The Advantage Advisor

Volume 4 / Issue 11/ 2009
This Issue:
Having a more meaningful holiday
Building or Rebuilding Credit
Giving Gift Cards

Have a more meaningful holiday

The holidays, no matter how you celebrate them, are supposed to be an enjoyable time filled with family, friends and happy days.

However, it seems like many adults view the holidays as a stressful time. Everyone runs from place to place trying to find the perfect gifts for family, trying to cook the perfect meal for gatherings and trying to create perfect memories.

Most of the time all the effort to create perfection and please others not only causes stress, but it also causes financial worry for many people.

Many of us have lost the joy of the season that we once had as children. You know, that time before you were responsible for buying gifts, cooking meals and driving across the country to visit family. As children all we had to do was enjoy and anticipate.

Consider making this year the year that your family recaptures the fun of the holidays. This doesn’t mean you can’t have gatherings or even exchange gifts. It just means rethinking how you go about doings these things.

First, talk to your family about what the holidays really mean. Ask each family member to describe his or her favorite holiday memory. There’s a good chance those memories will have nothing to do with gifts. Use that conversation to guide your holiday plans.

Sit down and make a list of everything you need to do and buy for the holidays, including a grocery shopping list, an errand list and any miscellaneous things that you need to squeeze in. Organization will help to reduce some of the stress.

Instead of making one person responsible for all of the cooking at your holiday dinner or party, ask everyone to pitch in and bring a dish. Be creative with the food you serve. There’s no law that says you have to have turkey or ham with all the fixings. You may be able to save money and create a delicious meal by preparing brunch or having your family’s favorite foods.

Focus on spending quality time with your family. At gatherings play board games or ask everyone to share funny stories from the past year of past holidays. Get to know one another better.

If you usually exchange gifts with friends, but are tight on cash, only exchange greeting cards. Challenge your friends to see who can find the funniest card or the most unusual holiday card.

Some families choose not to give gifts at all or to give one another homemade gifts. If this is not an option for your family, consider scaling back on the gift giving by:

• Buying gifts only for children in the family
• Drawing names so everyone only buys for one person. This could even be done in “Secret Santa” fashion where no one knows who has their name until the gifts are exchanged.
• Having a grab bag of gifts where everyone picks one wrapped gift.
• Giving a family gift that everyone can enjoy instead of giving a gift to each individual family member

The key is to be creative and focus on the people in our lives and not things. In the end, the holidays are what we make of them. We shouldn’t feel pressured to celebrate in a certain way, buy certain gifts, eat specific foods, or do anything that causes stress and financial hardship.

Dear Debt Monkey

Q: I’ve been thinking about giving mostly gift cards as holiday gifts this year. Are there any financial advantages or disadvantages to doing this?

A: The biggest financial advantage of the gift card lies with the giver. It is an easy way to guarantee that you do not overspend.

There could be financial disadvantages of giving gift cards.

Some cards have an expiration date. Find out if the card must be used by a certain date, and let the recipient know when you give the gift what that date is.

If you are giving a store-issued gift card, check to see if that store has recently filed for bankruptcy or is planning on going out of business.

You can buy bank-issued gift cards which can be used just about anywhere. In addition to checking for an expiration date, find out if there are any additional fees attached to the card. Banks may add a fee at the time of the purchase. However, some of these gift cards automatically begin deducting a monthly maintenance fee from the balance of the card.

It’s a good idea to check the bank’s or retailer’s web site for details before your purchase a gift card. It is also important to be aware that the banks can change the terms of the gift card without notice.

Tips

During the hectic shopping season, plan ahead so you don’t find yourself overwhelmed and rushed in the stores.

• Make a list of everyone you plan to buy a gift fore, ideas for each person and how much plan to spend.
• Keep your list, credit cards and cash in a secure, yet easily accessible, place so that you don’t have to dig through your purse in the checkout lines.
• If possible, try to shop during the day, mid-week. The stores will be less crowded and you’ll feel less stressed.
• Consider internet shopping from the comfort of home. Just make sure to budget for shipping fees and allow time for delivery.

Building or rebuilding credit

People who are trying to build a credit history, or people who are trying to rebuild their credit after a financial setback such as bankruptcy, may want to consider opening a secured credit card.

A secured credit card is a card on which you, the borrower, put down a deposit. Find out if your deposit will be equal to, less than or greater than your credit limit.

The card is used to make purchases, and you make monthly payments just as you would on a traditional credit card. The difference is that your lender has your deposit as a guarantee. This is what makes it a viable option for people with little or poor credit history.

You’ll want to ask the creditor if they accept people with no credit or bad credit. If you’ve filed for bankruptcy in the past, ask if you will qualify for the card.

There are also some things to consider if you are looking for a secured credit card. Make sure to find out about the basic terms of the card including the interest rate, if there is an annual fee, if there is a grace period and how much over-limit and late fees are. Also, find out what interest rate is paid on your deposit and how long you will have to leave money on deposit to earn that interest rate.

Ask if the creditor will report your payment history to the credit bureau. This is very important. You want a card that does report to the credit bureaus, otherwise the card will not count towards establishing or reestablishing credit. Also, find out how long it will take to become eligible for a traditional, unsecured credit card.

Advantage Facts

The day after Thanksgiving is not the biggest shopping day of the year. Holiday shopping patterns change over the years, but statistics show Dec. 18-23 are some of the most popular shopping days.
Source: Snopes

Since 2001, Americans have been cutting the amount they spend on Christmas. In 2001, the average American spent $1,052. The biggest cut came between 2007 and 2008 when consumers cut their spending in half from $859 to $431.
Source: American Research Group

A poll showed that 2 out of every 5 people found holiday shopping to be less pleasant in 2008 than in prior years.
Source: CreditCards.com

Reader Feedback

Do you have a frugal, creative way to celebrate the holidays? Share your holiday ideas with us at hmurray@advantageccs.org or by mail to Heather Murray, Advantage CCS, 2403 Sidney Street, Suite 400, Pittsburgh, PA 15203

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