Gifting: The Pressure is OFF

A-christmas-story-ralphie-santa We’re now in the midst of Hanukkah and Christmas will be here in a few short weeks.  The Season of Giving, right?  And with all of the great things about this season also comes gifting stress.  You know how it works…You get together with someone this time of year for lunch or coffee and they come bearing gifts.  You immediately feel like a putz because you didn’t get one, so as soon as you leave, you head to the mall and buy them a gift…out of guilt.

Or, your children spend the entire month of December hearing about all the presents that their friends at school are going to get.  They start listing out the aggregate of ALL the gifts they’ve been hearing about at school on a daily basis and you are burdened by the thought that your child might be hanging his or her head at the lunch table when all the kids are discussing what they got.  So, you get them…everything.

You have a new boyfriend, girlfriend, fiancé or spouse and this is your first holiday season together, so you decide that you’re going to show them you know how to do it right.  And, you’re scared to death that they are going to outspend you, so you make sure that they don’t…out of fear.

Fear and guilt are not good motivators.   Thoughtful, heartfelt impulsion, on the other hand, is a great way to gift.  So, if you’re a last minute gift buyer like me, I suggest that you sit down and think about who you feel impelled to give a gift to, and then actually apply a budget to each gift – a guideline on how much you want to spend.  NEVER use credit to pay for a gift, because then you start the New Year off with a lower net worth than you had the day after Thanksgiving.  If you free yourself from giving out of guilt or fear, you’ll enjoy the season all the more.

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The Cure For Greed

Interesting, isn’t it, how all that seems to be good about the holiday season recently incepted also seems to be accompanied by something… less than good?  Along with the bountiful feast on Thanksgiving comes the gluttony of eating like animals preparing for hibernation.  Along with the tradition of competitive college and professional football comes the sloth of watching three games… back-to-back… in the same spot… on the same couch.  And along with the season of giving comes the season of frenzied consumption, driven by marketing that at times seems downright manipulative.

Please don’t perceive my tone as judgmental; I only used the examples mentioned because they are those temptations to which I am most susceptible.  I am not a member of the naturally frugal minority condemning the profligate materialistic majority.  It is, after all, my tendency to prefer more over less, better over worse, cool over dorky and hip over unfashionable.

So it is with humility, then, that I posit this “Cure for Greed,” learned quite unintentionally through an experience many years ago that helps me avoid succumbing to the tug of materialism, an enticement we all face daily:

Guest blogger, Jim Stovall, on “Spending and Saving”

One of the most important things I've learned in educating and advising in the arena of personal finance is that no one person has the market cornered on wisdom… and I'm certainly no exception!  Therefore, in order to make the information in this blog as comprehensive and beneficial as it can be, I will be inviting guest bloggers of varying specialties on a semi-regular basis to share their wisdom with us. 
 
It could be no more appropriate, then, that my first guest blogger is Jim Stovall.  Jim has more illustrious titles than I have letters in my name, but my personal favorite is co-author.  Indeed I'm humbled that in addition to selling over 5 million copies of The Ultimate Gift, Jim saw fit to put his name beside mine in our recently released collaboration, The Financial Crossroads: The Intersection of Money and Life.  This week, Jim shares with us from his weekly column, Winners Wisdom.   
 
Enjoy!
 
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Spending and Saving

by Jim Stovall

Whether you make millions of dollars a year or earn minimum wage, there are only three things you can do with your money: You can spend it, save it, or give it away.
 
Your spending may range from absolute necessities to outrageous luxuries. Your savings may be prudent investments or coins in your piggy bank. And your giving may be coins you drop in a donation jar or launching your own foundation. But there are still only three things you can do with every dollar.
 
Financially successful people make sure that each dollar is divided between spending, saving, and giving. Traditionally, Americans have been a very giving and generous group of people. This generosity fluctuates some but remains strong, even during difficult economic times. If you’re not giving away part of every dollar you earn, you’re missing a great opportunity and one of the true joys in life. While, as a society, our giving can always improve, we seem to be doing fairly well overall.
 
The problem arises when we make the decision between spending and saving. Savings rates in America are dangerously low and, in some sectors of the population, the savings rate statistically actually drops below zero. You may wonder, as I did, how it is possible to save less than zero.
When I researched the statistics, I found that many people today are spending significantly more than they earn, and the disparity is showing up in their credit card balance, line of credit, or other debt instrument. This is a dangerous practice as without long-term retirement investments, your golden years may seem more like aluminum foil than gold. Without some emergency savings, you are like that pilot flying his plane 50 feet off the ground. While it might work for a little while, sooner or later, you will crash and burn if you don’t leave some margin of error in the form of a cash reserve.
When we look at global savings rates, we find that Europeans save 20%, Japanese save 25%, and the Chinese save over 50% of their income. This is fascinating when we consider that economic growth is thought to be fueled by spending, but China has one of the fastest-growing economies while their people are saving half of their income.
Global statistics are interesting for study or theoretical discussions but really don’t matter to you and me. The economic conditions on Wall Street or The White House should not concern us nearly as much as the financial picture on our street at our house. There are many ways to calculate the best way to spend, save, and give our money.
In my newest book, The Financial Crossroads, my co-author Tim Maurer and I explore a number of ways you and your family can win with money. We offer many calculators and other tools you can use to get the information you need so you will know what to do; however, it’s important to realize that financial information abounds. As in most things, with money we don’t fail because we don’t know what to do. We fail because we don’t do what we know.
As you go through your day today, commit to get the information you need to make quality financial decisions and then act.
Today’s the day!
Jim Stovall is the president of Narrative Television Network, as well as a published author of many books including The Ultimate Gift. He is also a columnist and motivational speaker. He may be reached at 5840 South Memorial Drive, Suite 312, Tulsa, OK 74145-9082, or by e-mail at Jim@JimStovall.com.