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The Savings Game

Planning ahead can help keep holiday spending out of the red

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October 25, 2006

The presents are wrapped and in the closet, waiting for the right time to come out. It's only October but my wife, Georgina, and I are done with our holiday shopping.

I admit to some trepidation at telling you this, knowing hate mail will come from those who'll say we don't have any holiday spirit.

If by holiday spirit you mean rude pushing and shoving in crowded stores in December, you are right. (Ditto for sitting in front of the computer for hours filling online shopping carts.) If you mean getting into credit-card debt and spending extravagantly, you are right again.

Instead, we choose to lift our spirits and feel the joy of anticipation by doing our "holiday shopping" here and there throughout the year, always keeping to a budget we won't exceed.

True, we may miss a preholiday sale or the season's "must-have" item the marketers push. But with more time to look, we are more likely to find the right gift for the right person for the right price. And we'll spread the cost.

One warning: If you don't have the discipline to control your spending, you may end up buying stuff all year long and splurging again at holiday time. Before you try our method, make sure you are committed to setting up and sticking to a budget that includes all holiday-related expenses, such as parties, trees, and decorations, and buying and mailing cards.

How much to spend is a personal matter. I've seen surveys that say American households, on average, have spent as much as $1,000 during the holidays, a figure likely to create a hole in the typical family budget.

If money is tight, why not agree on a no-gift-exchange policy with friends and relatives. You can enjoy time together, but there is no need to spend money on gifts.

When you do give gifts, one of time can be far more appreciated than money.

For an elderly relative or neighbor, for example, consider giving a coupon for services, such as mowing the lawn or helping with the housecleaning. Do make sure that they don't see it as an intrusion to their privacy or independence.

Or, instead of buying expensive toys you can't afford, entertain your kids with original stories. Georgina enjoys making little books for our grandchildren, who are 5 and 3, by pasting pictures of places we have been to such as Disney World and making up stories reminiscing about our visits.

Not a writer or storyteller? You still have choices. For all the electronic gadgets aimed at kids and waiting to drain your wallet, simple toys such as building blocks, modeling clay, crayons and paper, and paper airplanes have proved to be loads of fun with our grandchildren, particularly when we all play together.

When shopping for gifts for the children, consider also those that teach about the value of money. One I can recommend for younger children is the music CD "Mission 1 Celebrate Saving!" with 15 catchy tunes.

The CD, which has received praise from educators, is the creation of Sam X "Sammy" Renick, a songwriter and children's author who tours schools around the country with a life-size costume of the character Sammy the Saver, a rabbit with the savings habit.

The CD is available from Renick's The It's a Habit! Co. (www.itsahabit.com).

Another gift that older children -- and adults -- may enjoy is the board game Look Out Wall Street! (information at www.lookoutwallst.com). Players try to get the most money by investing in stocks and bonds. Luck, as it does in life, plays a large role in the form of "random events," including bull and bear markets.

The game's creator, Kathleen Ryan, said she was inspired by John Bogle, founder of the Vanguard mutual funds and a champion of low-cost investing in index funds. Bogle has endorsed the board game as "a fun game that teaches valuable lessons about investing."

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