Gails Blog

Gift cards have become incredibly popular. A whopping $1.2 billion in gift cards are sold every year. Since it is tacky to hand someone a twenty and say, “Buy yourself something nice,” a whole new culture of giving has sprung up around plastic that acts like a credit card (you can shop without touching any money) and looks like a credit card (kinda), but doesn’t wrack up debt.  And it’s been a boon people who just don’t know what to buy as a gift because everyone already seems to have EVERYTHING!

Personally I don’t like gift cards. First, they’re bad for the environment. Second, they distance us from our money (yet again) so we put less thought into our purchases. Third, they’re hard to use. Redemption always seems like such a chore for the check-out person. And fourth, they’re a rip off!

I don’t think I need elaborate on my first point. They’re plastic. They’re often one-use. And they’re multiplying by the millions. And where do they all go when they’re redeemed?

If you have a $20 bill that you could spend on anything, you’re more likely to do a better job of shopping than if you have a $20 gift card that you can only spend in a particular retail environment. Yah, those soaps are nice, I guess, and I have a gift card, so I might as well. Hmmm.

I recently redeemed a bunch of shopping points for gift cards, and that’s opened my eyes to the monsters these little pieces of plastic really are. If you try to use more than one card (and this goes for coupons too) at a time, it’s like you’re committing some major shopping faux pax. The line gets longer as your cashier rolls her eyes at you, and you wonder, “Why am I doing this?” That may be one of the reasons why up to $180 million is lost from people failing to use their gift cards.

In 2006, Best Buy revealed that a boon of $43 million existed on the books from gift cards that would likely not be redeemed. Wow! That’s $43 million dollars in MONEY for NOTHING but a piece of plastic.

Now we come to my 4th point: what a rip-off they are. So, I go into a drugstore to use their gift card and I’m told they can only give up to $2 in change from the card. So while the card is “as good as money”, you can’t convert it back to money, not even in the form of change. You can keep a balance on the card. And up until recently, you had to use the card before it expired or you’d lose that balance. Retailers were even subtracting money from the amount on the card if the card sat dormant for a length of time. Really!

Happily, some provinces are bringing in legislation that says NO MORE EXPIRY DATES or other fees that erode the value of the card. But no legislation will protect you from a company that issues a gift card and then goes bust, leaving you holding the plastic. When U.S. retailer Sharper Image went into bankruptcy, it refused to accept it’s own gift cards.

U.S. credit card companies are getting into the gift card business in a big way. These cards can be used just about anywhere, but usually come with significant fees and restriction. Card issuers also give themselves the right to change the rules however they want, whenever they want. The terms and conditions for the American Express Gift Card indicates they don’t even have to give you notice of changes.

As far as I’m concerned, gift cards should go the way of the dinosaurs. If someone wants to give me a gift, I want some thought to go into it. If there’s not a lot of money available, I don’t care. I truly do believe it’s the thought that counts. So the only gift cards or coupons I’m willing to accept are those drawn with crayons or markers and liberally sprinkled with glitter!

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Despite the way I dress on TV, I’m not a clothes horse, and some people’s obsession with handbags, shoes, shirts, skirts, blouses, jackets, watches… well, I could go on forever…  seems weird to me. I’ve been in homes where there are hundreds of pairs of shoes, dozens and dozens of pairs of jeans, and cupboards and drawers full of clothes, along with loads of debt. I scratch my head. What drives us to collect all this STUFF when a) we’re in debt and b) we just can’t afford it?

According to the Stats Man, in 2002 Canadians spent $21.5 billion dollars on clothing and accessories. Women’s clothing made up about half of that spending, men’s made up about 29% and the rest was on kids’ clothing.

So, just how many pairs of shoes can we wear? Do you really need 40 T-shirts? And how can a handbag priced at $600 ever be a good idea, particularly if you’ve got ANY debt?

Clothing, it seems, has a lot to do with how we see ourselves and others. Many people use clothing as an opportunity to express themselves, and just as many use it as a means of judging others. If you’ve caught yourself looking at some fatty walking along in a too-tight t-shirt and cringing, or wondering why that woman would pair that lovely plaid skirt with that horrible polka-dotted ruffled blouse, you’re guilty.

