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Preventing Holiday Hangover 

Does this scenario sound familiar? You use credit cards to do your holiday shopping, promising yourself you'll pay the bills off within two or three months. Six months later (or more), you're still paying, and those items that seemed like such bargains end up costing you 10 to 20 percent more than you thought, due to credit card interest. For many, this pattern is repeated year after year. Personal finance experts call it the "holiday hangover." Not only does card usage soar this time of year, but bank-card companies tempt you with more offers by mail, radio, and TV. While credit seems like an easy and convenient means for many people to pay for their Christmas shopping, it can leave them with the difficulty of repaying Christmas debts well into the New Year. But the holidays don't have to add up to big bills when the celebration is over. Here are some ideas to help keep you from pulling out the plastic during the holidays.

Go for the Green

Leave your checkbook and credit cards at home so you won't be tempted to impulse buy. Research has proven that people who shop with a credit card are willing to spend as much as 30% more for an item than if they pay cash for that same item. Paying cash will also help you to avoid interest charges.

Set Up a Special Savings Account

Consider a "Christmas Club" plan if your bank offers one. These are basically savings accounts to help people prepare for Christmas spending. They are no different from normal savings accounts except they are designed for users to accumulate savings over a year and to draw it out before, during, or after Christmas. It's of course too late for this year, but keep it in mind for next.

Make a List and Check it Twice

More than just a Christmas list, this should include everyone who will receive a gift. Set a limit for each person on your list and add up the costs to make sure it doesn't exceed your overall spending limit. Try to allow a cushion for unexpected items or price fluctuations. Also include money you'll spend on Christmas cards, postage, holiday parties, decorations, holiday entertainment, etc.

Celebrate Christmas All Year

Avoid last minute holiday shopping by purchasing gifts all year round. Buy gifts when they are on sale or when you spot the "perfect" gift. Take advantage of flea market and thrift store finds and don't forget "Christmas in July" and end of winter clearance sales. If you've already decided on specific gifts for each person on your list you can also take your time and look for sales in the Sunday paper. By December, you won't feel stressed out and you will have the time to concentrate on more important things.

Get in Touch with Your Creative Side

Consider making gifts this year. The most thoughtful gifts are creative, personal, and usually inexpensive. The secret to thoughtful gifts is to be observant all year long to determine something unique for the people on your list. Examples are:

* Food gifts with recipes included (i.e. homemade jellies or specialty breads, a plate of cookies, candies, or a combination of foods that has been divided up).

* Computer gifts (i.e. return address labels with graphics customized to reflect the person's interests, calendars with personalized pictures for each month, personalized greeting cards, or coloring books for children).

* Personalized recipe books

* Mix tapes or CDs

* Christmas ornaments

Emphasize the Real Meaning of Christmas

Reduce the number of gifts you are giving and invite your relatives to do the same. Focus on the reasons that you are giving instead of the amount you are giving. Perhaps you can draw names within your family to reduce the number of gifts to buy. Not everyone will want to cut back on the usual gift giving extravaganza, but it's worth a try.

So there you have it. Avoid being a victim of "holiday hangover" and enjoy the season. Happy spending! *

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