The holidays are a wondrous celebration of the birth of capitalism - at least that’s what my accountant tells me. Each year we are compelled to undo all the hard of the past year as part of some social obligation that surprisingly has its own propaganda piece entitled “A Christmas Carol”. Everybody hates a scrooge, even the Scrooges hate each other. Don’t surrender to the herd just yet though, there are some ways that you can employ to come out of the Holidays with your wallet intact.
BUDGETS
Make a budget. Stick to the budget. Each year I make a list of persons that I want to give gifts to. I then prioritize those persons. I can never get to all of them. My mother is at the top of the list because I will have to deal with some cold stares for months-on-end. Also, she would just guilt me into spending more time with her. That money is well spent. I tell my wife I don’t need anything. I go to my close friends who also have young children and we all make a deal – no stupid presents this year. Same thing goes for my brothers. No gifts. Everyone readily agrees to this but very few people are willing to be the one to suggest it. It usually falls to me to be the cheapest one in the room. It may seem dumb to not give gifts to the persons closest to you, but that’s life – a whole lot of dumb. Make a note of how much you want to spend on each person on the list. Stick to it and mark them off as you buy the gifts. Nothing is more frustrating than buying the same idiot 2 gifts.
EARLY BIRD GETS THE CHEAPEST WORM
Start shopping early. This can give you time to compare prices at various location. You can also explore your options more fully for each person. Look out for pre-Black Friday sales. Don’t wait too late to start shopping as this can lead to more impulsive and rushed purchases. This can lead to excessive expenditure.
MONOPOLY MONEY
Gift cards can be tricky. Say you get a $100 gift card. Human nature dictates that you want to get every penny’s worth. That usually means that you are going to spend over $100 on your gift – eg $170 on a 3DS. This extra $70 may be money that you do not have. If you are spending the extra using a high interest credit card that you cannot pay off immediately, then the gift becomes a trap. You have a few options. You can do the unthinkable and spend close to that $100 mark and walk away from the few dollars left on the balance. I have done this. I still have nightmares, but I’m still alive. You can also choose to sell the gift card on ebay and use the money to pay off the debt you racked up during the holiday season – I have also done this. Much better dreams to be had. Because people tend to see gift cards as “Monopoly Money”, they tend to spend it on frivolous and unnecessary things. Selling the gift card can be a step towards increasing the transparency of the currency and may lead you to spend it more responsibly. The same goes for actual gifts. Re-gift or sell if you do not want it. Make sure that you can make up a reasonable excuse for why you no longer have it to the person who gave it to you.
SALE TRAP
Beware of sales. Beware of : “it’s so cheap I would be stupid to pass this up”. Weight your decisions carefully. Spending $20 for a $40 item that you never use is not “saving $20”, its wasting $20. With spending, the glass is always half empty. Also, how much did you spend for that glass? Go to sales with a plan, a list and clear priorities. It’s very easy to get caught up in the hysteria of a sale. Buy, reassess when you get home and sell or return your mistakes.
LIVE AND LEARN
Reflect of the ghost of Christmas past. How much did you spend last year? How did it affect you afterwards? Was it worth it? How long did it take for you to pay off your debts? Take a long hard look in that mirror. Then sell the mirror on ebay to pay off your debts. Also, try to recall those hidden expenses that you did not plan for - travel, food, candy, a tree, decorations, greeting cards, postage, a pair of scissors to cut up your credit cards. Mistakes are acceptable provided you learn from them.
OFF WARRANTY
Don’t fall for extended warranties. Not everything needs them. Someone once tried to sneak in an extended warranty for a table I bought. A table. Unless you’re buying in on an unproven technology (like a functional light sabre), rest assured that the cost of the extended warranty usually equals the cost of a typical repair. When the Occulus Rift finally gets a retail version, I might get an extended warranty for that because it is a new technology by a company that has never made hardware before. I think we have perfected “table technology” though so I’m gonna pass on that. Warranty terms are decided upon by mathematicians, and in the long term, they are never in your favor. It’s usually money down the drain. In the 15 years that I have been buying stuff, only twice did something go wrong during the additional 2 years that the extended warranty provides. In both cases, the cost was less than the warranty would have been anyway. If I had wasted money on extended warranties for everything I had bought, I would probably have never been able to upgrade from my PS2 (which still works btw).
HOUSE ARREST
Entertain at home. Avoiding expensive restaurants for a while can go a long way towards offsetting the additional expenditure that the season brings. Also, you don’t have to attend every Christmas party or decorate every corner of the house. Prioritize where you want to decorate and take the time to store your decorations properly for next year. You don’t have to go all Martha Stewart of people. Most are just happy that your home is clean. Since I had kids, I’ve forgotten what that looks like.
