Friday, December 21, 2007

Why I really hate Gift Certificates

My mother, who is one of the wisest people I know, was talking to me the other day about gift certificates. We were having this discussion while debating what to get our needy-ass, yet loveable relatives for Christmas (only a couple of them are needy, most of them are loveable). Christmas is that overly commercialized holiday that seems to come every single year. I don't mind Christmas, but it seems that the word "Christ" has been removed in exchange for the last part "must". "I MUST have this", "we MUST do that", it's crazy!

At any rate, we were wondering if gift certificates were the best gift to give, since it avoids the awkward, yet inevitable reality that you are going to always end up giving something to someone that they just bought, don't want or don't need as much as something else. So, you have then graced your loved one with the burden of yet another trip to the pawn shop or the 50 mile long Walmart return line right after the holidays are over. They are also burdened with the guilt of having to pretend that they like your gift, even though they really don't. You know, those fake, awkward smiles that make your face hurt and stomach turn.

We both concluded in our scientific analysis (My Mama and Me Labs, Inc.) that gift certificates were better than regular gifts, since you can get what you want.

But I had to put the brakes on our ground breaking analysis....I then said, "Well, based on that logic, it would seem that money is the best gift certificate, since you can not only get whatever you want, but you can use it at any store."

That led us to wonder: "What exactly do companies give us in return for exchanging a hard earned $50 dollars that can be used ANYWHERE for their pathetic, multicolored little piece of paper that can is also worth $50, but can only be used in ONE PLACE?"


The companies typically give us nothing in exchange for the purchase of a gift certificate. It would be one thing if they allowed us to purchase a $30 gift certificate for $25. That would make our decision to limit the stretch of our money at least partially worth while. But when you give them $30 dollars that can be spent anywhere, they give you back the same $30 dollars that can only be spent at one place.

That's not all they do to screw us for the holidays.

Companies also get over on the fact that many of us never use the gift certicates anyway! According to Needham, Mass.-based consulting-firm TowerGroup, over $5 billion dollars in unused gift certificates allow corporations to fill the stockings of their stock holders. And believe me, they aren't giving that money to charity.

So, my mother and I both came to the grim conclusion that gift certificates, from a financial standpoint, are not very good gifts. Cash is the best gift certificate there is. It's the thought that counts, and my mother and I put quite a bit of thought into our decision. We hope our relatives appreciate it.

So this year, everyone we love is going to get a card with cash in it. That's the same gift that makes every third grader smile (Remember when that old relative you never talked to sent you that ugly card every year that always had cash in it? Don't pretend like that WAS NOT the first card you opened!). Perhaps the third graders are onto something, since this gift can make adults smile even more.

Friday, December 7, 2007

Financial Lovemaking: Merging Assets with Your Partner in Ways that Feel Good

You can think of the Financial Lovemaking system as the “Kama Sutra of Money Management”. It teaches you the ins and outs of the financial lovemaking process, and how your financial choices can serve to stimulate and strengthen your relationship, rather than destroy it. Millions of couples are making financial love, and a lot of them are doing it the wrong way. Here are some tips on how you can avoid being one of the millions of people who find themselves with battered relationships due to bad financial choices.

Here is just a small list of ways that someone could ruin your life financially:

A partner with horrible credit could keep you from ever getting loan.

A partner with terrible spending habits can ruin a family’s financial security.

A partner with a substance abuse or other costly addiction could deplete a family’s assets.

A partner with unhealthy connections to deadbeat relatives, who always need money, may drain
your assets.

A partner that with an income that is too low due to a lack of education or poor professional choices could ruin you financially.

A partner may steal money from you or borrow it without your permission and use it for something frivolous (i.e. a bad business investment, gambling, etc.)

A partner who makes bad financial choices may get you into trouble with the IRS.

A partner who decides to separate from you may end up dragging you and your money through a long and costly legal battle.

Things you should know before you start the system:

The key to good financial lovemaking is oral – you must communicate with your partner

You must be prepared to be honest.......Honest about areas that need improvement.

The key to good financial lovemaking is rhythm.

It’s not a matter of someone being good or bad. It’s about whether or not they are compatible with you.

Do they complement you if you are seeking to be complemented? Do they contrast with you in ways that you know you need to be contrasted? Do they serve to strengthen your good habits or enable your bad ones?

Steps in the financial lovemaking system

1) Getting financially naked with your partner
2) Request documentation of credit reports, debt levels and income levels

The documentation must be recent, not delayed.

3) Taking and giving your partner an FIV test (The Financial Irresponsibility Virus)
Does your partner have a financial venereal disease?

4) Getting your body ready for financial lovemaking....How are you going to look when you are financially naked?

If you do not have a partner, how do you get ready for when you do?

How do you feel about your financial body in the first place?

5) Financial foreplay

This process can be fulfilling, rather than frightening and draining. Spend time getting your partner excited about making financial love. You may have to educate them about the process.

6) Financial fantasizing: Do you have any financial dreams and goals you want to share? Write them down together and tackle them together. Try to find mutually exciting fantasies.

7) Consider doing a 3-some: Get good advice – bring in an objective outsider who can facilitate your lovemaking process. Subscribe to magazines and websites that are going to enhance your financial lovemaking with one another.

8) Finding a rhythm: It’s not a matter of them being spenders or savers. The question is whether or not you can live with what you see. Does the person’s habits complement your own and allow you to reach goals more easily? Do you have a plan on how you are going to merge your money and manage it together? Is everyone involved, or are there silent partners? Remember – Silent partners don’t get to make financial love. Silent partners just get screwed.

9) Reaching your climax together: Are you on the mountain top alone? – Have both of you agreed that your financial goals work best for each of you, or is one of you taking the lead and running with it? Did both of you participate, or did one person do all the work? This can leave you feeling burned and bitter.

Questions you must ask yourself to determine your needs during Financial Lovemaking

1) Does size really matter? – The size of your mate’s bank account.
Does it matter to you?
How do you feel about your own size?
Do you feel good or bad about your partner’s size?

2) Am I a selfish financial lover?
Bad lovemaking usually starts with selfishness or deceit.
How do you respond when things go bad?
Do you see your partner as “your ticket”, or do you see them as someone who supplements what you are going to bring to the table?

3) What is my own relationship with money?
This is going to impact how you deal with the money of others. It also plays a role in determining whether or not you need financial condoms (protective mechanisms to allow you to keep your money distinct from anyone else’s).

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.