Column: How to avoid a holiday financial fiasco

12/02/08 - "Black Friday" has come and gone, but consumer spending will (hopefully) continue right up until Dec. 25. And this year, Black Friday, named for the black ink accountants use to indicate profit, was the mark of a year in which the economy has suffered severely.In the last several months, several trillion dollars have been lost worldwide in the stock market, multi-billion dollar corporations have filed for bankruptcy, and the Dow Jones Industrial Average has lost about 3,000 points in the last 10 weeks alone. The situation threatens to rock the world in a way economists have not seen since the Great Depression.

In these times Americans, and citizens around the world, should be spending. It's during the times of economic prosperity when consumers should hold their dollars back. But since consumers do not spend and invest as they should, there are several things you can do to have a full stack of wrapped packages beneath your Christmas tree and still be able to pay off your credit card bill from November and December.

Shopping right now is easy. Because consumer spending has sunk, every store in their right mind is offering a sale.

On a day off, get on the RIPTA URI-Providence number 66 bus at the Memorial Union. From Kennedy Plaza, where the URI-Providence bus terminates, walk to Providence Place Mall and you'll see huge signs advertising big sales.

A round-trip on the RIPTA bus will cost $3.50, and you'll need whatever you plan to spend in the mall. I recommend paying cash. That way, you only spend as much as you have, and won't be tempted to use the minimum monthly payment credit cards offer. Providence Place Mall is one of the best places to shop in the northeast.

If you're looking at more high-end stuff, like Ralph Lauren, Brooks Brothers or Burberry, go to Wrentham Mall in Wrentham, Mass. To get there, take I-95 North and then hop onto I-495 North and get off at exit 15. There aren't any tolls. About a year ago I got a tie at Ralph Lauren for $14.97 on sale from a retail value of $119.97.

If you have put a dent on your credit card, try to pay it all off at once. If you can't, pay off as much of it as you possibly can, to avoid the excessive interest rates so typical of credit card companies. You'd think that in tough times they'd lower the interest rates, but credit card companies and sperm cells do have one thing in common: they only have a one in a million chance of becoming human.

According to money-zine.com, college students carry an average of $552 of credit card debt. If you have a high credit balance, even in to four-figures, you may have to consult a professional debt management firm. To avoid getting into one of those situations, avoid spending money on yourself and limit what you buy for others.

If you need to, say to yourself, "Do I actually need this?" Remember the difference between a need and a want. Leave your credit card at your house because this helps reduce impulsive spending. If you really want whatever you were going to buy, go back to the store.

If your budget is really, really tight this holiday season, there's a Salvation Army Thrift Store in North Kingstown, 6835 Post Road, right on Route 1. There's also a Johnnycake Center Thrift Shop at 1231 Kingstown Road, right on Route 138. It's really hard to dent your credit card at these places.

If you're in need of some cash, pay attention to posters and advertisements around campus. There are always surveys you can take to make a quick $20 or $40, particularly in the science areas.

Cheers,

Tyler