Thirsty for Proper Perspective

Get Wise About Using Debit Cards and Online Banking

In 1997, a friend attempted to persuade me to get on board and join the revolution...the debit card revolution. No matter how much she explained what it was and how it worked...no matter how many times she tried to reassure me that it was not a credit card, I refused to jump on the bandwagon and go to my bank to sign up for one. I wanted nothing to do with a card that looked too much  like a credit card. I was sure that it was just as dangerous as a credit card, and I knew way too many people who were deeply in debt. I just didn't trust the plastic check card. I was convinced that having a debit card would be more trouble than it would be worth.

Fast forward to the present day and I have to admit that not only do I have and keep a debit card on me at all times, I have three of them! They're easy to get, convenient to use (gas station, anyone?), can sometimes be used for identification purposes, and make purchased items easier to track for people who don't keep up with their receipts. And who doesn't love the convenience of driving up to a teller machine to deposit cash or checks without having to fill out a deposit slip and wait for our turn with a bank teller?

For all of the benefits and conveniences debit cards provide, they have also been a source of many sleepless nights for account holders who have trusted them way too much...people who have failed to track their transactions, balance their accounts, and avoid accumulating overdraft fees. Last week, I took my own little poll and asked everyone I knew if they use checkbook registers or some other system to track their finances and balance their books. 98% of them said, "no". NO? NO! "What do you mean," I asked. Each of them gave me the same explanation:  they use online banking as their sole source of tracking and managing their finances. Can you believe that? I couldn't!

I asked each person how they account for outstanding transactions that haven't yet posted online. Some were convinced that they never have outstanding transactions, others relied on their memory, while others simply weren't sure. So, you probably won't be surprised when I tell you that 100% of them had overdrawn their bank accounts this year as a result of failing to keep up with their financial activities, 86% of them had overdrawn their accounts at least once within the past six months, and 54% of them have overdrawn their accounts within the past three months.

Can you imagine how much the banks have made by charging and collecting overdraft fees from these account holders who place all of their financial trust in online banking? Let's say 10 people fail to properly manage their accounts and each of them are charged two $35.00 overdraft fees in exchange for the same bank covering the costs of allowing all of their transactions to clear. The bank would earn a total of $700.00 in overdraft charges! That $700.00 could be charged and received by the bank for "insufficient funds" transactions that might cost them less than $50.00 in total to cover for those account holders.

For this very reason, I am encouraging more and more people to use their checkbook registers to record and manage their finances. No one cares more about your financial stability than you do so why not take responsibility for its success? If you hate the mundane, tedious job of writing down every financial action you take, spend a few dollars to purchase (and use) personal finance software (i.e., Microsoft Money, Quicken). You can also do a little research to find out if there are service companies in your area that can assist you in recording and managing your finances at a reasonable price. I provide such services for individuals and small businesses all the time. You'd be surprised by how affordable they can be (especially in comparison to regularly paying overdraft fees created by mismanagement). Besides, most people are better prepared and much more motivated to manage their own finances after approximately 3 months of personal finance training or services, and all of them feel better about having a financial reporting system that allows them to see how they're working their money and how their money is working for them.

Give, Receive...Reverse the Habit

On this What Do You Have to Give Wednesday, I'd like to ask you to focus on changing your normal habits. If you usually find yourself on the receiving end of someone else's generosity, take time today to figure out a way to reciprocate...give him or her something that clearly demonstrates your gratitude for the many gifts you have received from their hands and hearts. If you're privileged to have people in your life who love to buy things for you or do favors for you, that's wonderful. However, it's crucial for you to refrain from allowing that to define or control you. Purpose in your heart to be as charitable with your time and resources as necessary to maintain a proper perspective about the favor you have with family and friends.

If you are a person who is motivated to give and more comfortable when you're blessing others than with receiving gifts and favors from others, I challenge you to flip the script...open your hands and allow yourself to receive the gifts that I'm sure many of your loved ones have been waiting to shower on you. There's nothing wrong with prioritizing the spirit of giving above the desire to receive but it's important for all of us to know how to do both.

Think about it. We all need a healthy dose of give-and-take in our lives, especially during a season that has a tendency to leave us leaning too far on the "giving" fence or too far on the "receiving" fence. Why don't we balance this out by using this one day to discipline ourselves to change the norm and reverse our habit of giving or receiving by doing the exact opposite of what we're use to?

You can do it, and so can I. Let's get to it and come back to the blog to share our experiences.

