Avoid Holiday Shopping Debt Creation. Debt Free Giving!
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The holiday season is now officially here. The government, economists, brick and mortar, and online stores are hoping you will spend and spend and spend – and they are creating advertising and incentives to loosen your wallet.
A lot of debt is created as people shop during this season. Consumer spending for them is a key financial indicator that the economy is bouncing back. Every dollar you spend means someone’s paycheck and bills can be paid; but lean, or low spending over the biggest spending spree of the year spells doom on the political and economic front.
If Debt Free Wealth is your goal, then holiday gift giving will need to be done carefully, with an action plan and a budget. Let us explore some ways to enjoy the season and move into 2012 without additional debt, guilt, and stress.
The very first thing that must be examined, in my opinion is, your motive for giving. The way you think, influences the way you feel. The way you feel, influences the way you behave. The way you behave, reinforces the way you think. So, to change the way you behave, ultimately, you need to change the way you think. So, what is your motive for giving any gift – but particularly, Christmas gifts?
Some common motives for giving are:
* To impress
The biggest debt creation in gift giving comes from the motive to impress. Maybe you want to impress someone you love, or your boss, or your in-laws; but spending to impress is probably the one thing that creates diarrhea of the dollars. The driving thought is to create a certain impression – usually one that is other than the truth. To impress on how generous you are, how rich you are, or how amazing you are; will remove all barriers to your natural spending limits. If this is the reason for your gifting, be careful. Check your motive at the door and re-think this. If you need to spend to prove something that is not otherwise obvious or truthful, then spending for this reason will later lead to bigger problems when you incorrectly set a precedent for future giving, for being something you are not, and maintaining this lie.
Giving out of obligation is probably the most psychologically difficult reason to give. Any gift purchased from a motive of obligation is rarely given with joy, in fact, it is most likely given with resentment. Nothing about the process of buying the obligatory gift indicates any concern for anything other than meeting the obligation. These are the gifts most likely to be re gifted later. If you are obligated to give a gift and you intend to live up to that obligation, try to at least do so without embarrassing yourself by giving a rude, or blatantly inappropriate gift.
Competing in the gifting arena tends to loosen the spending reigns, but unlike spending to impress, this motive will only trigger enough to outspend the competitor, and not much beyond that. This outdoing the Jones’ mentality is also dangerous for debt free giving. Budgets are totally ignored when spending to compete. If this is your motive for giving, be careful. Check your motive at the door and re-think this. If you really cannot give up the need to compete for someone’s attention or appreciation, then rather than win that competition with debt billed dollars. Spend a little more time investigating the true desires of the recipient. You may find that the winning gift is not won by the amount of dollars spent, but by the ‘perfectness’ of the gift, which may just be within your budget.
Expectations are tricky motives for giving. The trick is – whose expectations are you living / giving up to? You may be surprised to find that the expectation you assume someone has is absolutely wrong, if you were willing to talk to them about it. For example: Assuming your wife expects an expensive trinket, then you go shopping based on price tag. If you shared your desire for a debt free holiday and actually talked to her about it, you might find, that she would prefer some alone time with you on a private, ‘focused on her’ date. At the same time, you may assume your secretary does not expect a gift from you, and she is devastated that you did nothing to show appreciation for her work that year. Now, if the expectations you are living up to are the ones you place on yourself, then, regardless of what others think, at the end of the day – you will have less challenges living up to your own expectations. If you are gifting based on an assumed expectation, be careful. Check your motive at the door and re-think this. Chances are, if you at least chat with a close friend of the person, you will be one step closer to knowing what the real expectations are, and address that head on. For example, you might be able to approach your secretary ahead of time and say, “Hey, I know you are expecting a gift this year, and I would love to be able to give it, – but based on company profits or budget, this will not be possible this year.” By acknowledging the expectation, regardless of her feelings on the matter, the expectation is addressed and that is much better than an expectation that is ignored. When it comes to loved ones, dealing with expectations is especially important. Prior to the holidays, lovingly share with your family that this year you want to have a debt-free holiday, and get them on board to helping you come up with ideas to give within the budget this year.
