To control holiday spending, be like Santa and make a list

Question: It is easy to overspend on gifts, parties and unnecessary sale items during the holiday season. What can consumers do to prevent overspending this time of the year?

Answer: Do what Santa does. He "makes a list and checks it twice." Think carefully about both who will be on your gift list and how much you are comfortable spending. This is a happy season, and you don’t want excessive spending to ruin the experience. You don’t have to buy a gift for everyone you know.

Q: How long does it take the average consumer to pay off holiday debt?

A: This is one area where the recent recession has helped and resulted in more prudent debt management. A little over 20 percent of people will carry over holiday spending past their January 2012 credit card bill. The average level of holiday spending is almost $700, so paying off the minimum on one’s credit card can take a long time and result in interest charges that exceed the original bill. The best advice is to make sure you are positioned to pay off the entire credit card balance when it arrives in January.

Q: How can consumers prevent racking up credit card debt?

A: Minimize the number of credit cards you have and minimize their use. In addition, keep careful track of all the credit purchases you make so that the total doesn’t surprise you.

Q: What other ways can consumers show their generosity without going over budget on holiday gifts?

A: Do it the old-fashioned way. Who would not like to have a home-baked gift of holiday cookies or cake? Another way is to make small gifts. There are usually several holiday magazines that have ideas on how to make gifts for friends and relatives that can be made for modest costs.

Q: Is it better to shop online to minimize in-store impulse buying?

A: It is just as easy to be an impulsive buyer online as in a retail store. One thing to note when shopping online is the shipping costs. Clicking that "buy" button is very easy, and the shipping costs are often hidden in small print. Shipping costs are especially relevant when shipping to Hawaii. Having a list is a good way to control impulse buying both at the store and online.

Q: What is the best way to make the most of your limited budget?

A: First, almost everyone should have a defined and limited budget. Don’t let guilt drive your gift-giving. It is the thought that counts, and almost everyone who receives a gift gets great joy out of being remembered. It may sound trite, but this time of year it is the thought that counts.

Q: How can consumers avoid getting caught up in the endless marketing messages and stay focused on their budgets?

A: Never forget that the purpose of marketing, in almost all cases, is to sell a product or service. The idea is to get you to make that additional purchase. Try to treat advertisements as information and not be influenced by their message to buy, buy, buy.

Q: What’s the best way to track down deals?

A: There are lots of good deals, and they require hard work. I don’t recommend that you stand in line for 18 hours to take advantage of Black Friday specials, but by beginning your shopping early the opportunity to spot good values increases. Value is the key here. In Hawaii there are a number of craft fairs where local products can be purchased at reasonable prices, and these local products are greatly appreciated by our friends here as well as on the mainland.

Interviewed by Kristen Consillio. "Akamai Money" seeks out local experts to answer questions about business in Hawaii. If you have an issue you would like us to tackle, please email it to business@staradvertiser.com and put "Akamai Money" in the subject line.