Money Crashers » Giving

Out of Control Spending On Gifts and Holidays

Erik Folgate — Thu, 20 Aug 2009 20:49:00 +0000

I love to give. One of my favorite ways to show appreciation, affection, or just simply make someone happy is to give them a gift. I honestly don’t do it, because I am obsessed with materialism. I just know that receiving an unexpected, thoughtful gift brings can really brighten up someone’s life. The keyword in that sentence is “thoughtful”. Just as much as I enjoy giving gifts, I hate giving gifts just for the sake of giving something. I like putting thought into gifts, and I am not a big fan of receiving a gift with no thought put into it. Before you jump on me, let me explain myself.

There is a time and place for unthoughtful gifts. Gesture gifts are a different animal. If you are giving a small gift to a client for a referral or a business partner, then you don’t need to put a lot of thought into the gift. It’s purpose is to show appreciation for something a person did for you.

I am still grateful for unthoughtful gifts. You should always be grateful and cordial when receiving an unthoughtful gift, even if you’ll never use it. But usefulness is my main reason for not liking gifts with no thought put into it. If you would have thought for a minute about my interest and needs, you would have been able to get me a gift that I can use.

Why Are We So Obsessed With Gift Giving?

Did you know that many family’s homes look like Christmas on Easter? Seriously, gift giving on Easter? For Christmas, one gift doesn’t suffice anymore. If kids don’t have at least 10 gifts, the economy must be in recession, right? If you don’t buy your spouse four or five gifts, there’s a problem. Why has an emphasis been placed on quantity over quality? I’d much rather receive a $100 gift from my wife than five different $25 gifts. She would save $25! Have you ever received a graduation announcement from an acquiantance’s child? Hey, I’m glad you graduated, but I’m not going to feel obligated to send you money! Have you been invited to multiple wedding/baby showers and bought a gift for both showers? Gift giving is getting out of control.

We Are The Most Celebratory Nation In The World

We celebrate everything. Corporations love this country, because there’s always a holiday coming up that we’ll spend money on. Think about how much money you spend every year on worthless pseudo-holidays like Halloween and Valentine’s Day? Now throw in holidays that mean something like Christmas, Easter, Thanksgiving, and Independence Day, and your spending a lot of disposable income just to celebrate a holiday! I am completely guilty of this, but I have managed to make a conscious effort not to spend a lot of money on non-holidays like Halloween, Valentine’s Day, and St. Patrick’s Day. I love parties, and I love being with people. I am not opposed to spending money on holidays if it means you’ll be having fun with your friends and family, but I just think we need to watch what we spend money on during the holidays.

Five Ways To Spend Less Money On The Holidays

Halloween: make your own costume if going to a costume party.
Thanksgiving: Have a pot-luck Thanksgiving dinner with family and/or friends.
Christmas: Do a Secret Santa gift exchange with your immediate family and put a dollar amount limit on the gift.
Valentine’s Day: Cook a great meal for your woman, pack it up, and go to your favorite outdoor spot for a picnic. For people in snow, re-create your first date, unless it was a really expensive first date!
Fourth of July: Instead of buying fireworks, go to the best fireworks show in town, and have people over beforehand for beer, hamburgers, and watermelon!

Three Alternatives To An Expensive Gift

Quality Time. It’s the best gift you could give anyone, especially with parents. Offer to spend the day with your mom or dad, and it’s better than anything you could have bought them.
Make a Gift. Even if you aren’t crafty, you can blow up a photo and frame it.
Offer your services. Get your mind out of the gutter! I’m talking about helping someone out like free babysitting, lawn service, professional service (i.e. legal, accounting), or something else that has a great value but just costs you time rather than money. Yes, I know that time is money, but not on the weekend!

Got any more tips for spending less on gifts and the holidays? Share them with us below!

What Do You Think About Obama’s Plan To Reduce Charitable Giving Tax Deductions?

Erik Folgate — Wed, 11 Mar 2009 18:23:51 +0000

When President Obama announced his budget plan, one of his tax proposals was glossed over by the media, and I wanted to get your opinion about it.

