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Don't let Black Friday put you in the RED

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Michelle Blog PhotoIn 2011, 20% of men and 14% of women said they blew their holiday shopping budget. Here's a few tips to stay on track this year.

  • Make a list of items you are shopping for and the maximum amount of money you're willing to spend. Then, stick to it.
  • Shop with cash and leave the plastic at home. Consumer Reports has consistently found that shoppers who use credit cards spend more on holiday gifts than those who don't.
  • Just say no to credit card offers at the check-out line to avoid a debt hangover later. One possible exception to saying yes to a store credit card and its one-time extra savings is if you're buying something expensive and know you can pay the balance on time and in full.
  • Skip the warranty. Most warranties on electronics and household appliances just aren't worth the money since they usually don't break within the warranty period.
  • Free shipping offers are abundant at this time of year, so take advantage of them. Many are listed at freeshipping.org.
  • Haggling can save you money, even online via the phone, email or chat. Nearly three of five Consumer Reports survey respondents were successful in scoring a price break when they haggled.
  • Beware of getting drawn into "herd mentality", especially on Black Friday. Retailers hope you will be an impulsive shopper, which can lead to poor buying decisions. You may be able to save even more money by waiting until later in the season.
  • Avoid the temptation to earn rewards and bonus points on credit cards. Card issuers are increasingly attaching spending requirements to these offers, which may influence some consumers to spend up in order to receive their reward. Some credit card companies are also sending out blank checks to use just in time for the holidays; however, interest rates on these check can run 20% or more if you don't pay them off right away.

Remember, most people also enjoy a little creativity on the part of the gift giver. Consider a gift of service or an experience together instead of stuff. You can create some good memories by planning an outing, sharing a home-cooked meal, or volunteering together at a shelter or nursing home. Sometimes the best gifts are free.

Michelle Slawny, CFP®