Men and women are so weird about their clothing obsessions that they actually lie to each other about what they’ve paid. Sometimes they lie UP to impress. Sometimes they lie DOWN to appease. But the very fact that you feel you have to lie about what you spent on an item should indicate how twisted this all is.

I’ve listened and watched people almost get into battles over the question of whether to by cheap-and-often or quality-that-lasts. People get all uppity about their brands. And there are dopes who believe that dropping $400 on a pair of shoes, handbag, new jacket, is something they HAVE to do. There are people who’ve told me they HAD to buy it because they were “saving so much.” And there are people who, despite having several versions of an item already, have to acquire the next one anyway.

Now that the prices of food and gas are going through the stratosphere, it’ll be interesting to see if people are willing to cut back on their STUFF so they can keep eating. I’m not willing to take a bet on it since this aberrant shopping behaviour is totally unpredictable.

If you find that you’re guilty of having too much stuff, but you just don’t know where to start, it may be time to take inventory and make some choices. After all, you can’t possibly wear it all, and there is such a thing as “too much of a good thing.”

Empty your drawers, putting everything on your bed in a pile. If you have seasonal clothes, separate the seasons, and put the clothes you’re not wearing this season aside.

Of this season’s clothes, choose those you really love and actually wear on a regular basis.

If you have special occasion clothes, pick out the ones that are your favs.

Put the clothes you love back in your drawers leaving space around the clothes so you can get them out easily. If you’re stuffing your drawers, you still have too much stuff.

Now, do the same thing with your off-season clothes, putting the ones you’re planning to keep in a bin for the swap-over, and setting aside the stuff that’s just accumulated that you NEVER wear.

Ditto handbags, shoes, jewelry, hats, scarves, undies, PJs, and whatever else you’re hoarding. And, of course, there are all the clothes hanging in your closet. Yup. Them too.

You can do this exercise for your linen closet, your towels, your dishes, glasses, cups and mugs, DVDs, CDs, books.

Now, make yourself a promise that you’ll never impulse buy anything again. If there’s something you need, you’ll put it on a list. You’ll price it out, and write a target price beside it. Then you’ll buy it when you have the money to pay for it, and it has hit your target price. If you want to keep simplicity front and centre, add that you’ll get rid of something you no longer use every time your bring something new into your space.

As for what to do with the stuff you’re divesting: charities abound. If you have women’s and children’s clothes, consider your friends and family, then a women’s shelter. If it has value, sell it on Craig’s List. Put whatever you earn toward your debt. If you don’t have any – YEAH! – put it towards your next experiences.

It’s experiences that make us happy, not STUFF. Commit to having a great experience with a friend, your partner, your kids, and then give yourself something to look forward to that you can use to battle off the STUFF MONSTER the next time it rears its ugly mugg.

There’s nothing like a great back-to-school sale to get a person’s juices flowing. Shopaholic or not, the new school season brings out the crazed consumer in most. Clearly there are smart and not-so-smart ways to arm our kids with all the stuff they’ll need to face a new school term, but the distinction is not always clear. So here are some guidelines:

DO shop the sales. You can make your dollar go a lot further by gathering up the flyers and doing a little prep work. I buy my kids’ next season’s clothes at the end of the current season, usually at fifty to seventy percent off. Add up the cost of a snowsuit, boots, and the next-size school wardrobe and the savings are huge.

DON’T buy things you don’t really need no matter what a great price they’re going for. Going out of business sales and retail closures can tempt even the savviest shopper. Make a list before you go and stick to it. 

DO involve your kids in the experience. Giving them a budget to work with for school supplies or at least part of their clothing purchases will initiate them in the budgeting process. Help them to set priorities and to determine quality.

DON’T be unilateral, as in “You can’t buy that. It’s stupid.” Once you give your child the money you also have to ante up the responsibility or she won’t learn a thing. If she’s determined to make a bad purchase (in your opinion), let her. The consequences will teach the lesson. Just don’t stick your hand back in your wallet to rectify the situation when she sees the error of her ways. With responsibility should come accountability. Let her earn the money to rectify her problem.

DO hold off on shopping until you’ve done a complete inventory of what your child has and what he needs. If last year’s jacket still fits, that’s one less expense. And if you wait until he’s back in school to do the school-supplies run, you’ll end up getting what he needs, not what he thinks he needs.

