December 8, 2010 • By Daisy Patino

During the holiday season, it is almost impossible to shop without getting into debt. According to financial expert Rodney Anderson , 40 percent of the annual credit card debt of Americans comes from holiday shopping. This comes as no surprise. There are hundreds of jaw-dropping sales and ads tempting and prodding the individual to splurge during the holidays.

 

 

Take the Target ad -- one of the most noticeable this season. It is a series of TV commercials portraying the typical female shopper "training" the for holiday season - things like lifting weights so she's fit enough to carry multiple bags with one hand. According to the National Retail Federation, department stores make up to 40% of their income during November and December. While lifting multiple Macy's bags with one arm may take strength, it takes equal or greater to keep that credit card un-swiped.

 

 

According to a survey by the Consumer Federation of America, more than half of consumers will spend more than they did in 2009 this holiday season. What's more, many of these consumers have not finished paying for their debt from last holiday season.

 

 

 

 

 

Most Americans think that holiday season is about maxing out their credit cards. Something else to keep in mind before furiously swiping your credit card at Barneys : credit cards have interest, which means that in the long term you will end up paying double the original price at the time of purchase. Is that leather quilted bag really worth it?

 

 

Eduardo Pose, 39, says that buying expensive gifts for his loved ones makes him happy. Meanwhile, he's $130,000 in debt from medical school loans.

 

 

"I like to splurge! I like to give my family good things even though I can't afford them. I feel that the most expensive the item, the more they feel like I care. I know this shouldn't be the case but that's how I was raised," said Pose, a manager at McDonald's in Miami, Florida."When I was younger, my parents always told me not to show up anywhere empty handed, even when I was just going to a friend's house for dinner. Also I feel good giving. It's like when my sister tells me not to get her anything, yet her face brightens when I give her that Urban Outfitters gift card!"

 

So, say it's not Eduardo Pose's fault that he spends beyond his means, especially around Christmas, who's the blame?

 

 

Americans have been taught at a young age to correlate love to money. Every woman wife wants her husband to help them move up in social status.

 

 

"It's a fascinating phenomenon if you stop and think about it. People are willing to damage their current and future financial situation in order to keep up with the Joneses," said Brian Kim, the originator of a self-improvement blog called briankim.net.

 

The most shocking part of the problem is not the obsession with keeping up, but the extent that people will go to just to keep up.

 

 

"Since it seems as if more and more people are living 'the life' now and whether that's due to the ease of credit, advertising, or the media showing the lifestyles of the rich and famous - it makes people wonder how they're able to afford it and why they can't, so in an effort not to get 'left behind', they start trying to keep up," said Kim.

 

 

Rachel Mendez, 20, of Aventura, Florida is unemployed, but reveals that buying a new pair of shoes instead of paying her rent is a priority for her. Why? Shoes will raise her social status.

 

 

"If I have expensive shoes and a stylish outfit, I'm going to look expensive. Looking expensive and like you come from a good family is very important to getting a job," said Rachel. You are treated by the way you are seen. You have the hottest shoes on; you will be treated like the hottest thing around."

 

 

Millions of people in America are haunted by this myth: If you look good, then you must be good.

 

 

This may be true in many cases, but people mistake quality for quantity. Instead of breaking the bank, buy good things that will last for a long time.

 

 

 

 

Remember that stores like to take advantage of their consumers on holidays. Stores know what items are going to sell during the holidays, so they may increase the prices of these items. According to Charles Wheelan, author of Naked Economics, the smart thing to do is to wait until the item is no longer "hot" to buy. He mentions in his book that this usually happens during January and February when everyone is without money or in debt.

 

 

Stores know that not many people are going to buy during these periods so they don't have anything to risk by lowering prices.

 

 

Like everything else, there are exceptions to the rule. There are individuals whom would rather not get gifts during the holiday. An experience is worth more than a fleeting material present.

 

 

"This holiday I'm asking my parents to not give me Christmas gifts like years past but to give me the money for my semester abroad in Italy," said Maria Mendoza, a 19-year-old college student. "I feel like this is a good way of investing in my education and expanding my knowledge of the world. I feel that, that experience is more valuable than the pair of Christian Louboutins that they were going to buy me."

 

 

Something that can be agreed upon: it is time to stop spending.

 

 

 

 

There are simple tricks to help you spend less during the holiday season and still have money to save!

 

 

1. By starters, edit your shopping list. Instead of buying a gift for every person you interact with on a daily basis, buy only for your immediate relatives such as parents, kids and spouse (and no! the nice post office lady does not count). All other individuals will be more than happy with a heartfelt card.

 

 

2. Before leaving your house, make sure to leave all credit cards at home. This way you won't have the temptation to use them while salivating over that Coach bag. Bring cash or debit cards only!

 

 

3. When picking out the presents: Make sure it is something that can be used all year. Do not buy seasonal items such as thick jackets or ear muffs. Chances are that they do not live in a place where it is cold all year round and your present will end up in the basement next to the Christmas tree.

 

4. Also do not buy the first item you see. Compare prices and make sure you are getting the best deal.

 

 

5. It's very difficult to shop for someone else without temptation of buying for yourself. So before you buy something, ask yourself: do I really need this or do I just want it? Another trick to keep in mind: if you see something you absolutely feel like you NEED. Leave it. If a week later you still remember it and still feel that you need it, then you can go head and buy. Chances are you won't go back.

 

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