a plan. A shopping list and a firm budget are central to a financially rewarding holiday season, so make yours now – and stick to it. This will help you avoid one of the landmines of holiday shopping: impulse buys.

Set some aside now. We’ve seen varying numbers, but it appears that the average family spends around $1,000 on gifts. With at least seven paydays left before mid-December, pack your lunch, penny pinch, and then hit the ATM and stuff $100 in an envelope each paycheck and – voila! – you’re 70 percent of the way there. It’s like a late start on the old Christmas accounts, but not too late. And next year you can start earlier.

Spread it out. You’ve made a list of who is getting what. Why not start to chip away at it now? Clean out the back of the closet and start to stack those gifts in the back. You’ll avoid the holiday rush and a big gash to your wallet. As a side benefit, you may find gifts you stashed in years past but forgot about.

Plant the seeds. Do all of your nieces and nephews, in-laws and out-laws, friends and neighbors need gifts? Probably not. Start talking now about limiting gifts. Consider drawing names, or swapping services as an alternative to pricey gifts. Get everyone on the same sheet of music early and you’ll avoid hurt feelings and financial stress.

Be a cash buyer. While credit cards are convenient, they make it so easy to stray from your list, break your budget, and splurge. This year, commit to spending greenbacks only.
There you go! Early or not, make these tips the centerpiece of your 2012 holiday shopping season.

June Lantz Walbert and J.J. Montanaro are certified financial planners for USAA, The American Legion’s preferred provider of financial services. Submit questions for them online.

This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC. Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers. USAA Financial Planning Services® refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and Certified Financial Planner TM in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.