Don’t Let Black Friday Put You inthe Red

With Black Friday looming, Dave Ramsey, the personal finance guru whose radio show reaches 6 million listeners a week, has one overriding piece of advice for holiday spending: don’t go into debt.

He recommends that people stick their Christmas money in an envelope and “when the cash is gone, stop spending. This will keep you on budget because if you overspend on Aunt Sue, Uncle Harry won’t get a gift.”

In fact, according to a survey sponsored by Huntington Bank in the five states it serves, most people do intend to pay for holiday purchases by using cash they have saved for that purpose. Of the 2,169 survey respondents in Michigan Ohio, Western Pennsylvania, Indianapolis and West Virginia, only 11 percent said they plan to take out a “loan” for the holidays by using a credit card and paying off the balance over time.

More West Virginians plan to pay cash compared to other states’ residents, according to the survey, and about half as many – 6 percent – will use credit.

George Mokrzan, Huntington’s director of economics, said the economic outlook for the region is good based on survey results that show people believe the real estate market is improving and that the economy is better than a year ago.

Perhaps because of this outlook, West Virginians plan to spend significantly more on the holidays this year – $1,303, which is an increase of $316 from 2012. Looking at all five regions, holiday spending is expected to be down, however; and Ohioans said they plan to spend $72 less than they did last year.

“The difference between West Virginia and the other states is West Virginia wants to spend more on the holidays as a result of their economic improvement,” he said, adding that other states’ respondents reported they will spend more instead on their family vacations next year.

The West Virginia trend mirrors the National Retail Federation’s predictions nationwide. The NRF expects sales in the months of November and December to increase 3.9 percent to $602.1 billion this year, over 2012’s actual 3.5-percent holiday season sales growth. In addition, predicts online holiday sales in November and December to grow between 13 percent and 15 percent over last holiday season, to as much as $82 billion.

To keep spending in check, Ramsey suggests making a holiday budget. He said to make a list with names, place amounts next to the names, and then stick to it. He offers a free online tool at http://mychrist mas

Responding to a request for comments on Facebook, some local residents said they make Christmas budgets and pay either by cash or debit card, or by using a credit card they pay off.

“(We use) a bank card and we stick as closely to the budget as possible. (It’s) hard not to splurge on the kiddos, though, but we do our best,” said Cortne Usenick of Valley Grove.

“We banished credit cards from our life long, long ago,” said Catherine Connors of St. Clairsville, who said they pay for Christmas gifts using debit cards or cash. “If we don’t have it, we don’t spend it.”

Joe Young of St. Clairsville uses Ramsey’s envelope system – not just at the holidays but year-round. “Some weeks we blow it, but all in all our batting average is pretty good.”

Brenda Wilson of Martins Ferry said her holiday shopping strategy includes buying gifts throughout the year. “I shop a little from each pay all year round. That way, when Christmas comes, shopping is complete – and without debt.”

Adam Valenti of Cranberry Township, Pa., said he uses his credit card to earn points and cash back, and pays it back every month, which several other respondents also mentioned.

Ramsey said the key is for people to plan ahead for Christmas so they don’t spend beyond their means.

“Christmas is not an emergency; it happens every year. Don’t use this as an excuse to overspend and buy things you can’t afford.”