By Ron VandenBoom
Holiday shopping may lead many to the financial poorhouse this holiday season if they don't take the time to plan for their holiday expenses.
"Many people fail to ask the question 'Is this a want item or a need item,'" said Judy King, branch director and counselor at Consumer Credit Counseling Service (CCCS) in Havre.
King points out that the biggest mistake most shoppers make is that they turn to their credit cards when the thing they want is not in their budget.
"Society puts a lot of pressure on people to buy gifts when they can't really afford it," she said.
King said that after the holiday season ends and the bills start to roll in is the busiest time of the year for CCCS as people begin to realize they have gotten themselves into trouble paying off the debt.
The purpose of CCCS is to help people who find themselves behind the financial eight ball to organize their finances and get themselves back on track.
"Our main goal is to get clients to financial freedom," King said.
The first holiday tip King recommends is to establish a budget for holiday shopping.
"Many Americans don't have a holiday budget, and those that do often don't stick to them," she said.
Budgeting is something that, according to King, is not really taught to young people and even those people who know how to budget will sometimes turn to credit cards to pay for things that are not in their budget. She estimates that about 30 percent of the people who end up in her office are there because of gifts they bought for other people.
The first step CCCS recommends consumers take to protect themselves this holiday season is to create a plan. Decide how much money to spend before you start spending it -- In other words, create a holiday budget. Once you've decided how much you want to spend, put it in writing and stick to it.
The budget should include gifts, holiday meals, gift-wrapping, greeting cards, postage and travel expenses.
Consumers should also make a list of all the people they intend to give presents to. Divide the list into categories and decide how much you want to spend on each category. This will give you a rough idea how much to spend on each person.
Plan a time for shopping early and shop around for the best price. Avoid the last-minute rush and the impulse to buy what is not on your list.
King said there is no particular age that is more common to suffer financial problems than any other and notes that her clients range from those in their 20s to people in their 80s.
She did however say that more seniors are seeking out CCCS that has been the case in the past. She attributed the shift to seniors overspending on things for their grandchildren.
Another group King said were particularly vulnerable to financial difficulties are college students who are having their first fling with credit cards and are also carrying large student loans.
King said that one of the signs credit card holders should look for is a balance that continues to grow even thought you make a regular monthly payment. This indicates that interest on your outstanding balance is greater than the minimum payment.
Another sign she warned card holders to look for is using the credit card to pay other bills.
"If you're paying your bills with credit cards, she said, "you're in trouble."
King offers a free counseling session to examine the clients income and debts. If the client wants to use the services of CCCS, they will be charged a $25 fee to set up the account and monthly payment arrangements are made to CCCS.
"Usually," King said, "once the client has signed on with us it will keep creditors from pestering the client.
"I've seen clients walk out of here like the whole world has been lifted from their shoulders," King said.