10 Ways to Save Money This Christmas

Since we’re in an economic recession, it might be nice to look at some ways to save money this Christmas. We can all still have a very meaningful Christmas season and show love to our friends and families without having to slaughter our own personal finances. Here are ten ideas:

1. The Christmas Card Trick – Take Christmas cards from last year, neatly cut off the half with writing on it. Now you have a fresh new Christmas card.
2. Shop Online – This saves gas and (sometimes) time. Unfortunately, you could find yourself surfing the web for as long as it would take you to go out and buy it at the store. But you can find the best deals on products using web features like “Google Shopping.” That saves the time of going from one store to another during the busy traffic season.
3. Bonus Points – Do you get bonus rewards for your credit/debit cards or sky miles from your airlines? Use some or all of those bonus points towards getting gifts for others this Christmas.
4. Thrift Stores – This is where some of us need to swallow our pride. I just went to four thrift stores here in Richmond, Virginia last week in search for a few small items (computer speakers, a shirt, etc.). While perusing one of the stores, I noticed that they had just received a donation of what appeared to be boxloads of brand new, unopened children’s toys. Perhaps Target got a damaged pallet and just brought the whole thing to the thrift store, even though most of the products inside were just fine. It can be like searching for gold at some of these stores, but the gold is there – even new stuff.
5. Ask Your Family and Friends for Wish Lists – This might be another issue of pride – as you do not want to give the impression that you “don’t know” your friends and family well enough if you have to ask for a list. Some people are good at knowing the perfect gift without asking, but I’m not. My wife and I exchange lists so that each one of us has some idea as to what would be worth while to purchase. If you try to guess what someone wants and then you’re wrong – then that money is pretty much wasted (unless you consider that “it’s the thought that counts”). Make your money go further by getting people what they really want and need.
6. Try to Avoid Gift Cards – This is not a universal law, but a general suggestion. Gift cards can be good sometimes, but for the most part, they are not the best “bang for the buck.” I heard that there is about a 20% profit for businesses when they sell gift cards. Now that does not make sense, but it is true. Companies love to sell gift cards because they know that not all the money will be spent. For every $100 in gift cards a company sells, only $80 will be redeemed. That’s because people forget to use their cards or they use part but not all the card in a purchase. Then the remaining $1.83 goes unspent and expires at some point in time. Furthermore, you could buy a gift card for someone and then the company goes belly up in two months. All of a sudden, the gift card is no longer good because the company went bankrupt or out of business. And it’s not just small companies that go bankrupt, as we all know too well.
7. The “Priceless” Gifts – A few years ago, my wife and I sang a song for her uncle as a Christmas gift to him. He loves the song “O Holy Night.” We printed the lyrics with a nice font and framed the lyrics, which did not cost us much. Then we gave him the framed lyrics and sat at his piano and sang it to him. There are TONS of things we can do for other people that require little or no money. You can write a song, a poem, or a short story. Get some low-cost materials and make sometime (like a craft or woodwork or a painting). You can offer a coupon redeemable for services rendered or simply for time spent together. You could cook a meal or dessert for someone. Use your skills, talents, and hobbies to give people those unique gifts that they will never forget.
8. Give Money, Time, or Skills to a Charity – This might seem counterintuitive. But this is what Christmas is all about – selfless gfits. Just the act of giving without any hope of getting anything in return will put us in the right attitude during Christmastime. When we are in the right attitude of giving, then somehow we do not succumb to the pressure to SPEND, SPEND, SPEND at all the retail stores. Compassion is the opposite of consumerism. Furthermore, God has a way of rewarding cheerful givers (in whichever way He so chooses).
9. Do Not Spend More Money Than You Have in Your Bank Account – This might sound like simple math, but this is why our country is in so much turmoil right now – because of debt-based spending. Putting that DVD player for Uncle Bob on credit and then paying interest on it until late 2009 is NOT a good use of money. Save yourself the interest payments by only buying Christmas presents with “cash on hand.”
10. Potluck Christmas Parties – You do not have to host a Christmas party and spend tons of money on food for people to enjoy themselves. People come for the friends and family, not the food (well…I come for all three, but that is beside the point). If you put on a big production Christmas party, save some money by toning down the caviar and shrimp. Either simplify the menu or have a potluck. Or you could have people bring ingredients and then you all bake and cook together.

