How Parents Can Manage Their Finances During the Holidays

Most parents spend the greatest amount of money during the holiday season. Many times the holidays are filled with stress, anxiety, pressure or guilt due to the time and money spent during the holidays. If you don't have the money to buy gifts during the holidays be honest with yourself.  If you have a small amount of money to buy gifts, buy what you can and don't use your credit card to buy gifts unless you have the money to pay the debt off in two or three months.

Don't feel ashamed that you don’t have money to buy gifts.  It really is the thought that counts and if someone gets upset because you only spent $10-$20 on a gift, it's their problem not yours. Many people have lost site of what the holidays are all about. It is not about giving a gift; it is about spending time with your family and friends, being thankful, reflecting on the past year, and thinking about things you would like to change in the New Year. 

Explain to your children that you cannot afford to buy them everything they ask for on their holiday wish list.  Let them know that you still love them but have other bills to pay like rent or mortgage, food, utilities, etc.  Ask them if they want the items on their list or want food on the table.  Sometimes realty is a great way to change a child’s thinking.  Never go into debt or put yourself in a financial crisis for your child.  Children need love not expensive gifts.  Here are 7 tips on how to help parents steer their finances during the holidays. 

1. Lower expectations. Many times children's expectations for holiday gifts are obtained from friends, classmates or from watching television.  Be realistic - let your children know your financial situation and their price limit for holidays gifts. If they can only get one big gift or one toy let them know as soon as possible.  Teach your children that receiving several gifts doesn't mean a better holiday experience; spending time with family is more important than the number of gifts they receive.  If your children still believe in Santa, buy several small gifts from the dollar store (gifts that actually cost a dollar). That way they will still believe in Santa and save you money.

2. Be Strong. Don't give in to "puppy dog eyes", whining or complaining from your children.  Stay firm with your decision about gifts for the holidays.  Giving in to your children sets unrealistic expectations and does not prepare them for the disappointments that occur in the real world.

3. Set a spending limit.  Set a spending limit for your holiday shopping including groceries, gifts, etc.  This will reduce your chances of going into debt and relieve the stress of having to buying things that are not in your budget.  Don't go into debt trying to buy gifts for your children. Do they really need a new desktop or laptop or can they use the one they have until next year.

4. Unexpected Gifts. If you children decide to give gifts to their babysitter, teachers or new friends - don't be alarmed.  Be creative and bake deserts or make gifts if you are good with arts and crafts. 

5. Consult with your ex.  Talk with your ex-spouse to make sure your children are not asking for the same gifts and are not trying to use guilt and as a way to get more gifts from both parents because you are divorced. 

6. Volunteer.  If you children refuse to accept that they cannot get the gifts they want for the holidays take them to a shelter or sign them up to volunteer to help the homeless or sick children to help them change their perspective about life and what's really important.  Other children and families have less than they do and they should be appreciative of whatever they have.

7. Follow Traditions. If you family has inexpensive traditions follow them this year to save money such as baking cookies, donating used toys, or going through the neighborhood caroling. This will get your children in the holiday spirit, keep them active and distract them from spending time thinking about all the gifts they want for the holidays.

Be Cautious During Black Friday

                                                   

Black Friday is the Friday after Thanksgiving and officially starts the Christmas holiday shopping season.  It is the day when many companies slash prices to lure customers into stores hoping to boost their sales during the last two months of the year.  

Over 80 million Americans shopped online from the middle of November to the middle of December last year for gifts.  Black Friday sales in 2011 were approximately $11.4 billion. 

Black Friday has now been modified and some stores are implementing Black Thursday such as Toys R Us, Wal-Mart, Sears and Kmart at 8 p.m.  Other stores start their sales at midnight on Thanksgiving Day.

According to Market Watch some Black Friday ads were leaked that some experts believed were planned. According to data analyzed by the Wall Street Journal the best deals occur before or after Black Friday. The best deals can be found before Black Friday through the end of October. The same gifts can be purchased throughout the year for a lower price. 

The best bargains are for electronics and large items such as tv's and computers which can be purchased online.  Some companies are offering pre-black Friday sales and in some cases prices are better than black Friday sales.  Apple.com will have a one day sale on black Friday.   

Several websites, like Amazon, DealNews, RetailMeNot and DealDump, create online shopping bargains all in one place so shoppers can find them easily. Also look for black Friday sales on Twitter and Facebook.  Here are 12 reasons to shop online on black Friday instead of going to the stores.

