How to "X-out" X-pensive Xmas Gifts

As seen in the Etownian.

Because of the commercialization of Christmas, department and discount stores have been seemingly displaying their holiday decorations and hot-ticket toys earlier every year. Toys and other anticipated popular gifts are often given high price tags which are reduced almost immediately following the holiday season. Due to the economic downturn in recent months, retailers are growing understandably uneasy about the coming holiday season – which some researchers predict will be the least lucrative for retailers since 1991. They are trying to counteract this by placing holiday items on the shelves even earlier than normal, a trend which has been ongoing for several years but is exacerbated during economic downturns such as the current one.

The great majority of retailers’ sales are seen during the period from the day after Thanksgiving (“Black Friday”) through the middle of January. Due to investment difficulties and job strife, many consumers have been forced to cut back on holiday spending and consequently are expected to frequent discount big-box retailers such as Wal-Mart and Costco this year. Traditional department stores, long the domain of holiday shopping, have been suffering in recent years due to a trend toward wholesale buying. Due to the fact that these goods are purchased in bulk directly from the manufacturer rather than through a wholesaler less expensively, they can be sold for lower prices, although some question the quality of such apparel and appliances.

Following Christmas Day, retailers begin offering clearances on the seasonal high-ticket toys, Christmas decorations, clothing, jewelry, and electronics. Gifts of a check, cash, or gift certificates can provide the opportunity for someone to obtain the gifts they desire at a lower cost to you. Most stores offer such sales to clear out merchandise, with the exception of discounters promoting consistently low prices who advertise that their items are “always on sale”. Coupons can also provide great savings at department and big-box stores during the holiday season, and they can be found in newspapers, coupon books, online, and on purchase receipts. While the congestion and hustle of Black Friday can be daunting, stores promote some of their biggest discounts on this day. It is wise to arrive early to find big-ticket items which may become sold out early on in the day, and to develop a list of what you are searching for prior to embarking on your shopping trip.

If your budget is constraining your discretionary income, do not feel pressured to buy expensive gifts for everyone on your list. Many people may actually feel inconvenienced by extra gift items, and would instead prefer a get-together such as a special dinner or holiday party. “Homemade coupons” can also be given to promise a favor, gift, or outing redeemable a later time if you do not have the ability to give these things at the present moment. Also, homemade gifts are practical and can be made from inexpensive materials in one’s own house. If you are not interested in going about the Christmas shopping routine at retail stores, which consumes time and gas, the websites of many large retailers allow you to order similar items at discounts from what you would find in-store. Also, shopping websites such as Amazon.com offer similar products, and the shipping-and-handling costs are often cheaper than the gas which you would expend driving to the store. Another convenient strategy is to shop year-round for gifts during other shopping trips to avoid having to make an extravagant outing specifically for the holidays.
With the right strategy, which involves shopping at the right stores at the right time, one can keep everyone on their holiday gift list satisfied for the next year. The most expensive gifts are not necessarily the ones which receive the most attention, as even personal artwork or stories can be a treasured present. Keep in mind the preferences of those for whom you are shopping, and try to find cost-efficient ways of giving them a gift to remember.

Wall Street's Out on Bail - But Not Quite For Free

Full-length SIFE Sense article from week of October 20

Across the country, the common citizen has been struck with uncertainty regarding a bailout bill which would provide financial capital to investment banks and mortgage originators who approved thousands of defaulted subprime loans. Although many were skeptical about providing money to those corporate officers and firms responsible, most felt that some government assistance was needed to abate further bankruptcies and protect embattled homeowners. On September 22, President Bush proposed a $700 billion “rescue plan” in the wake of Lehman Brothers’ and Merrill Lynch’s failings, and the Dow Jones Industrial Average declined below 9000 points for the first time since 2003 on October 9. However, due to apparent political maneuvering in the House, the bill failed there on September 27 by a vote of 228 to 205 (with one representative abstaining). The Senate came to a resolution on Wednesday, October 1, approving an immediate $250 billion rescue package by a 74-25 vote and an additional $100 billion for use by Bush at his discretion as well as an additional $350 billion on hold for future consideration, and the House followed on October 3 by approving the reworked package by a vote of 263 to 171.

