Mellody Hobson: Holiday Budgeting
Oct. 20, 2005 — -- Although the official start of the holiday shopping season -- "Black Friday," the Friday after Thanksgiving -- is 36 days away, now is the time to begin thinking about your holiday gift list, shopping approach and the all-important budget. With energy costs predicted to skyrocket, consumers may want to get a jump on holiday shopping immediately.
In light of the effects of Hurricanes Katrina and Rita as well as high prices at the pump, are retailers expecting a less-jolly season this year?
The holiday shopping season generally accounts for 25 percent to 40 percent of a retailer's annual sales, making it a critically important time for most businesses. Interestingly, retailers are expecting greater sales at the register this season. According to the National Retail Foundation 2005 Holiday Consumer Intentions and Actions Survey, the average consumer plans to spend $738 this holiday season, up 5.1 percent from the previous year. The NRF is expecting holiday retail sales to top $435.5 billion.
What are retailers doing to encourage consumers to get a jump on their holiday shopping?
We are already beginning to see some holiday ads on the airwaves and online. According to the National Retail Foundation, 28 percent of online retailers said they will begin their holiday marketing campaigns earlier this year than last. Traditional brick-and-mortar merchants are also getting into the act. Abercrombie & Fitch is reportedly going to display its holiday-season merchandise a week earlier than last in my hometown of Chicago, and Marshall Field's is already making markdowns on select holiday merchandise!
With increased gasoline prices, will it cost you more to shop online and have your items shipped this holiday season?
No. According to the National Retail Foundation, 79 percent of online retailers plan to offer free shipping -- with certain conditions -- this holiday season.
What are some things you can do now and in the coming weeks to relieve yourself of the financial stress of the holiday season?
Additionally, do not forget the old cliché, "let your fingers do the walking…" as calling before you shop can save you time and precious gas money.
Mellody's Math: If the average American charged their holiday expenses of $738 and paid only the minimum per month, with an average annual percentage rate of 13 percent, it would take eight years to pay off the debt!
Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is ABC News' personal finance expert. Matthew Yale and Aimee Z. Daley contributed to this report.