DON’T forget about extra-curricular expenses such as sports equipment, music books, uniforms and the like. You’ll likely have to come up with extra money during those first few weeks of school to cover all sorts of activities, so hold some back when you’re off shopping.

DO stick to your guns about what you can afford to spend on your child’s clothes. Even if she has to have that jacket, you can say “No.” She won’t break. You could, of course, allow her to upgrade using her own money to make up the difference between what you’re prepared to spend and the brand she absolutely has to have

DON’T miss the opportunity to guide your kids. This is your job. Remember to keep talking about the cost in terms of what else that money could buy, as in “Sam, I know you really want those jeans, but you also wanted to save for your ski lessons. Which one’s more important to you in the long run?”

DO show your children your budget so they have realistic expectations. Many parents hate to talk about money with their kids. And they’re dead set against disclosing the realities of their financial circumstances. Then they get ticked when their children don’t show sufficient appreciation for how hard they have had to work to provide those no-name jeans. Well, if you don’t tell ‘em, how are they supposed to know? Being smart about money isn’t intuitive. It’s learned. And you are your children’s most influential teachers… of both good habits and bad.

DON’T burden your kids with the horrors of your financial mistakes. If this seems to be a contradiction of what I just said, it’s because there’s a fine line between being up-front and truthful with children, and burying them in reality. Kids deserve to feel safe. Telling them you haven’t got the money to buy groceries doesn’t add to their sense of security. What you want is to create a sense of reality for your children, not to worry them to death.

In my humble (yah!) opinion, The I-Work-Hard-So-I-Deserve-It Gremlin is, perhaps, the hardest to combat. Having slaved away in the mines all day, we feel entitled to a pint with the boys, that new pair of shoes, or dinner out. We need a glass of wine to relax. We need a vacation. We need a new car.

Nothing brings this home faster than when I see people lined up to exchange their money for the latest techno-gadget. I can’t believe that people are so rabid to spend their money that they’ll get in a loooooong line, get rained or snowed on, sleep on the sidewalk just the be able to say they had it first. (Really? First?

Many of the couples I work with demonstrate that they’re walking around with the I-Work-Hard-So-I-Deserve-It Gremlin in tow. They’re willing to exchange their future incomes (yeah, that’s what credit is, people) for STUFF they deserve to have. I’ve had people tell me, “We work really hard, we deserve a vacation.” I’ve had people tell me, “I have a great job, I deserve to drive a nice car.” And I’ve had people tell me, “I do twelve-hour shifts, I deserve dinner out.”

Hey, for all the people who want to drop $700 on the latest cell phone who HAVE THE MONEY IN THE BANK, I don’t have a thing to say to you. It’s your money; spend it any way you wish. But for the dopes who are planning to put that new phone on credit and then carry the balance around for a few years at some ridiculous interest rate (any interest rate), give your head a shake.

The thing about the I-Work-Hard-So-I-Deserve-It Gremlin is that it can trick you into pledging many years of future income for the pleasures you’re seeking today. It doesn’t care how much interest you’re going to have to pay, how much more expensive that Have-to-Have-It item will be when you tack on the interest, or how long it’ll take you to get out of debt. And it doesn’t care that what else may end up losing if your circumstances change and you find you can’t pay for that holiday you deserved.

Advertisers know that people love to take a stroll down Luxury Lane with the I-Work-Hard-So-I-Deserve-It Gremlin. They put it in their clients’ slogans, sing it to you, show you people just like you who are buying what you will come to feel you, too, deserve.

Nowhere has the I-Work-Hard-So-I-Deserve-It Gremlin done more damage than in the arena of home-ownership. We have come to believe we deserve to own our own homes. Never mind that we haven’t had the commitment, the discipline, or the foresight to save a downpayment. Lenders have played into this delusion by offering borrowers far more credit than they should have access to. So there are people who have bought homes they can barely afford. Sadly, when the time comes to renew the mortgage, even a small upward movement in interest rates will make payments unmanageable.

The current foreclosure mess in the U.S. is the fallout of hanging out with the I-Work-Hard-So-I-Deserve-It Gremlin.  Re-framed as a “right”, the American dream of homeownership was assumed by too many people who never considered the true costs and sacrifices required to make the dream a reality. And so now the dreams have been shattered and families are finding themselves out in the cold, literally.

