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HAVE A HAPPY, CREDIT-FREE CHRISTMAS

By Frances McGuckin

Are you going to shop 'til you drop this Christmas, or are you going to practice some restraint and keep control of your credit card spending?. Why not make a New Year's resolution in advance and promise to keep the credit card bills down. Consumer bankruptcy is on the rise-why risk becoming a part of those dismal statistics?

A recent study asked children what they wanted most from their parents, and the answer was so simple and cost free. Time. Time is what your children want, so why overspend on material items when spending quality time with your children is a present they will never forget?

Before you go relentlessly shopping and spending hard-earned dollars, sit down and make a plan of action. The first step is to update or start a household budget and know how much it costs to maintain a house and family for a year. Many people don't have a clue of the monthly cost of running their household.

Once you have this information, divide the amount by twelve months. Now you have the monthly cost of operating your household. Look at your income and see if there is anything left over each month. This is the amount you should be spending on gifts. If you don't have enough and are going to use credit cards to finance Christmas, set a spending limit based on how much you can afford to pay off the card each month, based on your budget.

Banks love this is the time of year-and so do the retail stores. Canadians live on credit with very few people using credit cards wisely. The smart people charge only what they can afford to pay off within thirty days. This eliminates the high interest charges and racks up points at the same time. The not-so-smart live for today and pay for it forever, usually minimum balance payments with a high interest component.

The astute shopper will start a new budget in January and allocate a certain amount each month for gift purchases. By making a monthly allowance, gifts can be purchased during the year on sale and put away for birthdays and Christmas.

Make a practical Christmas list based on your budget and don't buy if it's not on the list. Small, thoughtful gifts say just as much as expensive presents. Give from the heart and not from the credit card-you will enjoy your Christmas without worrying about the aftershock.

This weekly 'Business Concerns' column is available for Syndication.  Please phone or e-mail inquires to contact@smallbizpro.com

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