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HSFPP Weekly Update # 144—Shopping Smart During the Holidays

Message from Bob: This will be our last update for this year. The first update for 2006 will go out January 10. We hope you have a wonderful vacation with family and friends and that you get some well-deserved rest.

Message from Chris: Tis the season to be spending. That’s what retailers want you to think. This is the time of year to put your consumer knowledge and your budgeting and smart-shopping skills to use. Although teens may not have credit cards to max out now, the spending habits they develop as teens will likely continue when they do have credit cards, and bad habits with credit are hard to break. The holidays are also a good time to save and invest. Money saved from smart shopping and cash gifts can be put to good use in savings and investment accounts.

 

Related Update:

Update #131 - What is your Shopping IQ? - 19 August 2005

 

Web Site Pick of the Week:

http://www.bankrate.com/brm/default.asp

Bankrate.com’s Web site includes financial articles, calculators, and other tools to inform and assist you on financial matters.

 

Notes to Educators:

Have students read this week’s article In the New$.... For their activity, have them make a spending plan for the holidays and track their holiday spending in a notebook. Also have students write out their answers to the discussion questions and use their answers in a class discussion.

 

Discussion Questions:

Write your answers on a sheet of paper for use in class discussion.

1.) About how much did you spend on gifts and other holiday-related items last year?

 

2.) As a result of developing a budget (in an activity early this fall) that reflects your short- and long-term financial goals, will you spend more, less, or about the same amount this year?

 

3.) Do you plan to consider not only buying gifts, but also making them or offering your time as a gift?

 

4.) In what ways can you shop more intelligently this year compared to last year?

 

5.) How much do you really comparison shop?

 

Follow-up Activity:

4-H Agents & Parents Who Home School: (For those who have not used the Student Guide, it is available at the HSFPP portal, http://www.nefe.org/hsfppportal/index.html.)

Unit 1 and Unit 3 have forms for making financial goals and budgeting. Have teenagers develop a plan for managing their money. Determine some short-term (birthdays, putting $25 - $50 into a savings account each month) and long-term goals (college, for which there will be many unexpected expenses, i.e. books, transportation, eating out, entertainment, tickets to games and other events, as well as possible emergencies).

Also have teens develop a spending plan for the holidays and keep track of their purchases in a notebook.

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History or English Class: When and how did retailers turn Christmas, Hanukah, and Kwanzaa into the commercialized holidays they are today? Research this and write a short essay.

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Math Class: (This activity should be used while the class is learning about statistics; otherwise students will simply be learning how to use a calculator. It would be helpful if students use TI-83 or similar calculators.)

Do a statistical analysis of how much each student plans to spend for the holidays. Find the mean, standard deviation, the minimum, quartile 1, the median, quartile 3, the maximum, and the inter-quartile range.

Example: Using these numbers: {42, 17, 41, 36, 49, 31, 49, 41, 42, 34, 38}
Mean = 38.18. Standard deviation = 8.95. Minimum = 17. Q1 = 34. Median = 41. Q3 = 42. Max = 49. Inter-quartile range = 8 (42-34).

 

In the New$... Saving for the Holidays

Back in September, you were probably learning about setting short- and long-term financial goals; distinguishing between needs and wants (Unit 1 of the HSFPP Student Guide or Web portal where you can access the Student Guide online at http://www.nefe.org/hsfppportal/index.html); and developing a budget (Unit 3).

The holiday season is now here. When developing your budget, how many of you entered under variable expenses the birthday and holiday gifts you give to others? This season is probably the hardest time to stick with the financial goals you set in September and keep within the budget you developed in Unit 3. Some of you may have had saving for holiday gifts as one of your short-term goals back in September. If you did, you are already off to a head start. Being able to make and follow a plan for managing your money is one of the first, and most important, ways to be financially successful.

If you made a plan and did not follow it, or you didn’t think about holiday spending at the time, it’s not too late. You can still decide on financial goals and make a plan for them now. It is also a good idea to make a separate plan for holiday spending so you can buy gifts and not overspend. Make a list of every person and everything you usually spend for during the holidays.

Another good idea for the holidays, as well as year round, is to track your spending. By doing this you can evaluate your decisions and make better use of your money. If you don’t know where your money goes, how can you change your spending habits? Give yourself enough time to comparison shop to get the best price possible and don’t let salespeople talk you into anything you don’t really want to buy. Also leave the credit and debit cards at home. Bring only enough cash to spend on what you decided in your holiday spending plan. Many people pile up charges on their credit cards during the holidays and don’t pay them off until the beginning of summer or later. It’s much better to save the money ahead of time and avoid paying interest.
 
If you need money there are many ways to earn extra cash. Your parents might pay you to do household chores that you normally would not be expected to do, such as cleaning the oven, something that often needs to be done after Thanksgiving to get ready for the upcoming holidays. Your own family and others might need somebody to watch younger children while shopping or going to holiday parties. Shoveling snow is a good way to earn extra money during the winter. If your parents usually shovel the snow you can give this as a gift to them. Don’t rule out a part-time job. If you have not saved the money for holiday and birthday presents, you will find that many retailers are busy now and could use your help. Then again, if you prefer taking it easy during the holidays, but have to work then to buy presents, keep in mind that you made your choice; and, by saving for presents all year, you can take it easy next holiday season!

This might be a good time to revise your short-term financial goals and plan for your future. This will help you use your money wisely. Think about your needs vs. your wants, what is coming up in the future, such as junior or senior prom, and save for unexpected events—they do happen; just ask anybody who owns a vehicle that needs repairs. By learning to plan and meet reasonable financial goals, you can avoid so much of the worries about where the money is coming from; and you can have more fun along the way!

By Chris Hart, Senior in Telecommunications at the University of Kentucky

 

Kentucky High School Financial Planning Program

http://www.ca.uky.edu/fcs/hsfp

The purpose of the HSFPP weekly financial updates and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP and the weekly updates meet Kentucky core concepts. The Web site and weekly updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page.