Avoid The Ghost of Christmas Past!!!
by Jim Garnett
ICFE Board of Education Advisors - The ICFE's Ask Mr.G on
The "Ghost of Christmas Past" is on the loose again this
holiday season, and millions of Americans will have an
encounter with him. He is an enemy, a robber, and a thief.
He is virtually invisible as he blends in like one of our
old family friends each season.
This "Ghost of Christmas Past" is the debt still owed on
past Christmas(es) when yet another Christmas rolls
around. If not detected and dealt with, he can literally
suck the life out of a family's finances!
Each holiday season many families charge their Christmas
expenses on credit cards and pay the minimum payment on
the balance each month. As I will show you, this can take
multiple years and thousands of dollars of interest to pay
for just one Christmas, yet alone numerous Christmases.
So, let's "ghost-buster" this spook by following some
1. Plan Your Christmas. Think about Christmas before it is
upon you by setting aside money year round through a
"Christmas Club", a special savings account, or by saving
change in a bottle. Also shop for bargains in January for
2. Proportion Your Christmas. Your gifts should be
proportioned by what you can afford, not by what you have
access to buy. Most of us have access to much more credit
than we can ever repay in a timely manner. Determine what
you can afford by how much actual money, not plastic
money, you can spend toward Christmas.
3. Pay For Your Christmas. Christmas's charged on credit
cards can easily "haunt" us for years to come. Consider
that the average amount charged on credit cards for
Christmas is around $1000 per family. If 2% minimum
payments are made toward that debt at 12% interest, it
will take over 8 years to repay it with an additional $545
interest charged. That means your kindergartener's
Christmas won't be paid off until she graduates from 8th
grade! That means her Christmas presents were long gone
before they were actually paid for.
And that is only one Christmas. Often Christmas debt is
"layered" year after year! It is much better to simply pay
for your Christmas each year within the boundaries of what
you can actually afford.
4. Personalize Your Christmas. Why not put some real
thought into this Christmas and make something instead of
buy something. Gifts like baked goods, handmade ornaments,
or even pictures of the kids give your Christmas the
personal touch. You will substitute labor and creativity
for cost, and your gifts will be just as, if not more so,
Things You Should Know About Holiday Gift Cards
by Paul S. Richard
Another alert goes to purchasers of gift cards. Not all of
them are created equal - some expire - and consumers are
being caught unaware of the charges and fees connected
with gift cards, especially those that aren't spent right
According to surveys conducted by retail merchant
association some 53 percent of surveyed individuals
indicated they would be purchasing gift cards from one or
more merchants this gift giving season. The main reason is
convenience and not having to visit so many stores.
The cards are being marketed as a gift giver's dream
because they are easy to hold on to and in most instances,
balancesmay be added to, however buyer beware because
almost all gift cards come with fees, some with user
limitations and most, but not all, do eventually expire.
Some of the other fees involved include, but are not
limited to: purchase or issuance fees, inactivity fees and
replacement fees. The inactivity fees, usually begin at
the end of an 18-24 month period, with most gift cards
begin assessing fees of $1.50 to $2 per month, taken from
the balance of the card until there is either no balance
or the expiration date has been reached. Consumers
thinking about gift cards as part of their holiday giving
are encouraged to ask questions and read the fine print.
Also emphasize to the recipient that the card should be
used promptly because of non-use fees and an expiration
date. For example, a J. C. Penny gift card must be used in
12 months from date of purchase or a $1 per month fee is
accessed after the 12th month.
Gift cards are not the same as paper gift certificates,
which have a set dollar amount and rarely an expiration
date. Many states have laws on their books requiring
retailers to track gift certificates and turn the money
over to a state fund, if the certificates are not used
within a certain time period. Gift cards are also subject
to theft. It is rare when an ID required to use a gift
card, so thieves find them very appealing. In some states,
the most a consumer can lose on a stolen gift card is
limited to $50 after it's reported. However if the thief
spends some of it before its discovered lost or stolen,
the money spent by the thief if usually not recoverable
through the merchant.
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.