I see a lot of people struggling to repay debt for things they felt they deserved. In 2006, almost 100,000 Canadians had to file a creditor proposal or declare bankruptcy because they lost the struggle. In the U.S., 618,000 people filed for bankruptcy. I’m willing to bet dogs to donuts none of those people felt they deserved it.

BTW: No blog tomorrow. We’re taking the kids to Stratford for some Romeo & Juliet and Hamlet. Back Monday. Have a great weekend. 

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He who dies with the most toys wins. This sentiment is usually attributed to men. I’m not sure why, but it applies to anybody who has been listening to the Having-More-Means-A-Better-Life Gremlin.

In our very consumer-focused, advertisement driven, marketing molded world, “better” has come to mean “more”. People think that their lives will be better if they can just figure out how to have more – more big screen TVs, more shoes, more money.

Ya know what, based on my experience, more STUFF doesn’t make us more HAPPY. Nope. In fact, I’ve seen an inverse relationship. It seems the more UNHAPPY we are, the more STUFF we need, as if it is a balm to soothe our sense of what’s missing.

If more made us happy, then lottery winners, people who inherited, and people with the highest income would be the happiest in our land. Not so. Studies have shown that those who suddenly come into “more” are often worse off five years later.

According to a study by Princeton economist Alan Krueger and Nobel Prize-winning psychologist Daniel Kahneman, “The belief that high income is associated with good mood is widespread but mostly illusory.

So why this obsession with accumulating STUFF? Why the drive to have the latest phone, the newest in fashion, the shiniest car? It may simply be that we’ve stopped measuring the richness of our lives by the things we take for granted, that other people would die for. Things like clean air, an abundance of water, healthy food, good health, the availability of education, meaningful work, and freedom of religion and speech, to name just the most obvious.

When Barbara Walters interviewed billionaire David Geffen and asked, ‘O.K., David, now that you’re a billionaire, are you happy?’ his response was ‘Barbara, anybody who believes money makes you happy doesn’t have money.’

Bill McKibben’s recent book Deep Economy: The Wealth of Community and a Durable Future explores the idea that the foundation of our economic assumptions must be re-evaluated and re-tooled. While our civilization has conditioned us to believe that more is better, it ain’t so. However, many of us are willing to go deeper into debt every day to prove how well we’re doing.

We have substituted consumerism for what people really want: love and community, a sense of belonging, worthwhile effort, happiness. The work of overcoming our rampant consumer addiction can only be done inside ourselves. Nobody else can fix this for us. We need, individually, to fix it for ourselves.

How?

Move from being Impulsive to Thoughtful. Stop choosing short term gratification over our long-term benefits. Saving for retirement might be boring, but it’s going to be really important when you finally do stop working and are looking for a way to keep a roof over your head and food in your belly.

Stop Rationalizing. You can always find a “good reason” to scratch your acquisition itch. We are the masters of rationalization. We’re saving so much on an item, we just have to buy it. People take this to the extreme buying things they don’t need, don’t want, and can’t use, just because they’re focusing on how much they are saving. (Hey, if you’re spending you’re not saving.) Or we decide that buying “quality” is worth going into debt. Really? Or we focus on some extraneous issue: since I am fat, I need to spend more money on clothes so people won’t think I’m ashamed of my body. Hmmm. We apply this rationalization to why we need to buy a certain car, acquire a bigger house, or  wear brand names. It isn’t about meeting needs. It’s about the Having-More-Means-A-Better-Life Gremlin weaving its magic spell.

Undo Your Illusions. People confuse the medium for happiness with the actual results, the most famous example being money. Even though money itself doesn’t make people happier, we continue to work harder to get more money. More is better. But it isn’t. Sometimes more is just more.

Alan Krueger and Daniel Kahneman study found a weaker-than-expected correlation between income and happiness. Looking at a Bureau of Labor Statistics survey on how people with various levels of income spend their time, they discovered that women who make over $100,000 a year spend 19.6% of their time having fun, while those who make less than $20,000, spend 33.5% of their time kicking back or socializing.

