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Extension service news: Spend wise this year

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By Judy Hetterman

With the holiday season upon us, it’s important to remember to reduce holiday stress and the after-holiday bills by developing a budget for gift giving, food and entertainment expenses. 
According to the National Retail Federation, in 2011 the average shopper will spend $704.18 on holiday gifts, food and decorations. This year’s spending forecasts have declined from recent years and indicate a shift toward value and self-gifting (buying gifts for yourself). Stores are increasingly aware of the need to entice shoppers, so consumers can expect extended discounts and sales, perks and responsive customer service.
The best strategy is to start by planning your gift-giving in advance. Planning gives you time to shop for the perfect gift at the right price, and to search for the best sales. Make a list of all friends and family members for whom you normally purchase gifts. Talk with family members and set a spending limit for gifts, as this helps everyone budget and shop effectively. Before heading out to do your holiday shopping, estimate the dollar amount you will spend on each individual and exert self-control while shopping to stay within your spending limits.
You may also want to consider developing a new tradition with friends and family. Instead of giving gifts, consider a nice dinner out where each individual is responsible for his/her bill. Instead of traditional gift giving, consider a gift swap, where you pick names out of hat and purchase small, thoughtful gifts for that person.
Also remember to factor in holiday entertaining costs. Sometimes one family member ends up bearing the burden of purchasing food and drink for entertaining year after year. Instead, consider having a pot-luck dinner with family and, in addition to spreading out costs, be sure everyone participates equitably in shopping, preparation and clean up.  
While shopping, keep in mind that you are less likely to overspend if you pay with cash, as opposed to using a credit card. A credit card is very convenient, but because there are no immediate consequences for using it, you are more likely to overspend. If you are using cash, once all of your cash is gone, you are finished with your holiday shopping. Therefore, spending cash makes you much less likely to overspend. Layaway is another option that can help you avoid using a credit card. If you decide to use a store’s layaway option, check the return policy and keep track of all payments. 
Finally, it is never too early to start planning for next year’s holiday season. Take advantage of after-holiday sales and discounts to do some early holiday shopping for next season. Also consider opening a holiday savings club account at your local bank.