Guilt giving also tends to loosen the purse strings. This is an expenditure that could have you ignoring your budget – in an attempt to massage your guilt away. Unfortunately, guilt based gifts rarely relieves the feeling of guilt – however, there is no question – it might pave the way to reconciliation. If guilt is the motive for gifting, be careful. Check your motive at the door and re-think the gift. A gift to someone you have hurt will be more appreciated – regardless of the price tag on the gift – if it is delivered with genuine remorse for the pain caused, and with a display of an intention to restore and reconcile. Even if the gift is not accepted or welcomed at the time, the gesture of giving can plant seeds of forgiveness that may – eventually, work in your favor.
2 Corinthians 9:7 “You must each decide in your heart how much to give. And don’t give reluctantly or in response to pressure. “For God loves a person who gives cheerfully.”
This verse captures the essence of this discussion in a nutshell.
“You must each decide“, giving should be intentional, not accidental or involuntarily. Gifts given on your behalf that you did not know about, or approve – is really no gift from you at all.
“how much to give“. Giving should be within a specified budget.
“don’t give reluctantly“. Generous or Remorseful giving are both from the heart, but only generous or joyful giving is pleasurable. Even if you never say a word, the feeling with which you give magically transfers with the gift. Proverbs 23:6-8 says
“Do not eat the food of a stingy man,
do not crave his delicacies;
for he is the kind of man
who is always thinking about the cost.
“Eat and drink,” he says to you,
but his heart is not with you.
You will vomit up the little you have eaten
and will have wasted your compliments.”
Somehow, the giver will sense if you gave the gift reluctantly or joyfully. Non-verbal communication speaks more volumes, and is more credible than words.
“or in response to pressure.” Giving under pressure pretty much covers the motives of giving to impress, giving from obligation, giving to compete, to meet unspoken expectations, or giving from guilt as we discussed earlier. Giving in response to pressure – externally or internally placed pressure – will cause you to go through this holiday incurring unnecessary debt.
“For God loves a person who gives cheerfully.” Well, does this even matter to you? Does it matter to you that giving a gift without heartfelt joy – does not please God? For me, this alone is a good reason to only give gifts that create cheer in me. When we give gifts the right way, we get joy in return. When we give gifts the wrong way, we get remorse, or regret in return.
For many, January 2 of the new year does not mark the start of a hopeful year, but a year started on a depressive note as the after-party reality sneaks in and the bills start arriving.
As I did my research to prepare this for you, I was disappointed that there was little information out there in cyberspace, or in magazines about how to truly avoid holiday shopping debt creation and enjoy debt free giving. I found lots of information about gifts for under $50 – while nice, it was still encouraging you to spend the $50 without thinking. I found lots of promotions for affordable shopping – great, a good thing as long as you remember that even if the gift costs $1, 1000 $1 gifts will cost you $1000 and if that pushes you even $1 over your budget, then you have not avoided creating debt for yourself.
So, now that you have been reminded to check your motive for spending; and been made aware of how those motivations may trigger over budget holiday spending – let us look at some ways to enjoy debt free giving.
The first thing is to re-frame the holiday and focus on the reason for the season. Christians should not feed their children a Santa diet. Nothing is wrong with harmless Santa – but if Christian kids think Christmas is about Santa – then fix this right away. If you re-frame this holiday to focus on the Christmas story, then it is easier to move your family into a debt free giving. Remember, 2 Corinthians 9:7 “You must each decide in your heart how much to give. And don’t give reluctantly or in response to pressure. “For God loves a person who gives cheerfully.” This whole holiday embraces the fact that God Loves. That is why He sent His only son, and the season celebrates the birth of Jesus.
The second and most obvious way to avoid debt creation is to spend within the budget of your disposable income. Those of you comfortable with budgeting have probably built gift giving into your monthly budget and already have your holiday spending money set aside for debt free spending. Good for you. Nevertheless, if you do not take your spending motives into consideration – you could still end up with remorseful giving, even as you spend within your budget.
For the rest of you, do this first and necessary step – create your budget. If you spending is going to come from credit card funds – then still set a budget to avoid mindless swiping, and new year depression. Of course, credit card debt creation for holiday spending will not get you toward a goal of debt free wealth, but – regardless of my rantings, I know some of you will only have holiday money if you use your credit card. So, if that is you – I implore you to create a budget that you use debt free wealth building strategies to quickly eliminate that new debt in the new year. That way, rather than regret, you are guilt free because of your decisive move to spend only what you know you can easily, and quickly repay.