Starting in 2011, President Obama plans to reduce the charitable giving tax deduction from 100% to 28% of your charitable contribution for families who earn over $250,000 in adjusted gross income. Right now, if you give $100 to your local charity, you can deduct $100 from your adjusted gross income, which determines how much tax you owe on your annual federal taxes. Obama has coined families making more than $250,000 per year as “wealthy”, so he is imposing a reduction in this tax deduction to 28 percent. For families that this applies to, they will only be able to deduct $28 per $100 they give to charity on their taxes.

PROS

This will help discourage wealthy people from avoiding taxes by setting up bogus charities to give to and receive a large tax deduction.
It will increase tax revenue for the government

CONS

It could discourage wealthy people from giving generously to charities and other non-profit organizations.
It’s really a tax increase without calling it a tax increase.
Charities and non-profits could see a reduction in revenue, thus causing them to scale down their operations and goals.

I have always been a strong advocate for giving generously to others, whether it’s your money or your time. One of my core beliefs about being financially responsible and accumulating wealth is to set yourself up to be a generous giver. I don’t like the fact that charities and religious organizations could suffer from this and the fact that wealthy people are being penalized for giving. I understand that there many wealthy people that manipulate in order to pay less taxes, but it seems to me that a watchdog agency for charitable contributions would be more beneficial than a reduction of the tax deduction.

What’s your take?

My Favorite Story About Giving

Erik Folgate — Mon, 29 Dec 2008 17:00:38 +0000

Coincidentally, my favorite story about giving involves a gift I gave to someone, but don’t take this as a self-serving story to build myself. The summer before my senior year of high school, I went on a mission’s trip to Cuenca, Ecuador with my church’s youth group. Cuenca is a quaint town nestled in a valley of the Andes Mountains, and it is one of the most beautiful places I have ever visited. The mission was to bring a small bit of medical supplies relief to the physically handicapped in Cuenca. In order to be a part of the trip, each high school student was required to bring a wheelchair with them. We also brought dozens of canes and walkers along with us. As you can imagine, checking 42 wheelchairs on an airplane was no easy task, and the airlines wasn’t even prepared for us to be bringing them despite the fact that we warned them weeks in advance.

Our missions team was split up into four different groups. We rotated areas that we served each day between medical supplies giving and wheelchair fitting, construction work, and ministry to a women’s prison and childrens orphanage. I’ll never forget the day that our group was assigned to be at the clinic where dozens of physically handicapped people lined up to receive our supplies. I thought to myself, “Getting a wheelchair is the worst of our worries in the United States”. But in this poor mountain city in the middle of South America, wheelchairs were a scarce commodity.

That day, I met the man that received the wheelchair I brought from the states. It was one of the most powerful moments in my lifetime, because I was giving a gift that would change someone’s life. We took a picture together, and I smile every time I see that picture while flipping through picture books. We often take for granted the power of giving to others, and we often underestimate the impact that a gift will have on someone. The anonymous gift of $500 that a single mother receives during the holidays could allow her to provide for her children during Christmas. The scrapbook you make for your mother could warm her soul beyond any expensive gift you give her.

I know that the season of giving is over now, and we’re looking ahed to next year, but remember that giving is something you can do throughout the year, not just on the holidays. And remember that the difference you can make from your generous giving could have an impact on someone’s life for a lifetime. Related Posts:

My Favorite Story About Giving is a post from: Money Crashers

How To Check A Charity For Legitimacy

Erik Folgate — Mon, 08 Dec 2008 15:47:16 +0000

The Christmas season is all about giving back to others in response to the blessings you’ve received throughout the year. At Money Crashers, we believe that the purpose for accumulating wealth is to become financially independent, leave a legacy for your family, and give back to others. I encourage all of you to give abundantly this season, because giving is one of the most fun and rewarding acititivies you will do in your lifetime.

Unfortunately, there are charities out there that say they are charities, but don’t do a great jobs at using the money donated to them. Here are some tips I got from Kiplinger’s Magazine to help you check out a charity before you give money to it.

