This Week in Your Wallet: December 18, 2012
Before we start this week, I just want to express that my thoughts and condolences continue to be with the people of Newtown, CT. Like the rest of the country, I am horrified by this tragedy and I can’t seem to take my mind off the suffering of this town, the parents and the family members of the victims. If you’re looking for a way to help as I was, USA Today published a helpful round up of options yesterday.
Well, we’re down to the final days of the 2012 holiday season. Hanukkah ended on Sunday night, Christmas is in one week and Kwanzaa begins the day after that. Over the past couple weeks, I’ve given you tips to use as you prepare for your gift exchanges: smart shopping strategies, how to avoid holiday debt and how to maximize your holiday giving. This week, I wanted to focus on some information that might come in handy during and after these gift exchanges: how to make the most of what you’ve gotten.
In some cases, you might get a gift you don’t really want. In others, you might get so many gift cards that you don’t know what to do with them all. I compiled some notes for the TODAY show on this very topic, and I wanted to share my thoughts with you.
If you have gifts you want to return, you have to do a few things:
- Keep labels, packaging in tact. If you tear open, say, a clamshell on an electronic, you may have trouble returning it. With electronics you may also be assessed a restocking fee.
- Read the policy. Go online and read a store’s return policy to get a sense of how much time you have to act. Generally, faster is better.
And if you get more gift cards than you know what to do with?
- Register your gift card. You can typically do this for bankcard gift (Visa, Amex, etc.) cards, as well as some big merchants. That way, if it’s stolen or you lose it, you can get it replaced.
- Use the Tango Card app for the iphone, which lets you enter in your gift cards, pins, etc. – then retailers can often just scan the card when you’re ready to use it. The app will even remind you to spend the cards.
- Sell them. If you know you won’t use particular cards, sell them on PlasticJungle.com, CardHub.com or GiftCardGranny.com – where you’ll typically be able to sell at a value of about 80 percent, sometimes more. It depends on the card.
For more tips on what to do with your gifts after the holidays, be sure to tune into the TODAY show on Christmas morning, where I’ll be continuing this discussion. And now, here are the other headlines for the week:
Closing the Gender Wage Gap
I’ve written before about the gender wage gap, and what we as women can do to help close it. Thisweek, I wanted to share another article on the subject. It comes from the New York Times, and it has a very simple message: speak up!
I’ve told you before that negotiating is key (and that the magic words are “can you do better?”), but this article has a pithy strategy for negotiating your salary. It tells you to remember the three T’s: “tone, tactics and tips.” To expand on this, your tone should be positive but persuasive, your tactic should be to never name a salary figure first, and the best tips to remember are “anticipate objections” and “don’t get too personal.”
I like this strategy, and encourage you to use it — and if it helps, practice with a spouse or a friend before you try it with your employer. As the women quoted in the article found, the process can feel nerve-racking at first, but there’s a way to sell yourself without feeling like a car salesman.
Tax Traps with Loan Forgiveness?
When we talk about student debt, we sometimes talk about “income-based repayment” as an option for those who might have trouble meeting their monthly payments. This repayment program is an option for many federal loans, and works by using a formula to determine what you can afford to pay each month. The federal government then forgives your remaining balance after 10 to 25 years.
It sounds like a cushy deal, right? Well, according to Ron Lieber’s latest column, loan relief now could lead to a tax burden later. Why? Because the balance of loan that is forgiven can count as income — and, depending on this amount, could push you into a higher tax bracket. As one expert told Lieber, “Let’s say your debt has grown to $180,000 over 20 years, and by that point, you’re making $120,000. If $180,000 is being forgiven, then you’re looking at paying taxes on $300,000 in total income in one year. At that point, you’re over the $250,000 income category, my friend.”
Now, this isn’t to say that you — or your kids, or your grand kids — shouldn’t take advantage of income-based repayment plans if there is truly a need for the monthly relief. However, this does mean that you need to plan for the eventual tax hit that might come with this loan forgiveness.
Credit Card Debt Up
According to an article in Marketwatch, data from the Federal Reserve shows that there has been upward movement in credit card debt this year. The total amount of credit card debt stands at $857.6 billion, a $6.2 billion increase from 2011. This is still relatively low compared to the 2008 peak (a whopping $1.01 trillion), but TransUnion told Marketwatch it expects this amount to keep creeping up in 2013, and to approach 2009 levels.
I share this with you not to depress you, but as a means of reminding you to monitor your own debt, andyour own credit card habits. Have you started slipping into the bad habit of charging more than you can afford? Are you not paying your credit card in full at the end of every month? If not, make it your New Years resolution to get back on track! A couple months of bad habits like these are surmountable in the long run; spread out over the next couple years, however, could mean a serious financial problem.
Have a great week!
Jean