The Right Person, The Wrong Gift Card

Have you ever given the right person the wrong gift card? Did you find out that your friend, co-worker, or loved one didn't like your plastic present? How did you handle the situation? Have you ever received what you deemed as a useless gift card from a wonderful person? What did you do? Did you let your "gifter" know that you dislike the restaurants listed on the gift card you received?

As I stated yesterday, this is a one of the seasons in which gift cards are purchased, given, and received more than at most other times of the year. Bosses give them to co-workers, friends exchange them, and family members give them to each other to save themselves from the hassle of shopping for a gift that requires more thought, time, and effort.

I would venture to guess that most gift card purchasers consider the likes, wants, needs, and spending habits of the people they are "gifting", however, more times than not, a few of their recipients have been somewhat disappointed (even if only secretly) with the company name and logo on the front of those gift cards. On the other hand, I have personally witnessed the "re-gifting" of gift cards from recipients who were less than pleased with the cards they received. Instead of allowing themselves to feel forced to buy items from a store they don't like or to eat at a restaurant they don't usually frequent, they simply give the cards away.

So, if you're planning to load money on a gift card for someone this holiday season and don't want to see it go to waste, be sure to consider who you're giving it to and how much money is appropriate to place on the card. For example, if you know that your cousin loves to shop at Target, don't give her a gift card to Walmart. If you're planning to give your nephew a gift card for use at a restaurant, load enough money on the card to at least cover the entire cost of his meal. For example, if the typical cost of a meal and drink at Outback is $20.00, don't give him a $5.00 gift card. If you do, it's possible that he may never use the card and is more likely to misplace it or forget about it.

Remember, giving gifts isn't about making ourselves look and feel good. The focus is to honor another person with a present that says, "I know you", "I was thinking about you", or "I love you". Before you load money on that card, invest some time and attention into getting to know the person you plan to give it to, or ask those who are closest to him or her which card would be best so that you can avoid giving the right person the wrong gift card. And if you just so happen to receive a gift card you're not too excited about, find a way to enjoy using it. I can't say that I'd be ready to do cartwheels if I were to receive a gift card from The Home Depot, but I tell you what...I'd go in there and find something to take home and appreciate as a gift from a thoughtful person who has spent his or her money on 'lil 'ole me.

Gift Cards vs. Prepaid Debit Cards

What You Need to Know

For a person who hates to shop or the person who is hard to shop for, money tends to be a gift favorite. Giving money as a gift saves the time, energy, and decision-making skills that buying tangible presents require. Each year, millions of gift cards and prepaid debit cards are purchased and distributed as a more sophisticated way of giving family, friends, and co-workers financial gifts.

Plastic presents can be used as the perfect way to be generous to people who typically mismanage cash or use it to feed unhealthy addictions. For example, a gift card to Target might be the perfect gift for your otherwise picky aunt who will give a cash gift away to her son who refuses to get a job. A prepaid Visa debit card could prove beneficial for the co-worker who drinks too much.

During this holiday season, many of you will give or receive at least one such card as a Christmas gift so today I'd like to offer a little insight into purchasing and using gift cards and prepaid debit cards. Before you purchase gift cards or prepaid debit cards, make sure you understand what your money is buying.

The Similarities:

• They are prepaid cards that allow you to determine the amount of the gift, although some are predetermined (i.e., $25.00, $50.00).
• They are accepted at millions of locations, including online (check the back of the card for more information).
• Some are activated at the time of use while others require you to activate them via a phone call or online registration.
• Each time you make a purchase, the amount is automatically deducted from your available balance.
• Not all receipts will include your balance, but you can check them online (see the back of the card).
• Keep the card even after it has a zero balance because it will be needed if you return items purchased using it.

The Differences:

• Gift cards are typically non-reloadable (although some merchants are changing that). Once the balance is zero, no more money can be added to it. Prepaid debit cards are reloadable.
• Gift cards are accepted at very specific locations (i.e., Red Lobster, Lowe's), whereas prepaid debit cards are accepted at a variety of businesses.
• Most gift cards work in the same way as credit cards; instead of providing a pin number, your signature is provided in order to complete transactions. Prepaid debit cards come with pin numbers or can be used like a credit card, allowing you to use your signature at the time of purchases.
• There are usually no fees associated with purchasing and/or using gift cards, however, prepaid debit cards may charge activation fees, monthly maintenance fees, ATM fees, balance inquiry fees, purchase fees, and even inactivity fees.
• If you make a purchase that is more than the gift card balance, the transaction may be denied until the difference is paid in cash first unless you notify the cashier in advance. Prepaid debit card purchases that are more than your remaining balance will incur overdraft fee.
• Gift cards are typically meant to be used short-term for purchases while prepaid debit cards are meant for long-term use.   
• Purchasing gift cards requires no personal information; purchasing prepaid debit cards will require identifying information (i.e., name, address, birthdate). 