Look at Spending Priorities. Make sure that the charity is efficient. How much of their money is going to the actual charity that they boast? What does their yearly budget look like? You can visit Charity Navigator, which rates the financial health of over 5,300 charity organizations.
Evaluate Accountability. Make sure the charity has a clearly defined mission and strong organization structure to get things done. Many small non-profits go through years without any significant impact in their community or area of charity.
Beware of Red Ink. Charities must file a 990 form with the IRS, and if you can’t find it on their website, ask for a copy. They are required to disclose it to potential donors. If that form shows that they have negative assets, then don’t give to that charity. You don’t want that money going toward paying off debts.
Gauge the Cushion. What you are looking for here is if the charity has an emergency fund. Much like we preach on individuals carrying 3 to 6 months of an emergency fund after they get out of debt, companies should have the same thing. It is expressed as their working capital ratio.
Review the Charity’s Annual Report. In their annual report, the words are a little misleading. If the auditor puts “unqualified”, then they have signed off on the charity’s finances without reservation. If the auditor writes “qualified”, then he or she believes that the charity will have a hard time surviving for another year, possibly because of the loss of a major donor or a gradual decline in contributions.

The bottom line is to do your homework before you hand over your hard-earned money to a charity this year. Giving is encouraged, but be responsible with it. Just like you would never give a homeless person money to buy alcohol or drugs, you never want to donate to a non-profit company that mishandles their donations.

The Money Crasher’s Guide to Tipping

Erik Folgate — Mon, 15 Sep 2008 12:26:52 +0000

We live in a society where service industries thrive by performing superior customer service. Because we live in a capitalistic economic system, a custom of rewarding superior customer service has developed through the use of tipping. Tipping is a controversial subject, because many people disagree about who to tip, when to tip, and how much to tip. There are no set laws about who you should tip, when you should tip, or how much you should tip. There are not any laws about tipping at all. If you go to a sit-down restaurant, eat a meal, and leave without tipping, you won’t be breaking the law. The market correction for people who do not tip at restaurants is that they will build a reputation of not being tippers, and the servers of the restaurant will not give them good customer service. You don’t tip when you should, and you don’t receive good service. It’s as simple as that. Here are some ideas about who you should tip, when you should tip, and how much you should tip.

Servers and Bartenders: You should tip about 15% to 20% to a server or bartender. Tipping 5% – 10% is a slap in the face, unless they were really bad but you still want to give them something. This is the most common service provider to tip. You should always tip your server or bartender, unless they have completely failed to provide you good service and/or are extremely rude or offensive to you. Remember, sometimes the kitchen staff is responsible for your bad dining experience. It’s not always the server’s fault when the food is not cooked right or it comes out late.
Food Delivery Drivers: Tip 10% to 15%, but never less than $2.00. Always tip a delivery driver unless the food is obscenely late.
Movers: $10 to $20 per mover unless you’re getting a full-service move. Then, the cost of the movers is included in the hefty price. Just provide cold drinks and food for the movers the day of the move and they’ll take good care of your stuff. Many homeowners are more likely to damage their stuff rather than professional movers. If you’re really paranoid about your stuff, you might want to tip no matter what, but accidents happen whether you tip $10 or $50.
Barbers and Hair Stylists: Usually $2 to $5 is good for a barber. I’d say that 10% to 15% to hairstylists is necessary, especially if you visit them regularly. Girls, you don’t want your hair stylist pissed off at you with your hair at their mercy.
Hotel Staff: $1 to $2 for doormen, bell hops, and valet parking attendants. Tip your maid $2 to $5 dollars a day if you want to ensure that your stuff is in good hands. Concierge should be tipped well if they do something extraordinary for you.
Taxi, limo, shuttle drivers. Usually 15% of the fare is good, but you might want to do 20% if they help you with all of your luggage. Watch out, because some airport transfers and limo driver’s fees will already include gratuity, but they won’t refuse extra.

