There are just nine shopping days left until the big day -- Christmas. Do you still have gifts to buy? Have you already busted your budget? Did you use your credit cards so much that the magnetic strips are damaged?
If you answered "yes" to just one of those questions, it's still not too late to get a grip. In fact, in my column last Sunday I offered some tips for anyone who's suffering from what I like to call "holiday shopping madness syndrome."
Here's one of the ideas I offered: "When it comes to children, try this tactic to keep from losing your grip. Tell your children you won't get anything for them at Christmas that they saw on a television commercial (if you've already succumbed to their pleas, impose this rule next year). I tell you, this rule has been liberating for me. No more panic attacks about not getting the latest, hottest advertised toy. Effectively, this rule means you end up buying your children things they will play with for a long while or items that reflect what they actually like to do."
Check out the full column: "Christmastime Consumerism" (Dec. 12)
There was one point I didn't get to expand upon in print as much as I wanted -- the pressure we all feel about buying the right gift.
Although we say it's the thought that counts, we often don't really mean that. What we mean is, "You better put a lot of thought into buying me the right gift or I might act like a spoiled brat and sulk."
I don't think many people really understand the concept of a gift. Too many people believe that the mere act of purchasing material goods is evidence of love or appreciation. In other words, it's the gift that counts, not the love behind the gesture.
But it doesn't have to be that way. Three years ago, I wrote a column stressing that there's nothing wrong with being prudent with your holiday shopping. The bottom line, I wrote: "This is, after all, the season for joyful giving. But be honest about how generous you can be. Get rid of the angst and guilt and you may actually have a happy holiday without going broke." Read the full column: "If You're Trying to Stay on a Budget, Feel Good About Giving Thrifty Gifts" (Nov. 29, 2001).
This holiday, be gracious. Be grateful for whatever you get.
"The Shopping Momentum Problem"
So why do we lose our minds this time of year? If you missed it, check out Kathy Lally's article from Sunday's Post, which explored new research into why we often buy more than we want or can afford.
Even I, the "Frugal Fannie" of my family, have trouble curtailing my spending when I shop. According to this research, it's not entirely my -- or your -- fault. We're often victims of the "shopping momentum effect." Two university researchers found that once a consumer makes the leap from browsing a store or Web site to actually buying, he or she has crossed a threshold that makes further purchases easier to rationalize.
So how do you avoid "shopping momentum." The researchers offer some advice, but you'll have to read the article to get it: "First Law of Shopping: Carts in Motion Stay in Motion."
Got a Clunker of a Car? Donate It Now
If you're thinking about donating your car to a charity, you may want to do it before Jan. 1. The tax benefit for car donations won't be as generous in 2005.
Under the rules in effect for the remainder of this year, taxpayers can deduct the fair market value of a donated car. But next year, if the claimed value of the donated vehicle exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale. See Jacqueline L. Salmon's article from Tuesday's Post, "Vehicle Donors Hit the Gas Pedal."
Before you rush out to donate your used car, keep this in mind: "Just because the rules will be tightened for vehicles donated next year doesn't mean anyone should give a car to charity and claim an inflated value this year," said IRS Commissioner Mark W. Everson in a recent news release.
To protect yourself from IRS auditors, follow the tips outlined a few years ago by The Post's Albert B. Crewshaw -- "Back Up Your Car Claims" (Dec. 24, 2000). And for more information on car donations, check out IRS Publication 4303, as well as this page on the IRS Web site.
Eliminating Debt, $10 a Day
Jean Chatzky, author of "Pay It Down" (this month's Color of Money Book Club pick) joined me yesterday for a Web chat on washingtonpost.com. Here's one of the interesting reader questions:
Rockville, Md.: Hi Michelle and Jean, I have a somewhat minor issue dealing with money and I'm hoping you have some words of wisdom. My fiance and I are hardworking and both earn ok, if somewhat low, salaries for this area. We have no debt (paid off all student loans and
cars...woohoo!!) and are pretty much proud of ourselves and our lives.
