One upside to a down economy is that lots of products are on deep discount before Christmas. But which deals will truly satisfy? According to a recent Wall Street Journal article, behavioral economists and psychologists have found that products that enrich your relationship with friends or family members rate the highest on the satisfaction scale. So, when buying gifts, they suggest focusing on those that will promote time together with the people you love.
Matt's View
One idea is to give someone a handmade certificate good for dinner with you at a favorite restaurant. To pay for the meal, buy yourself a certificate at Restaurant.com
. The site sells $25 gift certificates to specific restaurants for $10. But you can do even better by doing an Internet search for "restaurant.com coupon codes." One reliable source for Restaurant.com discounts is CouponMom.com
, which often offers further 70 percent discounts. So, you can enjoy a $25 meal with a friend for just $3.
When shopping for gifts this year remember that the least expensive items are not always the best deals. Be sure to also consider how long a gift may last. As we considered what to buy our kids this year we were mindful of all the broken toys that fill our toy bins. So, we're giving one of our sons a new set of Lego blocks this year. Besides fostering creativity, they're virtually indestructible.
Matt's View
For ideas about gifts that last, look around your house and see if you can identify gifts that you received a long time ago. I flipped open a favorite book recently and saw an inscription from my wife. She had given it to me on our third anniversary, which was almost seven years ago. Books tend not to fall apart. Plus, the fact that she chose a book written by one of my favorite authors and that she wrote such a meaningful inscription has made it a gift that continues to give me great satisfaction many years after she gave it to me.
Despite a raft of bad publicity, gift cards continue to be a popular choice among holiday shoppers. If you give or receive a gift card this year, Consumer Reports offers some helpful advice
. For givers, the magazine suggests steering clear of retailers that are known to be struggling (it's tough to redeem a card from a bankrupt store) and give the recipient a printout of the card's terms and conditions. If you receive a gift card, register it right away in case the card is lost or stolen, use it quickly, and if you have any trouble with the retailer honoring the card, check out this state-by-state listing
of gift card laws.
Matt's View
If you're thinking about giving a gift card, why not give cash instead? Marketers have conditioned us to believe there's something tacky about giving cash, an effective strategy for generating gift card fees and profits from unused balances. But cash is accepted everywhere, it never expires, and while the issuer is certainly on shaky financial footing these days, it's not likely to go out of business.
More than three-quarters of all banks automatically enroll their customers in the most expensive form of overdraft protection. That's a key finding from a new FDIC survey, as reported by MarketWatch. If you are among the 25 percent of people who spend more than is in your checking account at some point in a given year, such banks will allow the transaction to go through and then hit you with a fee averaging $27. The article suggested looking into a less expensive overdraft protection option like a linked account. Under that scenario, if you have a savings account at the same bank and overspend your checking account balance, the bank will automatically cover the shortfall by drawing on funds in your savings account. Many banks offer this type of overdraft protection for free, but you have to ask for it.
Matt's View
One other reason to maintain a savings account at the bank where you have a checking account is that it's a good place for what I call near-term "When" savings. This type of savings, which I discuss in Money, Purpose, Joy,
is for expenses that come up less often than monthly - insurance bills, property taxes, vacations, etc. I encourage people to take the annual amount of all such items, divide by 12, and then set up an automatic monthly transfer of that amount from checking to a near-term "When" savings account. When you need the money, transfer it back to checking. It's a very effective way to make sure you have the money for such bills when they come due.