People You Shouldn’t Tip On a Regular Basis

Financial Professionals
Attorneys
Contractors
Any salesman that works on commission
Mortgage loan officer
Real Estate agents
Travel Agents
Appliance Repair Technicians
Computer Technicians
Landscaping Service and Pest Control
Dry-Cleaners
Fedex/UPS couriers
Post Office couriers

Tipping and Giving on Christmas and Winter Holidays

The Christmas and Hanukkah holiday season is definitely a time for giving. You may want to consider giving a gift or a tip to the service providers in your life that you normally wouldn’t tip. A post office worker, garbage man, personal trainer, tutor, baby sitter, newspaper carrier, nannies, maids, gardener, and others should be considered for a small holiday gift or cash gift. These people make your life easier throughout the year, and you should attempt to show some appreciation to them during the holiday season.

Here is a link for a a more comprehensive list of who you should tip, when you should tip, and how much you should tip. It’s important to remember that tipping is still an act of giving whether it’s unsaid requirement or not. You’re not legally obligated to do it, so it’s still an act of giving. Do it out of the goodness of your heart, but do it in accordance with the quality of service provided. Don’t limit yourself to tipping the “recommended” amount if the importance of the service provider in your life exceeds the recommended amount.

What are your thoughts about tipping and who you should tip? Related Posts:

The Money Crasher’s Guide to Tipping is a post from: Money Crashers

How To Find Free Money Today

Erik Folgate — Fri, 05 Sep 2008 03:13:00 +0000

Do you need some extra cash? You may be entitled to some, but never knew it. There is such a thing as free money, well it’s not free, but it feels like it’s free because you never knew it was there waiting for you to claim it. Each state should have a bureau for unclaimed property, and many of them allow you to search by your name to see if you have unclaimed money to recover.

Here is the website for The Florida Bureau Of Unclaimed Property.

Warning: You’ll be addicted by this website. I’ve known about it for some time, but I just thought that I would pass it along to those of you that aren’t aware of it, yet. But be warned, you’ll be on the site for hours checking everyone’s name that you can think of. My wife’s step-father had two unclaimed property pieces!

I want to hear from those of you that found unclaimed property. How much was it? What was it from? It’s kind of like winning the mini-lottery, even though it was your money to begin with! Related Posts:

How To Find Free Money Today is a post from: Money Crashers

Who Is Your Favorite Charity?

Erik Folgate — Fri, 25 Jul 2008 12:24:53 +0000

Sometimes, I have a hard time thinking of a good charity to donate money. I know there are plenty good ones out there, but I also know there are plenty out there that don’t use the money the way that they should. I’m opening up the floor to you all to enlighten me with your favorite charities?

Money Lessons Learned From Our Founding Fathers

Erik Folgate — Wed, 20 Feb 2008 00:13:32 +0000

I meant to do this post yesterday during the designated President’s Day, but I didn’t get to it, so I thought I would share it with you a day late. I think one of the biggest tragedies of our modern culture is that we do not follow the guidance and wisdom laid out by the people that shaped this country into the greatest nation the world has ever seen. We are the hallmark for freedom and liberty. People flock here every year to have the opportunity to change their financial lives. We learn that George Washington and Abraham were great Presidents, but we seldom go beyond that. We seldom analyze their philosophy for the direction of the country. Here are some quotes from Washington and Lincoln that we can learn from about personal and financial development.

Lincoln: You cannot build character and courage by taking away a man’s initiative and independence.

This is extremely important when it comes to making sure that we never elect politicians that will pass legislature that hinders us from encouraging initiative and giving us independence. If you want to become wealthy, you must take the initiative to do it. Wealth will not just fall in your lap. You must set yourself up by taking the initiative of getting out of debt, investing in real estate and mutual funds for the long-term, and keeping a budget no matter what your income will be. For those people that become independent in the career field such as small business owners and self-employed professionals, the potential for you to become wealthy is very high, but the potential to lose a lot of money is high as well. I always encourage people to pursue their career dreams, and if working for yourself is one of those dreams, you CAN make it happen.

George Washington: Associate with men of good quality if you esteem your own reputation; for it is better to be alone than in bad company.