But recently, I've found myself getting frustrated and upset at all of our friends who are able to easily buy houses, cars, etc. because their parents give them thousands of dollars for down payments. ... It's frustrating because while we wouldn't change our own lives, these people can't seem to understand why we can't afford what they can.
Please tell me we aren't the only ones that have ever felt this way. Any advice! Thank you so much!
Michelle Singletary: You are definitely not the only ones to ever feel
"envy" of what others have or are given. And let me just say this, you have no idea what financial state your friends are really in -- even with the money they are being given. They could still be in debt up to their eyeballs. They could be overextending themselves and not happy at all. So stop looking at the grass in others' yards. Sounds to me like your grass is in pretty good shape. Stop talking to your friends about what you can't afford and instead focus on what you have and your financial goals.
What do you think, Jean?
Jean Chatzky: I completely agree. And I guarantee your friends are looking
at you with the same amount of envy wondering why you don't walk around with the stress of the world on your shoulders. We'd all be so much better off if we could figure out what WE wanted for OURSELVES in this world an then focus on that rather than what the neighbors have.
Read the full Web chat transcript here.
Robert Reich Web Chat -- Jan. 5
Just a reminder that my next Web chat will be on Wednesday, Jan. 5, when my guest will be former labor secretary Robert Reich. In my Nov. 28 column, I wrote about Reich's idea for restructuring the U.S. student loan system. If you missed the column, I noted how Reich envisions "a student loan program in which people who borrow to attend graduate school would then pay back a small percentage of their annual salary over a 10- or 15-year period? Everyone would pay the same percentage regardless of income. All the money would go into a general student loan fund and then be lent to others for graduate school. Private lenders could provide the loans, which would be guaranteed by the federal government."
Robert Reich (The Post)
Reich will be online with me on Wednesday, Jan. 5, at 1 p.m. ET to talk about his proposal. Submit a question or comment.
Paragons of Parsimony
I love the ingenuity of people at this time of year. Here are some tips from one reader that are definitely worth trying if you're still shopping for the holidays:
"A couple of years ago my husband made a purchase during the Christmas shopping season," wrote Cecilia Kuhn. "When I inquired where the funds had come from, he revealed that he had used a leftover gift card. Since money was really tight that year, it gave us the idea to look around the house for other gift cards with leftover amounts, [as well as] change which could be rolled, small gifts never previously given or suitable for re-gifting. It was surprising how much it added up to and we congratulated ourselves on our creativity."
I congratulate you, too.
And speaking of gift cards, check out my Dec. 9 column, "This Year, Gift Cards Charge to the Top of Holiday Lists."
Money Mantras Update
A reader comment from yesterday's Web chat with Jean Chatzky reminds us all that it's possible to make it through the holidays without spending much at all.
Kalispell, Mont.: Hello! I'm 15 days into not using my credit cards at all, following the advice in Michelle's book "7 Money Mantras." Do you believe I'm doing this in December and January of all months? But it is absolutely liberating to not spend money. Several times in the past two weeks I've wanted to buy something, but couldn't because my credit cards are in a sealed envelope. ... The most exciting thing is that next month I'll receive a credit card bill with a zero balance due for the first time since I can remember. Thank you, Michelle!
Michelle Singletary: Thank you. I'm so happy my book has been such a help to you.
And what a testimony. See, folks, it can be done. And just so you know, the paperback of my book comes out in two weeks. The title has changed. The new title is "Spend Well, Live Rich." (The Washington Post ran an excerpt of the book last year.)
But whether you buy my book or Jean's, if you're deep in debt, make a promise to yourself to start the new year off unloading that burden. As this person testifies, it's a great feeling the day your credit card statement arrives and it shows a zero balance.
Do you have more ideas for staying within your budget during the holiday season and into the new year? Send them my way; include your name and home town.
You are welcome to e-mail comments and questions to email@example.com. They may be used in a future column or newsletter with the writer's name unless otherwise requested.