ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, December 2, 1996 TAG: 9612030132
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF/STAFF WRITER
THIS is an expensive time of year - between Thanksgiving and Christmas, the frantic round of gifts, entertainment and travel can stress a family budget.
Chances are a hefty portion of those costs will go on your credit cards. Citibank Cards of New York said that last year Americans charged $4 billion per day on average over the holiday season. The rate is twice that of levels recorded at any other time of the year.
Those bills will have to be paid in the new year.
Citibank, the nation's largest issuer of credit cards with more than 38 million in circulation, said most consumers find temporarily high credit-card balances a manageable inconvenience. For other people though, excessive spending at Christmas can adversely affect budgeting and personal financial management well into 1997.
The pace of personal bankruptcy filings often rises after the start of each new year.
That's why it pays to go into Christmas with a budget.
Connie Kratzer, family finance specialist with Virginia Tech at Blacksburg, said people should save during the year for Christmas expenses.
But failing that, she said, the first step is to write a Christmas shopping list. You should know before you go shopping how many gifts you must buy. Then you must decide how much money you have to spend.
Write in an amount you can spend next to each person's name. Be realistic or you will wind up needing more money than you actually have to spend.
She warned against splurging on a gift without thinking through its impact on the rest of your list. The domino theory applies to gift-giving, too, because one expensive gift can lead to another. That one too-costly gift, she said, can "blow your list."
Kratzer suggested allocating resources other than dollars for the people on your list. Give your time or your talent instead of spending your money.
You might, for instance, offer to baby-sit so that a young couple can go out for dinner or away for a weekend. Or you might offer to stay with a disabled adult so that the caregiver can get away for a day or an afternoon. You could even give the gift of transportation to take an elderly person to the store or hair salon.
Other options are making your special cheesecake when the recipient gives a dinner party, washing the recipient's car or altering clothes.
Kratzer said this type of gift has real value and would be most welcome. You might make up a certificate that could be redeemed at the time of the recipient's choice.
If traditional gifts are more appropriate, make sure you take your list when you go shopping. This will avoid buying something on impulse that is either a mistake for that recipient or a budget-buster.
Kratzer advises shoppers to keep an eye on their purses and packages. If you leave anything in your car, make sure it is out of sight, in the trunk and not on the back seat. Watch your credit card and make sure you get it back each time you buy something.
Save all of your receipts until you are sure that you will have no exchanges. That means you should keep them until well after Christmas. Kratzer said stores are "getting tighter on returns" without the receipt than they were in past years.
When you budget, make sure you set aside funds for entertaining and for buying tickets to holiday events. Giving a party is expensive.
Kratzer said you should complete your shopping as early as possible to avoid last-minute panic, which makes it easier to overspend.
And she warned against falling into the trap of a store's promise of no interest on charges until after Christmas. Those bills eventually must be paid, too, she said.
Register helps keep track of credit-card purchases
Citibank recommends keeping track of credit-card purchases in a register, similar to the way you keep up with your checking account expenditures. Such a record also helps you to verify your monthly credit-card statement.
As with your checking account, the first entry is the current balance as shown on your last monthly statement.
Add any charges made after the statement closing date, and subtract payments sent, keeping a running total of all transactions.
Keep in mind that accumulated interest charges will increase your account balance. Enter those charges in the register each month.
Watch the balance for overspending and, if necessary, modify your credit behavior.
If you don't have a spare register, you can obtain a Citibank "Credit Minder" without charge by calling 1-800-669-2635.
The "Credit Minder" has a pocket to accommodate one credit card. Citibank said confining spending to only one card at Christmas is another way to keep control of credit-card debt.
LENGTH: Medium: 88 lines ILLUSTRATION: GRAPHIC: 2 illustrations. color.by CNB