Published: November 25, 2008 09:41 pm      

Cutting back

People can shop, give smart this holiday season

DANVILLE — Some families may be cutting back on the amount they’re spending on holiday presents this year due to higher bills and the unstable economy. Others may have already started the tradition of drawing names on one or both sides of a large family to save money.

Still, there are some area residents who expect to spend about the same or a little more this year with careful planning and thanks to Christmas Club accounts.

With a new baby, Brooke Chambliss of Catlin expects to spend “a little bit more” than usual this holiday season. She’s a last-minute shopper, however, and wasn’t sure yet what her budget will be.

Jamie Hawkins of Danville has some job uncertainty, but that’s not stopping her — even though maybe she said it should — from spending what she normally does each year.

“We have a lot in our family,” she said.

She’ll spend anywhere from $500 to $1,000 on smaller gifts to big-ticket items for everyone on her list.

Bruce Lindahl, vice president with William C. Burnside Co., said consumers should use common sense as always with their holiday shopping to maintain their financial sanity.

“Home economics is not really our (the financial consultant’s) forte, but the tips are the same as always,” he said.

They include: use prudence and shop within your budget rather than within your desires; and avoid impulse purchases, Lindahl said.

He said there’s no reason to pull back spending just because of the slumping economy, if you and your family plan.

He said people’s biggest concerns now are thinking “when am I going to get in financial trouble?” Lindahl said families just need to be careful.

He adds that shopping tips haven’t changed either just because of the economy. Do not spend more than you can afford, and if purchasing items with credit cards, make sure you budget for the repayment of those purchases, he said.

“Use good common sense,” he said. “Undoubtedly shop smart and look for the deals.”

Lindahl also advises consumers to look into investing for the future with gifts.

Some of these better gifts might be to start new savings plans or a 529 college savings plan. These financial gifts will benefit the entire family’s financial welfare.

Lindahl also reminds consumers, “presents aren’t truly what Christmas is about.”

U of I Extension tips

Evelyn Prasse, University of Illinois Extension consumer and family economics educator at the Rockford Extension Center, said the holidays should be a happy time, not a time of worrying about overspending the family budget.

“You need to know how much you can spend on holiday spending. And you also must know what you need to buy and who you need to buy gifts for,” she said in a press release.

She adds, “Don’t be tempted to use credit. Remember, credit bills will come due in the new year. If you do use credit, think of those purchases as ‘cash’ purchases. Keep track of them by inserting and subtracting the amount in your check register so you’ll have the money when the bills come due.”

Prasse also advises consumers to be wary of “instant credit” offers because you may be tempted to spend more because of the discount.

Prasse also suggests considering what can be done for others without spending a lot of money. Consider giving your time and talents.

She said think about gifts you can make yourself, gifts from the kitchen, or making gift certificates for raking leaves, shoveling snow, mowing lawns, babysitting or washing windows and cleaning a house.

“Have the children design the certificate and present it to the recipient with a plate of goodies. A shut-in or older person may be more pleased with these gifts than gifts that are purchased in a store,” Prasse said.

If families are planning holiday parties, determine how much you can spend.

“Forego lavish decorations and food items if you can’t afford them and keep decorations simple and inexpensive. Use house-hold items for party favors or decorations. Dress up old favorites with new accents and mix and match for a new festive look. Children love to make things so give them the responsibility of decorating the home. Or have a decoration-making party and invite family and friends to help you,” Prasse said.

Also, instead of an elaborate meal, you could plan a potluck and ask guests to bring a dish. Or you could have a soup or chili party and have guests bring their favorite soup along with the recipe so they can be combined later into a holiday cookbook, she said.

Prasse suggested playing games or renting videos for a fun, economical stress-free evening.

“Make a realistic budget based on your holiday list and stick to it. If you do, you’ll find that the new year will not be filled with excessive stress in paying bills,” she said.

Other U of I Extension holiday spending ideas:

--Make Christmas ornaments. Make holiday decorations out of dried or real plants, branches, etc.

--Visit an elderly person.

--Send a stack of last year’s magazines to someone who doesn’t have them and mark your favorite articles, recipes, etc.

--Homemade jam, relishes, other canned goods.

--Make dolls or animals out of old socks, scraps of fabric, etc. for very small children.

--Offer rides to elderly persons or those with no transportation.

--Bake cookies and other goodies and wrap in festive paper.

--Make items of clothing, woodworking, etc.

--Take a picture of the family and have it enlarged.

--If you have plants, take a clipping and repot.

--Make your own Christmas cards, gift tags, etc.

--To your children — 20-30 minutes of story time each Saturday.

--Give a coupon for dog or cat sitting.

--Give a book that you have that you enjoyed reading.

--Make a homemade recipe booklet — have your children decorate it.

FYI

For a copy of a holiday spending budget, a holiday gift-giving checklist and sample gift certificates go to http://web.extension.uiuc.edu/rockfordcenter/cfe.html and click on holiday spending under Resources.

Also, the University of Illinois Extension has launched a new Web site to help consumers cope with the economic downturn.

"Getting Through Tough Financial Times" (http://www.ToughTimes.illinois.edu) will be updated as the economic situation warrants, including new issues that emerge.

The Web site is organized around such topics as: Avoiding Money Traps, Setting Spending Priorities, Managing Your Debt, Talking with Creditors, Saving and Investing in Turbulent Times, Spend Smart/Save Smart tips, and others.