Question: What can consumers do to prevent overspending during the holidays?
KEVIN SHIINOKI
>> Position: President, Hawaiian Collectors Association
>> Phone: 948-9309
>> Age: 46
>> Education: Bachelor’s degree in business administration, University of Washington; University of Hawaii William S. Richardson School of Law |
Answer: The most important thing for a consumer to do is to think through the gifts you intend to purchase and determine the amount you have available to spend on each gift. Make a list, along with a budget, and stick to it. Consider making inexpensive gifts for friends and family. Continually remind yourself to avoid the temptation to spend more than you have.
In addition, consumers should protect their personal and financial information. Be careful about giving out information including a credit card, bank account or Social Security number over the phone and online unless certain of the authenticity of the other party. Monitor accounts and immediately report any suspicious or unauthorized purchases to your bank or credit card provider.
Importantly, consumers should also monitor their credit report. If you believe your identity has been stolen, contact your local police department and visit www.ftc.gov/idtheft for information on what you should do.
Q: How can consumers create a budget and stick to it?
A: Sticking to a budget takes discipline. Write down the gifts you intend to purchase, the amount you plan to spend on each gift and an overall amount you intend to spend on all of the presents combined. As these gifts are purchased, write them down and track the amount spent so you can compare it to what you had budgeted.
>> Remain vigilant in only spending the overall amount planned.
>> Allow for enough flexibility to stick to a total amount to spend for all of your purchases so that you can adjust each gift based on the actual prices you pay. For instance, if you budget $10 for a toy for a cousin but only spend $5, you have money to spare if another present that you hoped would cost $10 really costs $15.
>> Shop around online and at retail stores to look for the best prices available.
>> Remember it’s the thought that counts, not the size of the gift.
Q: Many consumers turn to credit cards to purchase holiday gifts. How can shoppers use credit wisely?
A: When used properly, credit can be helpful, but if not, credit can become a difficult burden. Purchasing gifts using a credit card means they will have to be repaid at some point.
Know the terms and conditions of your credit cards; shop for low interest rates; make payments on time; and understand the ramifications of making a late payment or missing a payment. Know the ins and outs of credit reporting and its impacts on building a good credit score, which is used to determine eligibility for future credit including credit cards, auto loans and home mortgages. For more information visit www.askdoctordebt.org or www.consumerfinance.gov.
Q: What are some ways consumers on tight budgets can reduce holiday costs?
A: >> Stick to your budget.
>> Shop for bargains, look for simple or inexpensive gifts, seek sale-priced merchandise or search for special offers such as a two-for-one deal that allows you to buy two gifts for the price of one.
>> Consider making gifts for friends and family.
>> Give gift cards, which can be purchased in specific increments so you stay on budget.
>> Limit the number of gifts you purchase.
Q: What should consumers do if they find themselves in debt after the holiday season?
A: First, realize you are not alone. Many people find themselves in debt after the holidays. Second, be honest with the fact that you are in debt and address the issue head-on. This requires sacrifices in the short term but is well worth it in the long run.
If you are having trouble making payments or getting calls and letters about a debt, don’t ignore them; it won’t make the debt go away. Contact the creditor to discuss alternative payment arrangement to identify options for making things more manageable.
If you are being contacted by debt collectors, talk with them to be sure the debt is indeed yours, and discuss applicable repayment options. Remember, they aren’t the enemy. Legitimate debt collectors only wish to contact you to discuss the account, verify its accuracy and work on a helpful plan for resolution.
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Interviewed by Kristen Consillio
