Blog

Comments Off on The Holiday Season Scam

The Holiday Season Scam

Yes, the holiday season is once again upon us. Christmas regalia is being showcased in shop windows & everywhere you turn, there are sales galore. Black Friday — the supposed official start to the holiday shopping season — is starting earlier and earlier. While there may be good deals out there, here’s the real truth of it:

IT’S ALL A SCAM.

Let me say that again: it’s ALL a scam. The holiday season is the largest scam to be forced upon the American public. It is a scam that we have taken to countries all around the world and handed off this consumer-driven tradition. Why am I calling it a scam? I’m so glad you asked! Let’s break this down for a moment.

Over the last 50+ years, the dynamic of popular American culture changed from the idea of conservation to that of consumption. That subtle but important shift has transformed the American landscape forever; our spending habits — all of us — are shaped with the idea that more is better. Equally so, it is the reason that compared to our contemporaries, we have a very low personal savings rate here in the USA (see the stats at OECD), indicative of factors such as unemployment and consumer spending habits. It is also indicative of the desire for a certain lifestyle, the elusive American dream of wealth, luxury and home.

The real problem comes when big business gets into the mix and capitalizes on this mentality, making people believe they should want or feel deserving of something even if they clearly cannot afford it. I don’t know how many times I’ve seen people living in the hood, in the throes of low-income living, and they drive Escalades and own iPads. What is wrong with this picture? We have truly lost all sense of what living within our means actually means.

Listen, don’t believe the government when they say X tax cut is going to help bolster the economy. That’s HOGWASH. Here’s what really happens… The government passes a tax cut bill, which returns money to the American public via their tax returns. There are one of 4 options for that person receiving the refund to do: spend it, save it, invest it or use it to pay down existing debt.

Spending it returns the money to the corporations and business who may or many not decide to use the profits funded by your purchase power to create jobs and invest in the community. It’s completely at their discretion. In these times, do you really see businesses going out and creating jobs? They are profit-taking and in record numbers. If you believe that spending your money to help drive a resurgency in the economy, you are sadly mistaken and deluded by the blatant lies our politicians spew. We need a return to spending only when you absolutely need something, not the frivilous spending activities that many of us engage in. Do you REALLY need that $899 iPad or that $1100 1080p Smart HDTV? Do you need $1000 Louboutin shoes? I think not.

Saving it is a sensible option. There is a concern with this one too. You don’t want to save money in banking institutions that will charge you fees as you save. You want to save in fee-free environments that will give you a decent savings rate (which is very low anyway because of the already low Federal rates). You are SAVING — don’t give money away for free!

[alert-info]
Learn about saving smarter at SmartyPig: www.smartypig.com
[/alert-info]

Investing is always a good option, but this requires learning about the game. Educate yourself about the various ways in which to invest your money and work with reputable companies that are accessible for information. The standard I stand by is invest in companies you believe in. You are less likely to get spooked to take your money out if things start getting a little hairy in the markets. Active investing is NOT for everyone, so have a clear understanding of your risk tolerance before jumping into the pool. Don’t forget that precious metals like gold and silver (not the ETF, but the REAL DEAL) are also considered tangible investments; they are a good alternative option.

[alert-info]
I’m a big fan of Sharebuilder and its associated company ING Direct: www.sharebuilder.com
[/alert-info]

Lastly, paying down your debt is the BEST favor you can do yourself. Why pay compounded interest month on month when you could use that valuable income elsewhere? Not to mention it is a great boost to your credit score, which helps you buy large ticket items at lower interest rates.

So look, the bottom line — don’t buy into the holiday hype. I have nothing wrong with buying presents for family and/or friends, just be smart about it. Don’t buy what you don’t need. If you were already bargain hunting for something you were planning on purchasing anyway, now is a good time to make that purchase when prices are cheaper.

We are living in lean times and frankly, none of us knows when the tides will turn to better economic times. It may never been as bountiful as it once was for the average citizen and that is a reality we have to face and accept. The only thing we can do now is prepare ourselves for this eventuality and make sure we are making choices that won’t haunt us in months or years to come.

Like buying that $700 fur coat… honestly. ~__~

** Disclaimer: I don’t write about anything I don’t personally believe in. Any and all suggestions are just that: suggestions. However, with regard to any financial advice, it is always important to consult a financial professional if you are uncertain about any course of action. Use common sense and figure out what works best for you and your financial situation.