What Do the Holidays Mean for You and Your Credit?

Sometimes we focus so intently on the commercial aspects of the holiday season that we lose sight of other elements -- the reasons we originally learned to celebrate. As we move into a hyper week, carve out a few minutes to consider what the season means to you. Whatever your beliefs, what do you treasure most about your traditions? How do you communicate your holiday heart to those you care about?

I cherish this time of year -- the music, decorations, parties, food, sharing, and lore. My holiday habits evolved from a liberal Catholic upbringing that combined New York City with Alabama Gulf Coast traditions. Now I embrace the uplifting spirit, shared values and customs embodied in Christmas, Chanukkah, Kwanzaa, and Solstice.

As a credit wonk, I'm hoping you didn't break your piggy bank or charge up credit cards to impress your loved ones with lavish gifts beyond your budget. If you did overspend, as you're sitting around kibitzing while sipping on wassail, hot chocolate or eggnog, you might want to pick the right moment to tell your dear ones you're going to change your credit and debt habits. Let them know you're establishing a plan to manage your money more effectively during 2008 -- that you're committed to improving your credit rating, which means you must eliminate your debt.

When friends and family are accustomed to over-the-top spending, they will understand you're scaling back because you're taking better care of your finances. You may be amazed by the support you receive.

According to a 2007 Gallup poll, Americans expected to spend an average of $909 during this holiday season. That's about the same amount as last year. If your finances are crunched, this may be far beyond your discretionary spending range. And for those who put all their gifting expenses on high interest credit cards to be paid off over time, the total cost will be much greater. As a friend said last week, "The thought of all this debt and credit stuff is enough to destroy a person's holiday spirit."

For most of us, there is a trade-off between what we'd like to give and our budget constraints. We compromise. We find gifts that recipients will enjoy for a price we can afford. We seek out ways to communicate our care within our means. We don't allow giving to lower our credit scores. If we're artistic or crafty, we bake, we make gifts. Or we find something unique that doesn't cost a fortune. Our talents become our gifts. See my column, , for ideas.

Sharing your abilities, over time, is likely to mean far more to your family and friends than some store-bought bauble. And it will prevent you from amassing debt. If all of this advice has arrived too late and your credit scores are headed on a downward decline, the new year is a perfect time to set goals and start fresh to clean up your spending habits. For now, set aside thoughts of financial challenges.

Rejoice and celebrate your family, friends, and blessings during this season of delights. In spite of the emphasis on "stuff," remember what makes this season meaningful for you. May you experience truly happy holidays.

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