If this is the only time you are likely give to particular person on your list – when it comes to children, I recommend you give gifts that meets a need first, then if your budget allows, also give a gift that meets a want. This feels hypocritical for me to tell you because I remember when I was a child, some adults would give me clothes because it was a safe gift that met a need for having pretty varieties when I dressed up. However, these gifts did not my feed my childish wants nor expectations. Nevertheless, children do not tend to care about how much it cost you to give them a gift, and children do not focus on their needs unless it is overwhelmingly ignored. Children who have been fed a Santa diet – will prefer gifts that meet a want, so, contrary to my advice – if you need to hear joyful squeals of appreciation for that awesome toy or gadget – give the gift they want during the holiday and if you can, give the gift they need later.
There is always the tried and true strategy of the Secret Santa, however, Secret Santa tends to feed into that obligatory gifting, even if it helps you stay within budget. I am going to share with you my family’s traditional spin on our version of the Secret Santa that is more meaningful. So here is the Beerman’s Secret Santa Strategy: At some point in the year (usually over Thanksgiving dinner) we pull a single name from the ‘hat’ of a member of the family that will be at the Christmas gathering later in the year. There is no limit placed on the gift except the limit of our personal budget – and that is understood by all. When we get together for Christmas, there is no embarrassing moment because someone did not get a gift. Everybody will have a gift under the tree, but only one. Each of us can spend more generously on that gift since we are only buying for one family member rather than dividing our budget to bring a gift for all. For the younger children, their name goes in two or three times to the ‘hat’ so the children get more gifts each. Now this is the tradition for the big family get together, privately at home, the children may get more gifts from their parents.
Another cool idea I found was themed giving: For example, if the theme was Asia, then we would include the fun of learning about the place and culture and give a giftwithin the theme.
Do-it-yourself is always a money saving option, but if you have not already started, time may not be your friend. One year, knowing my grandmother collected sunflower items, I hand painted sunflowers on several throw pillows for her couch.
Give a gift that builds on existing assets: For example, if the family has a Wii, buy Wii games or kits eg. for the fitness enthusiast, get the Wii fit kit, etc.
Give Gold and Silver assets. Imagine for a moment the WOW impact of receiving a a shiny, beautiful American Eagle gold or silver coin? “Silver is relatively inexpensive now, but it should be treated as if it is not,” (Jake Robbins} because silver – even more than gold- offers the greatest possibility for growth on investment. A Nikon 1 J1 10MP Digital Camera with Interchangeable sells online for $649.99. This will lose value the moment it leaves the store, and could break. For $634 price you could gift a special edition gold eagle coin or for $639.80 you could have 4, 1oz silver eagle coins.
Create a personalized gift. I did this one year and it was probably the highlight of all the gifts my mother-in-law received that year, and it cost me $13 to produce. My mother-in-law has Afgan show dogs that have won multiple awards. I took photos from various dog shows and created a custom flip calendar printed and bound at my local FedEx Kinkos store. Another year I ordered a blanket with a picture of her favorite dog stitched in. Till this day, that throw is proudly displayed in her living room.
Give Food gifts. Who hasn’t received a home-made fruit cake or cookie tray at some time in their life. This is very easy and affordable even if you do not know how, or want to prepare anything. For example, my budget corporate gift for certain vendors and clients of my non-profit money education organization, Debt Free Wealth will receive a customized coffee mug with our logo, an affordable project courtesy of Vistaprint, stuffed with candy in million dollar bill wrappers, and Goldmine brand gum packaged to resemble a bag of gold nuggets. One participant of this radio program or blog can click our CONTACT button with their email address and in the comment tell us you want to be in the drawing for the coffe mug prize. We will announce our winner in our show on the 2nd Friday in December 2011. If you wish to have a Debt Free Wealth mug, as a constant reminder with every cup of coffee that you should continue to work toward creating your own Debt Free Wealth, these are available on our website for $15.
There are many other great ideas for having a debt free Christmas and if you make comment to this blog only those containing good tips will be posted.
Let us give thoughtful, purposeful, debt free gifts this year. Join the Crusade! Decide to avoid creating holiday debt this year. Enjoy debt free giving so you can start the new year well on your way to Debt Free Wealth!
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