The package was passed on several conditions, including the provision of stock warrants to the government from companies selling bad securities and the renegotiation of mortgages issued by these companies. In addition, in order to receive bailout money, corporations would be required to limit “golden parachute” packages for departing corporate officers. The executives of firms receiving aid of greater than $300 million would also face steeper income taxes. The issue at the forefront of the “toxic loan crisis”, as it has come to be known, is the solicitation and approval of subprime loans, which are loans and mortgages provided to those with bad credit or little collateral. While the mass media has stoked the flames of the crisis by largely broadcasting images of despair, only 2 percent of U.S. mortgages are currently under default. Consumer and investor fear is counterproductive to market stabilization because it discourages investing and reduces purchasing, therefore reinforcing the market slack.

While it is tenuous to conclude what the ultimate solution may be, individuals can lessen the effects of “toxic lending” by ensuring that their loans and mortgages equate to no more than four times their annual income and ensure financial security against stock market dips by diversifying their assets. A general rule of thumb to follow is that one should hold no more than fifty percent of their net worth in common stocks, placing the remainder in savings accounts, bonds, property, and other low-risk securities. As you grow older and near retirement, your stock assets including those in a 401(k) plan should gradually be divested into more stable securities such as bonds and money-market accounts to protect against market fluctuations. Historically speaking, amongst types of securities common stocks have been the most variable and therefore the riskiest.

Recently, Congress repealed a long-standing regulation requiring a minimal credit rate for loan and mortgage applicants, resulting in many who would have previously been unqualified for such provisions receiving them. Many of these people later defaulted on their credit due to their inability to finance them, and ultimately found their property repossessed. Credit ratings exist for a reason – to ensure that people pay back their debts and do not cost the government or businesses excess funds to finance “toxic loans”. You can protect your ability to receive loans by paying credit card bills on time, repaying student loans, and avoiding excessive credit card purchases which you will have difficulty repaying on time. While mortgage originators and loan financing institutions may hold ultimate responsibility for the current credit crisis, we can each play a role in preventing future economic pitfalls.

Taking a Bite Out of Debt

Plenty of temptation abounds on college campuses, especially for incoming freshmen. It is an epidemic which can inflict much trouble upon students, and it hampers the prospects for a life of leisure after graduation. “What is this insipid threat?” you are probably wondering. It is actually debt in the form of credit card bills and student loans.

Many banks offer loans to students needing money for tuition or a vehicle, which many former students work for years to finance. They and other financial institutions also advertise high-interest credit card deals to students, sometimes connected to a “free” prize. These offers have increasingly become offered over the phone and email after restrictions have gradually been enacted limiting on-campus solicitation, including stringent 2001 restrictions in California. Oftentimes, students become overwhelmed by credit card offers and feel obligated to purchase one. While it doesn’t hurt to hold one credit or debit account, college students often neglect to consider their ability to pay for credit purchases in the future. A recent study conducted by student loan agency Nellie Mae determined that the average debt owed by individual college students was $2700. More strikingly, approximately ten percent of students owed credit card fees in excess of $7000. This survey also indicated that the majority of college students hold more than one credit card, a side effect of generous-sounding lures from credit card companies. Evidence indicates that some colleges may in fact sell their students’ contact information to such companies.

For purchase-happy college students, a more beneficial alternative to a credit card is a checking and debit card account. This is because they carry a preset spending balance which cannot be exceeded without incurring a financial penalty, typically a fine of $30 to $50 per overdraw. If you find that a credit card is necessary, buy into an account with a relatively low credit limit and restrict yourself to one card. Actually, having one credit card may be beneficial because using one responsibly establishes good credit, which can help after graduation in securing loans and purchasing a home and vehicle. However, one must realize that credit cards do not provide “free” money to be spent haphazardly on unnecessary items and that such irresponsibility can really come back to haunt you later in life.