Five Last-Minute Shopping Tips

Dec. 16, 2008 — -- If history is a lesson, we know that people — especially men — are big procrastinators when it comes to holiday shopping.

Last year around this same time, the National Retail Federation released a survey that showed nearly one in five men had yet to begin their holiday shopping. Add to this the fact we are in the midst of one of the worst economic slumps in modern history, and you have what could be seen as the perfect holiday storm for shoppers.

But before you head out to your local retailer, check out these five last-minute tips on shopping, including important information about the return of a ghost of Christmas past: layaway.

Cash, charge or layaway

Do not use your credit card — use your debit card or cash. Although consumers are expected to spend 10 percent less this year than last year, the amount is still a hefty $831. Assuming you spent your entire $831 at one store, charged the gifts to your credit card and paid just the minimum, it would take you more than 11 years to pay off the bill and would cost you an additional $861 in interest.

Another alternative to credit cards is purchasing items on layaway. Major retailers like Kmart, Sears, Marshall's and Burlington Coat Factory are turning back the clock to the days when consumers would put a deposit down on an item and make payments until they owned it. At most retailers, you are required to pay a small service fee of $5 and put 10 to 20 percent down on the item. There is one major caveat — many retailers are suspending their layaway plans between now and Jan. 1. However, there are online options like eLayaway.com, which connects you with a network for 1,200 stores to help you set up a layaway purchase plan.

Get group gifts instead of individual gifts

If you have multiple people to buy gifts for in one family or even office, consider purchasing one item that everyone can use. Gift baskets are the easiest. You could, for example, buy a couple of DVDs, popcorn and a box of candy and package them as a gift of "movie night" for the family. Similarly, consider bundling hot chocolate and cookies or tea and a cake for the group and labeling it "snack time." There are limitless possibilities, all of which can be more economical than buying individual gifts.

Give the gift of service

For me, one of the gifts I am giving friends this year is a free day of financial planning for the holidays this year. I will spend as many hours as needed to help implement a budget and investment plan for my friends and family. Offer to do the same with whatever expertise you have: If you are a great cook, offer to make a meal or to teach the person how to cook. If you are good at fixing things, give the gift of your services to someone to, say, help them with a leaky faucet or any small home improvement.

One additional item you could give would be the gift of a special day for someone in your family. I recommend giving a child a calendar for 2009 and having the child select any day to celebrate. On this honorary day, give the child the opportunity to make all the choices — for example, the menu, bedtime hour, what to watch on television, etc.

Just ask for a discount

This is the year of the sale. You absolutely should not buy anything that is not on sale! While most retail stores have strict policies on negotiating prices, they may be more lenient if you have good reason. For example, if a pair of jeans you really want are going on sale in a few days, ask to buy them at the sale price. Or if you see a jacket you really like but there's a slight imperfection on the sleeve, ask for 20 percent off. You'd be surprised the money you can save just by asking. And like I said, the worst that can happen is the store says "no."

Also, I am a big believer in counting. If there are a number of identical items in the same size, there is a high probability the item will go on sale — even in the waning days before Dec. 25.

Give a gift you deem priceless

For this holiday season, consider writing a thoughtful letter instead of buying a gift. I recall Oprah Winfrey being asked what she was going to give Denzel Washington for Christmas, and she simply said she was going to write him a really nice letter. That stuck with me, and it is something I am doing this year.

Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Matthew Yale contributed to this report.