I hope these ten things help. For a website the combines numbers 7 and 8 in the list above, check out www.adventconspiracy.org

How to Avoid the Economy’s Mess

My wife and I sometimes listen to a podcast by a guy named Dave Ramsey. He teaches sound financial advice – things like not going into debt, living on a budget, and working hard for a living. Recently, his radio show has been bombarded with e-mails about the trouble in the economy. Since Sarah and I do not have a TV, we were made aware through this podcast (and news found on the internet) that there is trouble on Wall Street. Apparently, the television news media does a Hollywood job at dramatizing the problems (and real problems they are) as apocalyptic nightmares. Sarah and I keep working, saving, and spending money on things we can afford (things we have never really done well until this year – after listening to Dave Ramsey’s shows and reading his books). As a result, the volatility of Wall Street and the economy at large does not affect us very much. What bliss! Furthermore, we are considering starting our Roth IRA’s and pumping money into a Mutual Fund for saving for a house. What better time to start investing than when the Stock Market is DOWN! As Ramsey says, the stock market is ON SALE. It has nowhere to go but up over the long-haul, as every ten-year period since like the 20’s has shown a profit.

So please calm down. The economic world is not collapsing over our heads, despite what ratings-hungry talking heads say. Go out and enjoy the wonderful autumn air.

Book Review: Financial Peace, Revisited

I just finished Financial Peace, Revisited by Dave Ramsey with thoughts by Sharon Ramsey (Viking, 2003). I blasted through this book, both because of its readability and since the subject matter is very practical. I have been listening to this guy’s podcasts recently and his conservative Puritan view towards money (hard work ethic, no borrowing, giving/tithing, saving) resonates with what I feel is the right way to view finances. He has quite the following on his radio show and in his live events. He has also taken the American church by storm, offering his “Financial Peace University” curriculum at a church or school near you.

In his book, Dave shares how he lost BIG in real estate in his twenties – nearing bankruptcy, only to gain it all back again using the money principles about which he now teaches. Has what he calls the “Baby Steps” to financial freedom – starting with things like saving up an emergency fund and getting out of consumer debt. Then he encourages people to save for retirement and college – and then pay off the house. He teaches that ideally, nobody should take out a mortgage but should buy a house with cash. But if people area already in a mortgage, then they should “get mad” until it is completely paid off. We work harder at something, he says, if we get mad and let our emotional desire for peace and security kick in. Once the house is paid off, then they can live prosperously and philanthropically. None of this comes overnight. Financial peace is the result of hard work at our jobs and disciplined saving over the long-haul. It also means that we as consumers must curb our selfish desires to “have it all” and “have it now.” We must live well beneath our means and use the excess income to save and give.

I love this kind of teaching because it is the opposite of the “get rich quick” myths out there. We have all seen those infomercials and seen the ads: “Earn ten times the income for one-fourth of the work!” Maybe some people have achieved that. But most people cannot – because that is not reality. Work hard, give, save, spend. And make sure every penny – and no more – is allocated to one of those three categories (giving, saving, spending).

I recommend this book. We all need to deal with money in this world. This book helps up to better deal with it so that we are no longer enslaved by the money, but rather we have control over it.

The Money Envelope System

My wife and I have heard about budgeting money using cash in envelopes that separate different categories of spending, but I guess we never though it was “for us.” The more I thought about it, I figured that if it saves money in the end, why not do it? So I went to the bank and got out some cash for three main categories of spending (plus one for “other”) that are categories that are not “fixed” each month. These three are groceries, dining out, and gas. These three categories usually end up fluctuating each month because my wife and I have no budgeted goal for keeping those expenses down. With these envelopes, we know we can only spend “x” amount of dollars at the grocery store this month. Whatever is leftover we can put into savings and then start all over again next month.

If you think about this, it will save money and give more freedom. We will save money because we won’t just impulse buy – we actually have to think about our purchases before we put them in the grocery basket. It also produces more freedom (ironically) because we know we can go out to eat and spend money from our “dining” envelope at some nice restaurant at the end of the month because we held back from dining fancy at the beginning of the month. We often go out to eat and feel somewhat guilty that we are spending money frivolously. But now that we have a budget, we can feel the freedom of spending what we budgeted.

The reason why many people have financial wealth in this world is because of a simple principle called “delayed gratification.” They shop at JC Penny and maybe even Thrift Stores. The other reason they are wealthy is because they spend less than they earn. And that is a principle that can apply to anyone of any income level.