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CareOne Urges Consumers to Budget Properly This Holiday Season Better planning can lead to happier holidays says consumer finance expert

COLUMBIA, Md., Nov. 12, 2010 /PRNewswire via COMTEX/ -- This time of year, it's easy to get caught up in the festivities - stores are decorated for the season, favorite holiday songs can be heard and great deals are advertised everywhere you turn.

And while there's nothing wrong with some holiday cheer, consumers need to be careful not to get so caught up in the season that they lose all financial sense and buy just one more present for their kids, one more ornament for the tree or one more holiday splurge for themselves.

"This time of year, there are so many things tempting people not just to spend, but to spend more than they can realistically afford," said Jenny Realo, personal finance expert and executive vice president of CareOne Services Inc, one of the nation's leading debt relief companies. "It is vital that everyone takes a serious look at their financial situation to create a budget they can live with, not just for the holiday season but for the new year." The National Retail Federation estimates that Americans will drop $447.1 billion on holiday-related items in the months of November and December. The organization estimates that just shy of 30 percent of that - about $125 billion - will be purchased with credit cards, meaning that for many the financial burden of the holiday season will linger for months to come.

"While it's tempting to use the credit card and buy that dream gift for your spouse or children, it is so important to step back and think about if that purchase is such a necessity that you are willing to possibly spend the next few months paying it off," Realo said.

With Black Friday just a few weeks away, Realo says it's important that people plan now to make sure they are ready for the heart of the holiday season. She recommends consumers: Plan ahead and stick to the plan: Create a list of everyone that you are going to buy a gift for, what you plan to buy and the exact amount that you are willing to spend - and then stick to the plan. While some people enjoy browsing through the stores and buying whatever catches their eye, this behavior creates the temptation to spend more than planned and buy things that aren't really needed.

Scale down the gift list: Many people have lost their jobs or experienced pay cuts in recent years, so your friends and family will understand if you need to pare back the gift list this year. Include those nearest and dearest to you, but don't feel the need to give a gift to every friend, neighbor or co-worker.

Likewise, consider downsizing the Christmas card list or the number of people invited to your annual holiday party as another way to control costs.

Budget for everything you expect to buy: While many people budget for their gift spending, they often overlook the other expenses related to this time of year.

Don't forget to include things like Christmas cards (and postage), family photos, wrapping paper, food and decorations in your budget. And if you have children, don't forget to set aside some money to pay the sitter while you and your spouse go to the company holiday party or out for New Year's Eve.

Realo also has some suggestions for those who may realize too late that they have spent more than they can really afford. Realo suggests: Consider making some returns: If you have spent more than expected on holiday purchases, whether that is gifts for others or splurges for yourself, don't be afraid to return items to the store. While many stores have tightened up return policies in recent years, most retailers will still accept most items as long as you have a receipt and the item is unused.

Find ways to scale back: It may mean cutting your cable at the start of the NFL playoffs or eliminating your home or mobile phone, but look for easy ways to reduce expenses. Then allocate that money toward paying off your holiday debt.

If you miss your cable, you can always bring it back when your finances are in better shape.

Most importantly, stay calm: While looking at an unexpectedly high credit card bill may make it tempting to make a withdrawal from your 401(k) to help pay off the balance, Realo advises against making such rash financial decisions that could have long-term implications without taking some time to think about it or seeking professional advice. If you can afford the minimum payment (and hopefully a little more), make that payment and then re-examine your budget for the next several months to figure out what changes need to be made in order to pay the debt down faster.

About CareOne CareOne Services Inc. is a debt relief company formed in 2002 to provide consumers with multiple solutions to complex money issues. CareOne takes a holistic approach to assisting customers in debt and reviews each situation to create achievable financial solutions. CareOne's services include credit counseling, debt management, debt settlement, as well as free referrals to bankruptcy attorneys if that is in the best interest of the consumer.

CareOne also provides the My CareOne community (MyCareOne.CareOneCredit.com), a free online resource for consumers that includes educational tools, blogs and forums where more than a million people share their experiences and receive support from others in similar situations.

Headquartered in Columbia, Md., CareOne has helped more than 2 million people.

In 2009, it provided consumers with the tools and assistance to pay down more than $294 million in debt. CareOne provides services in 41 states. For more information, call 1-800-373-3225 or visit CareOneCredit.com.

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Jenny Realo https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=95420 SOURCE CareOne Services Inc.

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