Nathalie DionQ: I dont mean to be a Scrooge, but my family is out of control with gift-giving. How can I get them to cut back without crushing the holiday spirit?
A: You could take a page from what many of us do at work: Ask your family to toss names into a big bowl, set a price limit, and have each family member pull out a name and buy a present for the person they picked.
Or, see if you can agree to set a dollar limit on the price of each gifta $25 cap if you have a big family, for instance, or a cap as high as $50 if your family is small and there are fewer gifts to buy. If there are lots of kids in your extended family, you might also agree that youll buy only for the children.
One final suggestion: send holiday letters saying that in lieu of presents, youd prefer that family members make donations to a worthy charity.
So you want to spend less?
Stick with cash. A study from the University of Maryland and New York University found that people who pay in cash spend 20% less than those who use credit cards.
Next Page: Do gift cards expire? [ pagebreak ]
Q: Do all gift cards have an expiration date? If there is one, is there any way to extend it?
A: Most gift cards, whether theyre retailer-issued or general-use ones from companies like Visa or MasterCard, have an expiration date thats often less than a year from the purchase date. You can extend it by calling the issuer, but itll cost you; typically, $10 for another 12 months. But the use-by date isnt the only concernmany gift cards have added fees.
Those issued by banks often have a monthly dormancy fee of about $2 or $3 if you fail to use them, and some of the bank and store cards impose a service charge ranging from 50 cents to $3 for each use. When you factor that in, the card could end up being worth a lot less than you thought.
Theres good news, on the horizon, however. Starting in February 2010, thanks to credit card reform, gift cards will adhere to new rules. For starters, they cant expire in less than five years, and youll have at least 12 months to use a card before any fees kick in.
Q: What year-end tax moves should I make now to get a bigger refund in the spring?
A: One last-minute way to lower your taxes: contribute more money to a retirement plan, such as your employers 401(k) or a traditional IRA (up to $5,000 if youre 50 or younger; $6,000 if youre older than 50). What you contribute wont count as taxable income.
Also, make charitable donations and give clothing, electronics, and household goods you dont need to nonprofits before December 31 so you can write them off. (Be sure to get an itemized receipt.)
And if youre thinking of going green with your car or home, buy by year-end to take advantage of federal tax creditsup to $4,000 for buying a fuel-efficient vehicle and up to $1,500 for home improvements like better insulation. For more energy-related purchases that could qualify for tax breaks, log on to energy.gov/taxbreaks.htm.