Holiday hurdles can be defeated

Make a list, check it twice -- and stick to it.
By ELIZABETH LAZAROWITZ
NEW YORK DAILY NEWS
NEW YORK -- The dazzling red and green lights, the flashy gold-wrapped gift boxes, and the slick, sexy ads promising the deals of a lifetime can all be seductive.
Before you know it, you've whipped out your wallet, and in a glassy-eyed frenzy bought enough to fill Santa's sleigh twice over.
But, watch out! Behind that joy-filled December sleigh lurk the not-so-magical debt collectors.
Shoppers on average exceed their holiday budgets by $400, according to a recent survey by HSBC North America. There are some ways, though, to control yourself and your overspending habits:
Prepare to spend
Save up for your purchases ahead of time, advised Loretta Abrams, vice president of consumer advocacy and community development at HSBC.
"You can establish a separate account at your bank so that enjoying the holiday shopping season doesn't become a burden and doesn't negatively affect your credit score for months afterwards."
Nancy Ortiz, a legal secretary who lives in Brooklyn, had her bank automatically set aside money for her every month, socking away a total of about $2,000 for Christmas gifts. Ortiz was in the Times Square Toys "R" Us recently, picking up a Clue board game and a Pixel Chix electronic virtual friend game for her 8-year-old daughter. She comparison shops on the Internet to find the best prices to stay within her budget. "Hopefully, I won't spend it all, and I'll have a little left over for myself."
New York online shoppers expect to spend $675 on average for holiday purchases, making them the nation's biggest spenders of the season, according to an AOL survey.
Keep track
Before shopping, make a detailed, written budget and then track your spending.
"Without a basic plan, people just get caught up in the consumerism of the holidays," said Steven Smith, author of "Money for Life: Budgeting Success and Financial Fitness in Just 12 Weeks."
The biggest mistake people make? "Buying on emotion," he said.
Careful with credit
Using credit cards can be especially tricky, so if you're planning to pull out the plastic, beware. Don't charge up to your credit limit, Abrams said, since carrying a maximum balance on your card can dent your credit rating.
Try to use less than half your available credit, and if you go into debt, set a time limit -- generally three months is reasonable -- for repaying it.
It will take you seven years to pay back just $500 in credit card debt if you're just making a 2.5 percent minimum payment each month, given an 18 percent interest rate.
You'll also end up paying an additional $365.40 in interest for a total cost of $865.40, according to Bankrate.com. In addition, new federal regulations that go into effect in January require banks to charge a higher minimum payment, so you may get slapped with an even bigger monthly bill than you had expected.
The lure of stores offering deals for opening new credit card accounts can be strong, but make sure that the discount is larger than the interest rate you'll have to pay. Don't open too many new accounts at one time, especially if you're planning a big purchase like a house or a car in the near future, since a sudden increase in new credit can bring down your credit score, Abrams said.
Stay within reason
To stay on budget, trim your gift list.
"I've told my 5-year-old: 'You can't get everything on your list,"' said Denise Stickevers, a Long Island stay-at-home mom with two sons. "You want to make them happy, but you don't want to break the bank."
Shopping online, arming yourself with a list and limiting the amount of time you spend in a particular store can help shield you from the siren song of the gleaming cappuccino maker or the fancy digital camera, Abrams said. She also suggested giving practical gifts that will help boost the recipients' budgets, such as savings bonds.
Internet shopping can also help save time and gas money, and many online retailers offer free shipping during the holidays, Smith said. "You do far less emotional-based buying, and frankly, it's that much less of a headache."
Use the Web
Ditch traditional holiday cards and their accompanying postage costs in favor of free E-cards that you can find at Web sites like www.123greetings.com and www.moma.org, Smith said.
He also suggested giving creative gifts that require little money, such as a collection of photographs in a nice frame or a batch of chocolate chip cookies.
"People treasure that more than the latest high-tech device," Smith said. "It takes a little bit more thought, but it costs a whole lot less and means a whole lot more."