And they are: cheer, credit cards, and cost! If you match them well enough, your holiday should be great! If not, read on…
The timer at the top of my blog edges ever closer to December 25th, and with it the sense that Christmas shopping, a moment dreaded by almost every man I know, should begin! Yet this year, there are a lot of pressures on our wallets, perhaps more so than in many previous Christmases over the last ten years or so: inflation is ticking up, gasoline (and all energy prices) are rising, food prices are spiralling upwards, interest rates are rising, and many homeowners now face an ARM reset in early 2008.
It’s my Christmas, and I’ll swipe if I want to
Given the increasing pressure on our regular spending, it’s very tempting to let our flexible friends bear the weight of the extra expense of Christmas, so that we can at least enjoy a ‘happy’ and ‘free’ Christmas… But InvestorBlogger is challenging you: How can your Christmas be ‘happy’ and ‘free’ when you know that come January, the charges will start appearing on your credit cards‘ statements as early as the end of the first week of January?
- Will you feel happy knowing that you have to pay more than 15% pa interest on goods, foods, and services that have long been consumed (and even forgotten!)?
- Will you feel free when you find that your paycheck has to be handed over to the bank to cover the minimum payments on ALL your credit cards, and it’s going to be months before the principal is paid off?
Well, I’m proposing that you can take five concrete steps towards acting before it’s too late. If you follow these, you will find it much easier to alleviate the January pressure, lighten the Christmas shopping burden, and improve your Christmas cheer!
1. Limit your purchases
Many parents, family members and friends do go overboard on purchasing presents. Of course, this is just not necessary. So if you find that you are buying lots of presents because you’re not sure what that person wants, then don’t. Have a good think about what that person is like and means to you, then purchase one or two presents at the very most that are of good quality, that exemplify your relationship, and that mean something.
One of the best presents I ever got from my parents was a simple ‘made in Taiwan’ plastic chess set (the pieces were large and easy to handle for a kid!), even though the chess set is long gone, the gift started me on a long journey to play Chess at school, and with friends. From there I learned a lot more wonderful board games, including backgammon, draughts, etc.. That simple plastic set was a much more valuable present to me than all of the fancy Evel Knievels, Action Men, and Meccano Sets that I received in all my years as a kid. One simple game, decades of satisfaction.
2. Limit your spending
Set large budgets for your shopping, and allow a little legroom so that you can overshoot your budget with out feeling bad. Typically when I’m shopping for a big ticket item, I’ll budget a base amount +/- 20%. In other words, if I want to buy a new TV, I’ll budget say $400 +/-$80. I’ll try to get the best TV I can around the $400 mark, but I won’t limit that to just $400, so if I see something that is quantifiably better for a little extra money, I won’t feel bad about it! I can buy. The important thing for me is the freedom to buy something better, but I feel secure enough knowing that there is a ‘hard’ limit to my spending as well as a soft limit.
3. Simplicity vs. Abundance
We all live in a world of things, too many things. We’re given things on many occasions, we spend too much time and money shopping, we’re even buying on the Internet now. Yet in this world of abundance, we’re often short of simplicity: simplicity in our relationships, simplicity in our lives and simplicity in our health.
Every box of cereal comes with 200 vitamins, every mobile phone can do 100 things, … What happened to a simple gift made to do one thing and do it well? So, if you are shopping, choose carefully, choose meditatively, choose simply.
4. Focus on the people, not the things!
In the US, Christmas is a time of celebration, a time of rejoicing. It isn’t an accident that it is preceded by Thanksgiving. If you are faced with a choice of buying a lot of things on credit cards or owning up to not feeling good about spending too much money on credit cards, tell people that you are just not able to spend that kind of money…! Instead, enjoy Christmas for what it should really be about…! Tell people that you’re going to enjoy Christmas because it’s a real chance to connect to people you care about…! If you find buying an abundance of things tough on your pocketbook, then look to making things for them, things that they will appreciate because you made them especiallly for them: your own calendars, postcards, T-shirts, plants, books… the list is quite endless. While the kids may want an X-Box, most adults really don’t.
5. Making the most of your ACTUAL spending
There are so many ways that you can utilize credit cards these to cut your expenses that it would, of course, be foolish to not use them. So, if you do use your credit cards, make sure that you get as much back as possible: typical benefits can include cash back on purchases from cash back credit cards, bonus points or airmiles, parking discounts, 0% interest periods, grace periods, balance transfers, store discounts, rebate points, etc. If you are applying for new credit cards before Christmas, or you have a bundle in your wallet already, you may want to compare credit cards carefully to get the best benefits! But remember, using a credit card to save money only really works if you were going to buy the item in the first place!
Whatever your shopping plans are this Christmas, I hope that all my readers have a happy holiday and that we welcome in a prosperous new year!