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Watch The Financial Pitfalls Of Holiday Shopping

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Nov 30, 2007 8:37 pm US/Eastern

Watch The Financial Pitfalls Of Holiday Shopping

Reporting
Paula Ebben

BOSTON (WBZ) ―

Click to enlarge 1 of 1: Be sure you hit the stores knowing what you are willing to spend.
Hiroko Masuike/Getty Images

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With three weeks left in the Christmas shopping season, how is your budget holding up? With all those tempting presents and a list that never seems to end, many shoppers find it hard to keep their finances organized.

The first rule of holiday spending is to set a budget and try to stick to it.

"An important thing to keep in mind when you are budgeting for holiday spending, is that your shopping budget has to be a part of and should be a part of your larger budget," said Bruce Spitzer of the Mass. Bankers Association.

That means that although it's easy to use credit cards now, you need to think about how much debt you can really carry. Spitzer says your balances shouldn't get so big that you can't pay them off in two to three months.

"We have all been there, when those bills come in, and you say 'Oh my.'… what did I do? It's nice to be generous at holiday time, but you don't want to put yourself in a hole that you can't climb out of."

That also means being smart about individual store credit cards.

"The offers sound tempting but be aware of trying to apply for too many store credit cards," Spitzer warns. "They will tell you, that with this purchase you will get 10 percent off… But those credit card applications can add up, and can actually have a negative impact on your credit history."

Another good rule - make sure you understand store policies when it comes to returns.

"You basically need to do your homework and understand what the policies are at the places where you shop, including online shopping," Spitzer said.

Keep in mind all the incidental expenses that come around this time of year, like tipping babysitters and hairdressers, and how much it costs to make and send holiday cards. It can all add up pretty quickly so it helps to plan ahead.

Visit the Mass Bankers Association web site for more holiday shopping tips.