Fifth Third Bank, headquartered in Cincinnati, has a program to help fifth graders get into the habit of becoming financially responsible. They learned how to budget, calculate interest and save for college.
If every young person in America learned those things, they might eventually end up turning Black Friday — and maybe the entire holiday season — into a more subdued, but responsible, time of year. Retailers might not be happy, but the nation would be better off in the long run.
In some circles, Friday is considered capitalism’s most important day of the year — an early indicator of whether the holiday season will be profitable, which in turn indicates the relative health of the American economy and whether its record long growth spurt might continue.
Weather may be a factor in much of the country this year, but a good start to the season would show that Americans still feel confident enough to spend money, even though that generally translates into money they don’t have.
And that latter point ought to be taken more seriously.
Lost in all the early morning jostling and the online browsing is the dismal state of debt in America. According to usdebtclock.org, credit card debt nationwide is approaching $1.1 trillion. That translates into an average of $6,687 for everyone who holds a credit card. Considering some people pay off their balances monthly, that average is likely much higher for those who let themselves fall into debt.
Americans like to rail on politicians in Washington for irresponsible spending. Indeed, the annual federal deficit is now more than $1 trillion, and the national debt has topped $23 trillion — a serious liability that doesn’t get nearly enough attention. But the American people, taken as a whole, aren’t any less irresponsible.
When the economy eventually falls into a recession, both the federal government and many individuals will find themselves in a terrible fix, resulting in the loss of jobs, homes, cars and other material possessions.
We admit this is an awfully negative view of things for the start of what should be a joyous Christmas season. That’s why we will end this by noting that personal finances, in keeping with the lessons of the Christmas story, are not beyond redemption. Getting the season off on the right note is a personal choice, and it doesn’t have to limit the fun of the season.
We recommend starting today with a written budget. Know how much you can safely spend without exceeding your income. If you plan to use credit cards to buy Christmas presents, know how much you can safely pay off at once when the bill comes due.
This is called the Information Age for a reason. Most people today have plenty of tools on hand for comparing prices and finding the best deals. Don’t automatically buy into a retailer’s claims that a deal is the best one out there. Spend time searching.
Don’t shop on impulse. Have a list ready and stick to it. Some people are difficult to buy for, but you should at least have a general category in mind, and a price range, before starting.
Then, check and recheck your expenses, so you know you’re not overspending.
The result may not be as lavish a Christmas as some might like, but it will be a happier one. The lack of excessive money worries also would help you focus more on the true meaning of the holiday, and on time well-spent with family.
It might also make you feel as least as smart as a fifth grader who is learning to be financially responsible.