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If you have been watching the news, or if you just come in contact with another living person, you know the holidays are going to be rough this year.  Many companies have gone bankrupt and/or closed over the past few months.  These companies include, but are not limited to the following:

• Linens N Things
• Steve & Barry’s
• The Bombay Company
• Sharper Image

All of these companies were fairly large, especially Linens N Things.  I am not all that surprised that Sharper Image is bankrupt, they sold nothing but useless junk (in my opinion anyway).  With these stores going under, their gift cards are (most of the time) worthless.  When you purchase a gift card you are essentially loaning the company money, making you a very small lender.  When the company goes under, you being the smallest lender, are paid absolutely last.  The majority of the time, this means you get nothing, nada, squat.

This being said, you should think twice about which stores you want to purchase gift cards from this holiday season.  Gift cards have been one of the most popular gift ideas for many years now, but this may begin to change.  I know personally, no one on my list is getting a gift card ever again.  I have a perfect example of what could happen to you.  My step-sister was married in May 2008.  She and her husband were registered at Linens N Things.  The day before their wedding, Linens N Things announced their bankruptcy and it was printed all over the local paper that the company’s gift cards were no longer valid.  Now, I forgot to ask her if they received any gift cards and if they were able to use them.  I will look into that.  The point of the story is that I was terrified for them.  Santino and I were getting married three months later and I knew if that had happened to me, I would have been devastated.  They could have ended up with hundreds of dollars of worthless gift cards.  Luckily, we were registered at Bed Bath & Beyond, which leads me to my next point.

If you are planning to purchase gift cards this holiday season, please, please, please purchase them from debt-free companies.  A debt-free company is a billion* times more likely to make it though this economic down-turn (*please note that this is not an actual figure, just my opinion).  There are many wonderful debt-free companies out there.

• Ann Taylor
• Gymboree
• American Eagle Outfitters
• Bed Bath & Beyond
• Panera Bread
• Apple

These are just a few of the hundreds of debt-free.  I was very excited to find out that American Eagle Outfitters is a debt-free company.  I have been shopping there for many years, since I was in the 7th grade.  I actually worked at Panera Bread in high school and had no idea that it was a debt-free company.

There are a few companies that have not gone belly up quite yet, but I would keep an eye on them.  I am sure everyone knows about K-Mart and Sears, they have been on the down turn for years.  One company that I didn’t know about, but it doesn’t surprise me that they are going under is Circuit City.  I did recently purchase a new laptop from them and I am sad to say that they had less than acceptable customer service, the computer was a good deal though.

I hope this makes you rethink your Christmas list.  I would definitely recommend you thinking twice when picking up a gift card this year, I know I am.  How do you feel about gift cards?  Do you plan on giving them this holiday season?

(Photo Credit, Above: Ange Soleil, Below: xoxreanna)

golden christmas by krisdecurtis on flickr

Where did the year go?  Well it’s that time of year again.  Fall is among us and, oh my gosh, Christmas is on December 25th again this year, gasp!

So many of us get caught up in our day-to-day life that we totally forget what month we are in.  It’s like you wake up one morning and it’s Thanksgiving, Christmas is only a month away.  Here are some numbers for your crunching:

• 69.5% of consumers will pay for Christmas gift with cash, check, or debit card (this is where I fall).
• 25.3% of consumers will use a credit card to finance Christmas (This makes no sense to me.  Why would you finance something they are going to hate anyway.  Why not bake them a pie, at least they would enjoy it!)
• 5.2% of consumers are unsure how they will pay for Christmas.  (This means they probably don’t have cash in the bank, or else they wouldn’t be unsure.  My guess, they will use credit.) (bnet.com)

While I must say, I am very impressed that almost 70% of Americans will pay cash this Christmas, what is up with the other 30%?  All I can say is that their cash using relatives need to buy them a copy of The Total Money Makeover by Dave Ramsey.  More on Dave later.

I will have to admit, while I did budget for Christmas last year, I feel I was unrealistic.  If I can recall, we only budgeted $300 for all gifts last year (yeah, crazy, I know).  Needless to say, we didn’t stay on budget.  Santino got a new XBox 360, which cost almost all of the $300.

This year, I was wise and started early.  While on our honeymoon in August I had plenty of time to relax and work on my favoritehobby, budgeting! (I know, I know, I’m a little sick.)  I decided that when we got home, we would start setting aside $150 a month for a Christmas budget.  If my math is correct, we will have approximately $700 by the time Christmas rolls around.  This should be more than enough to buy gifts for each other, plus select family members.  My goal is to have some left over to save for Santino’s new car, every penny counts.  How do you budget for Christmas?  What system works best for you?  How do you plan on saving money on gifts this Christmas?