So, before you purchase or use a gift card or prepaid debit card, keep in mind what you've learned today and make the most of these plastic presents. Don't give them as gifts to people who don't like them, won't use them, or have a tendency to forget they have them. Most of all, remember that gift cards and prepaid debit cards aren't the same as cash and are only as useful to recipients as the merchant and amount on them.

Free to Spend, Free to Save

Okay, this week's blogging is coming to an end and we've covered a few touchy subjects. From discussing the wisdom in creating a spending plan to rediscovering and prioritizing the true meaning of Christmas, we've considered the ins and outs of the holidays. So, as we close out this school and work week, I'd like to encourage you to approach your spending (whether for Christmas or not), with a clear objective:  to maintain your freedom. If you have money to spend, spend it with a purpose. Be sure to take advantage of sales, deals, discounts, and coupons that will allow you to spend and save at the same time. 

Last week, I visited Kohl's department store where I shopped for clearance items, received an additional 15% off of my purchases at the register, and then earned $30.00 worth of Kohl's cash that I was told I could use on purchases I make this week or next week. As soon as I earned the Kohl's cash, I gave it a purpose. I knew exactly what I was going to use it to buy.

The prison ministry at my home church participates in the Angel Tree program. It is a program that provides much needed clothing, shoes, and even toys for the children of incarcerated parents. I knew immediately that I would get great use out of it for donations to someone's precious little girl. Long story short, I used the Kohl's cash to purchase $131.00 worth of clearance items for $27.00!

I killed two birds with one stone. I added value to someone else without taking value away from my own family (and still have $3.00 worth of Kohl's cash left). In other words, I freely spent and saved money at the same time! Prayerfully, you will choose to do the same.

Thirsty for Simplicity

If you were to ever show up to my house on Christmas Eve, you'd find that the area under the Christmas tree which is usually reserved for wrapped gifts is pretty bare (if not completely). Aside from the few gifts our sons receive from loved ones who insist on doing so, the tree trunk stands alone. However, if you were to take a glance at our six Christmas stockings hanging from the mantle, you'd quickly recognize where most of our time and attention is spent. Each stocking is plush and full to the brim with letters, poetry, and plenty of artwork. It's the little things in those stockings that fills our hearts and lives for the day.

I've said it before and I'll say it again:  I have no qualms with people buying and exchanging Christmas gifts. I appreciate the idea of focusing time and finances to prioritize others, and I definitely admire all of the charitable efforts that effectively help those who are less fortunate at the end of the year. Still, I long for the day when we can embrace the holidays with more focus on faith in God and simple acts of kindness, rather than on what we wish we had to give others, what we plan to buy for them, or what we resent not receiving from the people we love.

There's nothing I hate more during the Christmas season than to see faces full of anguish and voices cracking with embarrassment as mothers, fathers, sisters, and brothers express their disappointment for not having enough spending money to buy Christmas gifts. Can't we all just get back to simpler times, when Christmas meant so much more than opening gifts and comparing presents?

I pray for the day when gift exchanges take a back seat to expressions of faith, family, and fellowship during the Christmas season. I have complete confidence and hope that my prayer will one day become an answered reality. In the meantime, I will remain thirsty for simplicity.

Give God a Grateful Heart

How are those Christmas spending plans coming along? Have you narrowed down your list to specific people with specific amounts to spend on each, and an established shopping schedule?

While we're taking this week to approach the holidays with a plan, I'd also like to encourage you to be creative and innovative with your gift-giving this year. If you've decided to give gifts to your family and friends, consider giving them something money can't buy. Here are a few suggestions:

• offer to babysit overnight for that special couple or single parent who could use the time off
• write letters, poems, or simple "thank you" notes to place in family members' stockings
• help someone to accomplish a long awaited goal (i.e., clean windows, bathe pets, workout)
• set aside a day to spend quality time with someone you haven't seen in a while
• compliment a stranger or co-worker
• give away an unused possession to someone who could really use it

Most of all, bless those you love by being grateful to God for who He is, what He's done, who you are, and all you have because He lives! Gratefulness is contagious and it makes others curious about your peace. Your gratitude will beget gratitude. Your peace will inspire peacefulness in others. Ultimately, your glad heart will make God's heart glad too!