1. Do research.  Buy your local Sunday or Wednesday newspaper or watch your local news to hear about store sales and specials.
2. Make a list.  Make a list of what you are going to buy and from what store.  You can get overwhelmed by all the sales and end up spending money you don't have. Don't go into debt just because you see something on sale.
3. Other stores.  Don't shop at stores that don't have black Friday sales or stores that are not on your list.
4. Pay with cash.  Don't buy items with credit cards.  Purchase items with cash, check or debit cards.  Make sure you don't go over your limit with your debit card and end up overdrawing your account.
5. Raincheck.  If an item is out of stock ask for a rain check and be sure that you can get the item for the same price.  Find out if new stock of the item will arrive before Christmas.
6. Store gimmicks. If the store says "Limited Supply" it usually means there are 4-6 items in stock. If an item is out of stock be sure to get a rain check and go after the New Year to buy the item at the discounted price.
7. Save gas.  You can shop in your pajamas instead of waiting in line at 6:00am or in the cold.
8. Free shipping.  Many companies offer free shopping starting on Black Friday through the holiday season.
9. Stock.  There are more items in stock online that in the actual stores.
10. Easier.  You can take your time and in some cases chat with online representatives to answer questions.
11. Stress.  Shopping online is less stressful than running through the stores, fighting for parking spaces, fighting over items on sale and waiting in long lines.
12. Safer.  Shopping online is much safer and you don't have to worry about getting elbowed or trampled over while shopping.
13. Security.  Don’t shop with companies you never heard of or with sites that don't have a https or shttp on the payment page, a mailing address and contact phone number. 
14. Set a budget.  The holidays should be more focused on spending time with family and friends and not about buying a gift.  If you have to buy a gift for a parent and child consider just buying a gift for the child.  Let the parent know you are cutting back this year and really can't afford a gift right now. 
15. Emotions. Don’t let peer pressure or guilt from family, friends or co-workers cause you to go into debt this holiday season.

The Real Cost of Layaway

                                                                    

The holiday season is approaching and companies are working frivolously to think of ways to lure customers into stores.  An old sales method that was retired and has been restored is layaway.  This holiday season layaway is offered at several stores such as BestBuy, Sears, Hallmark, Marshall’s and TJMaxx.  Kmart and Toys ‘R’ Us will reduce their layaway fees during the holiday shopping season this year.  Wal-Mart is reducing its fee from $15 to $5 from September 16 to December 14. 

Layaway allows customers to select items they want to buy and pay for them over a period of time. Once the final payment is received, items may be picked up. However, layaway requires a service fee plus additional fees associated with making a layaway purchase such as a cancellation fee.

Some stores charge a 5% service fee for layaway purchases such as BestBuy. While other stores such as Burlington Coat Factory, T.J. Maxx and Marshalls charge a nonrefundable fee of $5.  Some stores markup items that are placed on layaway so you end of paying more for the item than you should.  Those same items will be marked down the day after Christmas. 

If you change your mind and decide you don’t want the item it will cost you.  Cancellation fees can range from $5 to $15 if you decide not to purchase the item(s) plus a nonrefundable fee or service fee which end up costing you a total of $20. Here 13 disadvantages of layaway.

1. Enrollment fee or service fee can range from $5 to 5% of the total purchase price.
2. Downpayments can range from 5 to 10% the total cost of the items.
3. Requires minimum purchase.
4. May have to pay the full cost of items instead of the sale price.
5. If an item goes on sale, you may not eligible to get the items at the new sales price.
6. If you miss a payment, your purchase may be canceled and you may lose any money paid or may be able to get store credit or a gift card.
7. Payments only accepted in person at the store.
8. Only available on certain items.
9. You have a certain amount of time to pay for the purchase usually 2 to 3 months.
10. Spend more in gas costs and mileage going to the store to make payments.
11. You may miss out on other sales such as Black Friday.
12. If the store goes out of business or files bankruptcy you lose your purchase and your money.
13. Online sites may require additional fees.

Layaway is not a reason to spend more money than you should.  Layaway requires you to be responsible shopper.  Don’t go overboard this holiday season because of layaway.  Some shoppers may feel the pressure of the holidays and may see layaway as a good option due to commercials and ease of the programs but don’t ponder the hidden costs. 

Don’t put items on layaway that you can’t afford or are not sure if you will have the money to buy it.  Shop at discount stores such as Ross, Target, Walgreens or Wal-Mart or shop online to find cheaper prices instead of buying items on layaway.  Layaway is a form of debt so remember treat layaway as you would your credit card payment.