This is the season of charging credit cards to the max as people begin the stressful winter olympic sport: holiday shopping.
It is a recipe for financial disaster that calls for:
1 part Advertising that assaults your senses (tv, radio, catalogs, newspapers, web)
2 parts Guilt (want to save face in front of others)
1 part Impulse shopping (I'll know the perfect gift when I see it)
2 parts Excessive Spending beyond what's reasonable to your budget
3 parts Remorse in January and February when the bills arrive
Here's how the cycle goes with many of us:
1. make a list of all the people you "must" buy gifts for...
2. list people to buy gifts for because you think they might buy you a gift (and that would be too awkward)
3. try to come up with gift ideas for each person on the list that won't break the bank.
4. when you can't come up with any ideas, head for the mall.
Once you find a parking place and get inside, you fall victim to all the impulse purchases that are more expensive than you planned. Since you don't have that kind of cash, you are lured by "save 10% when you get an in-store credit card" Cool, you think. I save money and get credit at the same time. Maybe I'll spend a little more while I'm getting such a good deal.
While all this consumer purchasing may be good for the economy, it will wreak havoc on your personal economy!
Did you know that your credit score drops EACH time you apply for that in-store credit? Why does that matter? Because the next time you shop for financing for a house or car or get insurance, the pricing will be driven by your credit score.
Then, there's the day of reckoning -- when the bills arrive in the mail. Do you have enough cash in the bank to pay those balances in FULL? If not, look at the high interest rates you'll be paying. Then, there are late fees, over limit fees, and any other junk fees the finance companies can legally tack on.
Quick -- Here is a bit of perspective:
Right now, name each gift you received last year, who gave it to you, where it is right now, and how important that item is in your life.
Let's not forget there is a war going on and millions of people around the world live in fear of violence.
Here are some Unique Gift Alternatives for 2007:
Around Thanksgiving, send a nice card to people you think you need to purchase a gift for and let them know that instead of giving gifts to friends this year, you've:
a. made a donation to a favorite local charity in honor of your family and friends
b. provided items to go to our troops who are serving overseas so they can have some holiday cheer from back home
c. adopted a local family or children in need for the holidays and are providing them with gifts for a merry Christmas and happy new year
d. paid down/off your credit cards/student loans/car note so that the new year can start off on the right financial foot
You'd be surprised how many sighs of relief you will create by this simple action.
They will also no longer feel obligated and can focus on the true spirit of the season -- love, renewal, family, and community.
Give it a try and let me know how it works!
Peace to you and yours.