The Having-More-Means-A-Better-Life Gremlin is misleading us to work for more money even when happier pursuits would ultimately do us more good.

How are you going to conquer the Having-More-Means-A-Better-Life Gremlin? Books, websites, gurus on “simplification” abound, and the message is trickling down slowly. Very slowly. And perhaps now that we’re having to spend significantly more of our income on NEEDS — fuel for our cars, fuel for our bodies — we’ll move back to focusing on what’s really important, and not on the STUFF. 

Tomorrow’s Gremlin: The I-Work-Hard-So-I-Deserve-It Gremlin

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I’ve just finished working with a couple that I LOVED! Sweet, enthusiastic, bent. So much room for improvement. The first thing I noticed when I Dropped My Bag And Had A Quick Look Around was that there wasn’t a corner of the house that didn’t have a doodad of some sort in it. I asked if this was part of her culture – if she was recreating the home she’d grown up in. Noooo. That wasn’t it. She was just a Stuff Gatherer. I pointed out that there wasn’t a corner of the house that didn’t have a little table with stuff on it, candles, or some other doohickey. She didn’t see what I saw.

Later I went into the main floor bathroom and, as I was having a pee, I noticed that in front of me, in the corner, was a set of candles – tall – just standing there in a threesome. How strange, I thought. When I glanced under the sink, there in the corner was a picture, leaning up against the wall, UNDER THE SINK. I brought my Tchotchke Queen into the bathroom. She gasped. She’d never noticed that she was filling her corners with STUFF.

Three gremlins were at work in this house. And I’m sure they inhabit many homes, so I’m sending you around your house to look for them and evict them. I’m going to deal with them one at a time so you have some time to come to terms with these gremlins if they are at work in your psyche.

First up, the I’m-the-Shopper Gremlin, which was always whispering in Lucy’s ear. Since she was responsible for keeping her house beautiful, keeping her children beautiful, keeping her husband beautiful, she was always shopping. She loved a good bargain and made a habit of hitting the Everything-60%-Off-Everyday Store every chance she got, which was usually EVERY DAY during lunch hour since there was a store right across the street from work. And she hardly ever went in without buying something. New hand towels, a shirt for her husband, clothes for her kids, a beautiful set of glasses, another picture, yet one more candle… Her family had made her responsible for the acquisition of what they needed and she was taking her role as BUYER very seriously.

Problem is, the I’m-the-Shopper Gremlin has no clue about the difference between a NEED and a WANT. It just wants to SHOP. And so, with this gremlin whispering soothing messages of love, caring and responsibility in her ear Lucy shopped.

The first thing I needed to do was bring her to her senses on what was a NEED versus what was a WANT. With some help, she had to go through rooms of her home and take out the “wants”, piling them up for me to see. More importantly, she was piling them up so she could see the crap she’d gone into debt for. What a success! Worked like a sledgehammer. So there was Lucy, surrounded by her stuff, wondering how the hell she could have been so unconscious in her shopping.

Lucy isn’t alone. There are loads of people who do this. But Lucy got the message. As I was showing off my new, snappy shoes (pink, green and yellow high-heeled sandals which I picked up for $16), she quipped, “Were they a need or a want, Gail.” Ha!

So how do you get a handle on the I’m-the-Shopper Gremlin?

Some people decide they will only shop one day of the week. You’ve seen me encourage fams to do this, since it takes away the temptation of the Impulse Buy.

Some people decide to shop with a list and only buy what’s on the list. If they see something they want, they add it to their next list.

Some people declare a moratorium on shopping, deciding to participate in Shop-Free days two or three or four days of the week. So they can’t buy ANYTHING on Shop-Free Saturday, for example.

Then there are the folks who challenge themselves to see how long they can go without buying anything. (Usually gas and food are the exceptions since they are virtually always NEEDS.) If they do shop, they have to start their counting again, and they’re always trying to beat their last best No Shopping Streak.

If you’ve got this gremlin running rampant through your life, what’s your plan to cope? Without a plan,  the I’m-the-Shopper Gremlin will not only end up costing you a lot of money, it’ll also end up making you spend way more time than you should have to DUSTING! ? Boo, hiss to the  I’m-the-Shopper Gremlin.

Up next, the Having-More-Means-A-Better-Life Gremlin.