Little bit of good news is pushing up the market today. Commerce Department said that the personal income has gone up six straight months and spending has increased four straight times. Consumers’ personal spending rose by 0.5 percent in January, slightly better than expected. But incomes edged up only 0.1 percent, significantly lower than the 0.4 percent gain that economists had expected. Consumer spending is closely watched because it accounts for 70 percent of total economic activity.

On the inflation side core price index (CPI) for personal consumption expenditures, which excludes volatile food and energy, rose 1.4% compared to January 2009. CPI is slightly decreased compared to December last year. It was 1.5% in December 2009. This means that prices are in check and inflation is not a big danger yet.

This is definitely not what all of the major retailers want to hear or what the government wants the citizens being told right now, but the truth is it would be wise for all consumers to keep spending in check during this holiday season. The economy does appear to be recovering, but as of right now the labor market is still in trouble and personal wages haven’t been growing at the pace they need to for the normal person to feel comfortable about their situation.

I’m certainly not saying you shouldn’t be buying any gifts this season or spending any money, rather I am simply saying that even though things look better than they did at this time last year I think it would be wise to act with a lot of restrain before spending too much of your hard earned money. Personal savings tips you learned during the recession and the ability to make your dollar go as far as possible shouldn’t be dropped just because things look a little brighter right now.

The retailers and the government obviously and understandably want people to go out and spend money in large amounts to kick start the economy, but as a consumer you must look out for yourself first and remember not to try to do more than is wise for your budget planning. 

Use things such as special promotional sales, coupons, buying in bulk to try to make your money get farther all throughout the year. The holiday season is a time where extra expenses are inevitable, but limiting those expenses and not stretching yourself and your family too thin during that time is absolutely vital to your overall well-being. Have a great holiday season and enjoy all of the festivities, but don’t forget about your personal savings and the status of your budget or you’ll end up with a holiday “hangover” of sorts.