Seasonal Gifts Inspire Year-Round Saving

By Michelle Singletary
Thursday, December 8, 2005

A new poll from the Center for a New American Dream, a nonprofit group on a mission to protect the environment by curbing conspicuous consumption, found that people are financially tired this holiday season. Even though gasoline prices have been coming down, consumers feel whipped from the months of paying high prices at the pump. They know their heating bills will be higher this winter season. And they are tired of paying on credit card bills that never seem to go down.

To combat the financial fatigue, people who responded to the poll said they wanted to give gifts that encouraged saving rather than spending. More than three out of five respondents (62 percent) said they were either planning to give or considering giving family members gifts such as a savings bond or a piggy bank this year.

I would like to believe the poll. It's not that I doubt the group's veracity. I just know people. They often say one thing and do another.

I would like to think that on Black Friday, the official start of the Christmas shopping season, those hundreds of shoppers across the country who got up before dawn to stand in the cold had indeed climbed out of their warm beds to beat the rush on piggy banks or wanted to be the first in line to purchase a savings bond when their bank opened.

But you and I both know this didn't happen. People were shoving and walking over one another to buy the new Microsoft Xbox 360. They were crowding stores, buying more stuff that nobody really needs. They were frantic to buy their kids an iPod. (Mind you, I bet many of the parents buying all this stuff for Christmas don't have $300 saved in a college fund. Sorry, I don't want to be called a Grinch again.) Anyway, for the second year, here are my favorite financial gifts:

Want your kids to understand the value of a higher education or why they need insurance on a car or home? Then this holiday, get "The Game of Life." My husband and I play this board game with all three of our children, who are 10, 7 and 5. Yes, even the 5-year-old plays (usually she's my partner). My kids have learned so much about finances playing this game. I was never prouder than when my 10-year-old, Olivia, jumped up when she paid off her loans during one game. "See, Mommy, I don't have any more debt," she cheered, giving me a high five. This is a game worth letting your children spend hours playing and one that will teach them some life lessons that will actually be useful, as opposed to fighting some creature or hoodlum in an Xbox game.

Say "I love you" with a Treasury Department Series I bond. Okay, you may not get a bear hug for giving one of these. But years later when the bond matures or the person needs to cash it in, you'll get your due.

I like these bonds because they are a low-risk investment that also keeps pace with inflation. While you won't get spectacular returns, you do earn a guaranteed real rate of return. The earnings rate is a combination of a fixed interest rate plus the rate of inflation, adjusted semiannually. I bonds are currently paying 6.73 percent through April 2006.

Here's another plus for buying I bonds. Under the Treasury Department's Education Savings Bond Program, interest earned on the bonds can be completely or partially excluded from federal income tax when the bond owner pays qualified higher education expenses to an eligible institution or state tuition plan. To get the tax break, the transaction must occur in the same calendar year the bonds are redeemed.

Bonds are sold at face value. The minimum is $25 when purchased electronically via TreasuryDirect. You should note that an I bond has to be held for one year. If you redeem the bond before five years, you forfeit the three most recent months of interest. The bonds pay interest for 30 years.

You can buy I bonds directly from the government, at most financial institutions or through payroll deduction. Go to for more information.

Do you know someone who wants to be a big shot in the stock market but doesn't have any real money to invest? Then give the wannabe investor "Mr. Bigshot." This a game that allows you to play the stock market with $100,000 of virtual money. Your goal is to be the first to reach $1 million. For each round, the creators pick a year over the past 35, and you choose between two companies to invest in on Jan. 1 of the given year. You don't know the names of the real companies, just what they sell. The game charts your investment for the year, and each quarter you have to decide whether to hold or sell.

Before you buy the game, try the demo at . It's actually rather fun. This stock market game isn't too complicated and, in a basic way, simulates individual stock investing. The CD-ROM is $19.95. The board game costs $29.95 (this includes the CD-ROM version).

At least this year, if you're going to spend yourself silly, add to your mix of gifts something that has the potential to appreciate in value. Whether it's a piggy bank, bond or financial game, give something that will help someone save, invest or spend more wisely.

On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at

By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.


Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

© 2005 The Washington Post Company