HOLIDAY BLUES
Keep your emotions and loneliness in check. A lot of people get depressed during the holidays. This can lead to overspending. Retail therapy is like putting a Band-Aid on a gaping chest wound. The depression only gets worse when the bill finally comes. Lonely? Donate your time to serving the less fortunate. Feel better about helping others and cure some of that loneliness without the crushing debt. Get out of the house. Remember, your feelings are there to signal that something is going on that needs your attention. The Holiday Season is not some switch that automatically makes everyone happy. However, find ways to take care of yourself.
THE KUTARAGI PRINCIPLE
Take a second job or a part time job. Okay, you’ve seen enough sitcoms to understand this principle. Look for something that you can enjoy. Don’t write gaming blogs for prizes (those positions are filled - all of them – trust me). Ask about employee discounts at the worksite. Tons of stores are looking for part-time help at this time. The average person spends $1000 more at this time of the year. A part time job can go a long way towards compensating for this expense.
CREDIT CRISIS
The absolute worst move you can make is to charge gifts on a credit card you can't afford to pay off in the short term (within 2-3 months). If you can pay off that debt in January, then you’re good. However, if you intend to pay it off slowly each month by making minimum payments on your cards, your interest charges will double the price if your card has an 18 percent rate. This means that the $400 Ps4 you buy will really cost you $800 when you are done paying for it. Try not to do this. Be wary of “Store Credit” for similar reasons.
If you cannot avoid credit card debt, then there are a few things to note. Don’t use too many credit cards if you are not good at keeping track of thee debt. Every time you make a purchase using a credit card – record it. Keep your receipts. Have a cumulative total of how much you have spent across all you cards. Update that total EVERY DAY. Stare at that total every day. Stare at it so long that an image of it gets temporarily burned onto your retina. My best advice is to only spend cash at this time, but not everyone can do that.
Now for the tricky part. Paying off the debt. My advice is to pay off the cards with the highest interest rates first. However, before you can do that, you need to figure out what your interest rates are. Interest rates for credit cards change over time. Let’s say you got a card at 8%. You use that card expecting things to be manageable. The thing that you do not realize is that if you default on any other bills, your bank can use that as an excuse to increase your interest rate. The loan does not even have to be from the same bank. For instance, you have a credit card with “Bank of Sharks” at 8%. You also have a student loan with “The Iron Bank”. If you miss or are late with a single student loan payment, Bank of Sharks can increase your credit card interest rate up to 33% or so without telling you. They claim that you are now higher risk for lending. All of a sudden, you are paying more for your item. The price has effectively changed AFTER you bought it. Find out what your current interest rates are from your banks if you are unsure. Pay attention to your credit card statements. One bank raised my interest rate to 25% without me knowing. I only found out because I was late for a payment once – I always pay off my cards before any interest charges occur. I don’t care why they did it because it won’t happen again. I actually profit from having credit cards in the form of rebates and flier miles. Banks have a term for people like me. They call us “deadbeats”. Now that’s some irony right there.
Well, now that I have filled you with the requisite grinchitude, I want to wish everyone Happy Holidays. Remember to enjoy yourselves amidst all the accountancy work you will be doing. Don’t abandon your inner Scrooge completely. He has his uses. The key is balance. Prioritize and enjoy. You work hard for your money, don’t go pissing it all away in the name of social obligation – you can’t eat that.
Fortnite fans are begging for the return of OG mode while using the player count as proof that fans are not happy with the game's direction.
It's been revealed that Helldivers 2 is Sony's fastest-selling game ever, beating the record previously set by god of War: Ragnarok.
It's not a first-party game though. Is it really too much to expect these low-rate websites to have the bare minimum of knowledge about the topic that they write about?
This reminds me of the hoops that some diehard Nintendo fans would go through to claim a game (like Bayonetta 2) is first-party just to say Nintendo is pumping out games.
It’s a second party title, like Ratchet and Clank prior to the purchase of Insomniac, or like Sly Cooper before the purchase of Sucker Punch, or like Dead Nation before the purchase of Housemarque, etc.
Just wondering if you don't consider Pokemon, Smash ultimate or Metroid Dread first party because Nintendo doesn't own the studios that made those games...
That's insane! Congratulations Arrowhead! Be good if Sony did buy them, they could work closely with Housmareque and they could both help each other with projects, that'd be good to see
The studio behind the popular Thief Simulator 2 has announced its next project, Crime Simulator, for PC and consoles.
I got rid of all but one of my credit cards - absolutely NO regrets.
I wish someone had explained credit cards to me earlier on.Would have saved me a ton of grief.
Nice blogs
Can't say I've ever heard of a bank increasing your interest rates for a missed payment, same goes for it affecting existing credit agreements with other banks.
Missed payment normally affect future applications as your credit rating decreases effectively blacklisting you from obtaining additional credit at minimal APR rates.