Washington knew that the people you associate with and learn from will directly affect the person that you become. If you want to win with money or be a successful business owner, you must surround yourself with people of high character that are smarter than you. Find a mentor who’s a millionaire and ask them how they did it. Find a business owner whose business is thriving in the area. Suck all of the information you can out of them. Choose people you can trust to help you with your financial life such as quality attorneys, CPA’s, real estate agents, and stock brokers. Dave Ramsey has an Endorse Local Provider network to help you find quality professionals with the heart of a teacher, not the heart of getting their pockets fatter.

Washington: Let your heart feel for the afflictions and distress of everyone, and let your hand give in proportion to your purse.

Washington knew that at the core of every good, successful person, is a giving heart. You’ll never be successful with money if you don’t develop the heart of a giver. The cliche is true that the more you give, the more you’ll get back. Plus, it keeps you honest with your money and keeps you from worshiping it. Money can and will destroy your life if you let it. Developing the heart of a giver will help you to become wealthy, because it makes you a better person and makes you appreciate the money that you have

Washington and Lincoln were very wise men. If it weren’t for them, we may not have the freedoms that we enjoy each and every day. Learn from history, your elders, and your ancestors. You’ll find that it will improve your bottom line. .
Related Posts:

Money Lessons Learned From Our Founding Fathers is a post from: Money Crashers

The Low Down On Holiday Tipping

Erik Folgate — Fri, 21 Dec 2007 14:01:48 +0000

The season of Christmas brings generosity out in us that we may not have throughout the rest of the year. We usually tip based on a certain percentage like 10% to 20% to various people who work off of tips. But, something about the holidays makes uf throw out the rule book of tipping, and we even find ourselves wanting to tip those who might not usually think about tipping.

Check out this article on MSN Money for everything you need to know about tipping on the holidays.

Personally, I think that we should be more generous tips on the holidays, but you shouldn’t feel obligated to tip more. Go with your heart and instinct about how and who you want to tip. The article points out that you shouldn’t tip those that might be offended by it or those that would never expect to get a tip. A good example of this is your child’s teacher. They might feel uncomfortable taking cash from a parent. However, I do think it’s a nice gesture to tip your postal worker or garbage man. They perform a great service and get little recognition. If you didn’t want to give them a cash tip, you could always buy some gift cards to a restaurant and hand those out to people who might feel weird getting a cash tip.

Show your appreciation to those in the service industry, but make sure you aren’t crazy about it. Tip within your means, but give generously this holiday season. Related Posts:

The Low Down On Holiday Tipping is a post from: Money Crashers

How I Would Pay Forward $1,000 On The Holidays

Erik Folgate — Thu, 20 Dec 2007 03:31:40 +0000

The first thing that I would do with $1,000 to pay forward is I would find a homeless person, take them out for dinner to the restaurant of their choice. Then, I would take them and buy them nice outfit. Then, I would offer to drive them to the nearest shelter or rehabilitation center. Are there any rehab centers for homeless people these days? I know that many of them are mentally handicapped, but some of them just need a second chance and someone to motivate them to pick up their life again.

Whatever was left with the money, I would find a single mother in my church and give her an anonymous gift card to Target or Wal-mart so she can buy gifts for her children. I urge you to think of those without shelter and those single mothers out there who bust it every day to put food on the table for their children.

I don’t think there’s any right or wrong way to handle paying forward $1,000. You can do a lot with that amount of money, and you could ultimately turn someone’s life around if used the right way. I would strive to target two or three people rather than just giving it to a big charity. The concept of “paying it forward” is an interesting ideal. It was made most popular with the movie, “Pay It Forward” with Nicholson and Hunt. The funny thing is that we rarely think about giving back to others when we have been given something. When a good deed is done for us or we are given a gracious gift, we usually feel humbled and inspired by the gesture, but it’s not programmed in us to go and pay back the favor to someone else. In fact, I think we’re more inclined to want to pay back the favor to the giver. We feel humbled if someone gets us a gift for Christmas, but we did not get them something. Immediately, we think that we should go out and buy them something. That is not the essence of giving. If you did not have the thought of giving to that person in the first place, it makes it no better to give back just because they gave to you.

There’s something to think about for this holiday season. Related Posts:

How I Would Pay Forward $1,000 On The Holidays is a post from: Money Crashers