The Economy, Santa & You

“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

–Charles Dickens, David Copperfield

Mr. Micawber’s advice to David Copperfield is sound at any time of the year, but as we go into the holiday shopping season, and particularly as the gyrations of the stock market create uncertainty, all kinds of dire predictions make consumers scared of spending money, I keep getting asked by everyone from Wall Street analysts to reporters to shoppers whether or not the toy industry is going to suffer in this downturn.

My answer: Not as much as other industries.

The reason is that if you have kids at home, chances are you’re going to be buying presents, and those presents will, no doubt, include some kind of toys. Still, that’s not to say with the stock market taking a dip today and fears that the signing of the bailout bill didn’t restore confidence in the markets, it’s anyone’s guess what’s going to happen in the next 90 days in the financial markets.

Yet kids are largely immune to all of this, and that’s not a bad thing. Sure, they know if their family is facing difficulty. (They’re highly sensitized to that, in fact.) Yet the holidays do offer a respite from the worries of the season, and parents eagerly embrace that. Though they may not buy gifts for themselves, Santa is going to fly, even if his sleigh is a little lighter this year.

So don’t let the joy of the holiday season be disturbed by adding financial woes to your holiday. Here are some practical things you can consider as you start your shopping, or shopping planning.

Keep a Budget. Seriously. Everyone tells you this, and your good intentions always tell you to as well, but you ever do, and sometime around December 26, the buzz of the holiday fades and you confront the mass of credit card slips and receipts—and you panic. Get a small notebook with a page for each person you’re buying for. Put the budget at the top, and then record what you spend on each page as you spend it! When you reach the number, stop!

Pay Cash. Again a no-brainer. If you want to make 18 percent on your money, don’t run a balance on credit cards. Or, if you use credit cards for convenience and returns (one of their best uses), use a debit/credit card. You can’t spend more than you have.

If You See it, Buy It. If you know what you’re looking for and you’re in the store and you see it, buy it. It’s probably not going to go on a significant enough sale, and many store have policies that will refund the difference if an item goes on sale within a week or so. Plus, if you really plan to get something, you won’t spend the gas or the time going to get it as the holiday nears.

Be on the Lookout for Deals. Is a store offering free gift wrap? You’ve just saved time and money. Is there a local charity doing gift wrapping to raise money? You can write off what you pay for that as a donation to the extent allowed by law. What’s the threshold for free shipping when you order online? You may want to consolidate your spending in one or two places. Start with the site where you can get the must-have item and build your shopping basket till you hit the limit.

Ask for Deals. This doesn’t work so much in toy stores, but there may be unadvertised specials or coupons that are in a flyer you don’t have. Look for shelf talkers or other signage in stores, and ask. We’ve had good luck finding out that a sale was starting the next day, but in this market, the store may give you the price while you’re there rather than risk losing the sale.

Don’t be Afraid to Retrench. Get home and find you’ve exceeded your budget? Bought too much? Take some of it back! Most stores have good return policies for products, especially if the package is still unopened. Try not to give in to “Oh well, I already bought it!” We sometimes get carried away shopping, and there’s not harm in that. But if you feel uncomfortable about something, that feeling isn’t going to go away. You’ll feel better if you return it.

Feel Good. Guilt makes people do all kinds of things in stores—like buy way too many presents, or spend beyond what they’re comfortable spending. If you set a budget you’re comfortable with, are careful, look for deals and don’t make yourself crazy, you’ll have a better holiday—and you won’t go into 2009 with a debt hangover.

Remember, the holidays are about feeling good and happy, not about taking on debt you can’t handle. Resisting temptation now will pay off in the New Year—and that’s a great gift you can give yourself.

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