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A December resolution

Ah, Christmas! It can either be a wonderful time of year or a season filled with stress because your family’s holiday expectations far exceed your income. Do you succumb to the seasonal guilt trip or hold a family meeting and announce everyone is getting coal in their stocking so there will be fuel to heat the house this winter?It’s not news that 2007 has been an economic disaster for many American families. Gas prices are now above $3 a gallon, increasing the cost of commuting to work along with the price of all transported goods. Economists predict the average family will pay $1,400 more to heat their homes this winter, while both the Wall Street Journal and the Associated Press are reporting the housing market may not rebound until late 2009.Future foreclosures combined with higher energy prices may impact all sectors of the economy, increasing unemployment. So, unless you’re wealthy enough to weather any impending economic downturn, it’s time for a December resolution. I chose to write the resolution in the form of a commandment because it looks more authoritative: “Thou shall not purchase what thou can not afford.” But you may prefer the modern vernacular: “Can’t pay – don’t buy.”Start your holiday shopping with a budget that does not depend on your credit line. Pay cash or use a debit card. Use credit cards only if there is money already in savings to cover the charges – in full – when the bill arrives.From now until Dec. 26, the words “Sale,” “Clearance,” and “Half-Price” will flash across television screens thousands of times each day. Retailers know they are facing a tough season, so expect to be tempted with all types of bargains. But before buying any gift, ask the question “can I afford this?” If the answer is no, walk away.In light of the current economy, even when a gift is within the budget, we may want to also start asking if it is practical.Practical gifts take care of basic needs such as food, clothing, shelter and transportation. Any holiday shopper on a limited budget should take care of the necessities first. Unwrapping a new coat may not be as much fun for a 10-year-old as finding a video game under the tree, but it sure beats freezing while waiting for the school bus. A college student may want an iPhone for Christmas, but she may actually need new tires, a pre-paid gas card or a bike to get around campus.No one should ever feel obligated to go into debt just to please everyone on the holiday shopping list, and there are alternatives to buying gifts. Offer parents with children a night out by providing free babysitting. Almost anyone, especially a single person, will enjoy a home cooked meal. The seniors on your list may need a ride to a doctor’s appointment or a trip to the grocery store. Become creative; find an ingenious way to celebrate the holidays without engaging in reckless spending.What’s the penalty for disobeying the resolution? Unfortunately, the punishment is grief. All offenders become voluntary indentured servants, promising to work days, weeks, or even years to pay off holiday debt plus accrued interest; thus, giving away the one thing you can’t purchase – time! Time better spent with family and friends, instead of working for credit card companies.The average American already works 45 hours per week, and many salaried employees report working 60-hour weeks. Christmas shouldn’t be an excuse for more debt. Unfortunately, most of the $800 American families spend on holiday gifts are charged to credit cards. That not only limits the amount of available credit a family has in case of an emergency, it also increases America’s overall indebtedness, making the nation weaker compared to other world economies.Enjoy the holiday with your family. But don’t sacrifice the time you will have to spend with them in 2008 by purchasing items you can’t afford during this holiday season.

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