For those of you here in the US, a belated Happy Thanksgiving. I hope your turkey was plump and your football team won! And for all the grandparents, I hope you were surrounded by loving grandchildren.

Like many folks, I remember when my family bought our first color television. Our entire family was glued to the new set, watching the Thanksgiving Day parades. Of course, at the end of each parade Santa Claus appeared – a vivid reminder that Christmas was right around the corner.

It's an exciting time of year for the whole family, but if you're the primary breadwinner, figuring out how to pay for all the Christmas cheer can be quite a challenge. That's why today seemed like a good opportunity to share my time-tested personal plan to help fund Christmas.

With CD and AAA bond interest rates below 2%, you have to look for yield wherever you can. In today's low-yield environment, an additional 1% – particularly from a safe investment – is substantial. Sometimes it's easy to overlook simple, commonsense options for improving yield.

You may be familiar with the old joke about the lady who comes home from shopping with several new outfits. She excitedly shows them off to her husband and exclaims, “I saved over $500!” Since the clothes were on sale, the bill would have been $500 more had she paid full price.

I've always had a couple of issues with that “logic.” First, when the bill comes due, somehow you still have to pay it. And second, why doesn't that logic apply to a new set of golf clubs or fishing gear?

Well, in today's society perhaps it can apply to everything you buy.

When I was young husband with three small children, paying for Christmas was a real challenge. We always had a bit too much Christmas spirit. After buying presents for my wife, children, parents, and various cousins, the bills would really mount up. For years I counted on our income-tax refund check to help pay off those Christmas bills.

My wife and I would charge our Christmas expenses, paying off a little each month. We'd file our taxes as quickly as possible, and when our refund check arrived from the IRS, we'd deposit it and immediately pay off our remaining Christmas bills. It was an expensive way of doing things, but it worked for us.

Gift-giving got a little easier as our children left the nest and our income rose, but that was only temporary. Christmas got very expensive once again when grandchildren – especially grandchildren who travel a long way to see us over the holidays – entered the picture. Even today, I try to find ways to save money for Christmas cheer.

The Yield that Keeps On Giving

In 1986, Discover Card entered the credit-card game. The company needed a plan to take market shares away from Visa and MasterCard, so it offered a 1% rebate on all purchases, which was unheard of at the time. In effect, the more you spent, the bigger your rebate.

But much like a tax refund, Discover really wasn't giving anyone anything. They were just returning some of their customers' hard-earned money. Nevertheless, it sure beats having them keep it all.

At that time, I was traveling 40-plus weeks a year for work. I put all my travel expenses on my Discover Card – airfare, hotels, and meals – and it worked like a charm. In early December, the company would send me a nice check, and it really did help with Christmas costs. It sure was nice to have money to pay for Christmas instead of charging gifts and paying exorbitantly high interest rates until our tax refund arrived (particularly since our little “dependent deductions” had grown up).

Since then, many credit cards have become much more aggressive with their rebate programs. A friend recently told me about CreditShout, a website that reviews and compares various credit-card reward programs. In addition to that resource, I'd also like to share a few tips my wife and I have learned along the way.

  • We Prefer Cash! There are rebates for airline mileage, trips, vacations, and a lot of other options. We will take the cash, thank you! We can use it to shop our own deals. If you use a particular airline credit card, your rebate can only be used to fly on their planes. Why restrict yourself? Cash is accepted everywhere.
  • Beware of “Teaser” Rates. Many credit cards offer teaser rates. For example, some offer 5% for 90 days or up to a certain credit limit. Once the time period has elapsed, you revert back to their standard rate. If you have time to keep track of this and want to end up with 15-20 credit cards in your wallet, it could work out fine. The few times we have tried to take advantage of those offers, it never seemed to work out as we had hoped.
  • Use Specific Credit Cards for Specific Purchases. At the moment we actually have two American Express cards: one returns 3% on groceries and 2% on gas; the other – a Costco American Express – returns 3% on gas and restaurants. We buy our gas at Costco as much as possible, at an already discounted price, and still get another 3% back at year's end.

    The best news is the 3% on gas and groceries applies no matter where we buy them. While 3% may not sound like much, if gas is $4.00 a gallon, it's a $0.12-cents-per-gallon discount off the pump price. Sounds a bit more appealing now, doesn't it? If things get confusing, label each credit card with a magic marker.

  • You Don't Have to Give Away the Keys to the Vault. I have never been comfortable paying our regular bills by having the vendor debit our checking account. I prefer a little more of a buffer. Nevertheless, many companies are happy to charge your credit card monthly; Verizon is a good example.

    We put as many of our regular bills as possible on a credit card; it's convenient, and since we were going to spend the money anyway, we may as well earn the rebates. Also, when we had genuine disputes, the credit-card company was generally more than willing to help us. For every $10,000 in normal bills we put on our credit cards, the 1% rebate is $100. That same $10,000 spent on gas and groceries can earn $300 with the right card.

  • Charge Your Insurance Premiums. Take a look at all of your insurance premiums. Our auto and homeowner policies allow us to pay by credit card, and they charge us monthly at no additional cost. That's eliminated the need to write a big check once every six months. The more necessary and recurring expenses you can charge, the more you get back in the form of a rebate.
  • Read the Small Print. You have to read the small print to avoid unnecessary fees. For example, we never take cash advances, and we always pay off our credit cards promptly. The interest rates they charge are horrendous! I'm sure nearly all of you have learned that lesson over the years.

My mother-in-law had to be one of the greatest coupon clippers on the face of the earth. I once told her that I hoped the local funeral home didn't have a coupon, because she might want to expire before the coupon did. The acorn does not fall far from the tree, and my wife frequently comes home from the store and proudly announces how much her coupons saved us. I just grin. Now I realize that playing the credit-card rebate game is not a whole lot different.

Things are expensive enough these days, so why not save every chance you can? Nevertheless, keep in mind that you aren’t saving money if you use reward-earning credit cards to buy goods or services that you otherwise wouldn’t.

We get rebates of 1%, 2%, and 3%, depending on what we're buying.

Overall, last year our rebates were close to 1.5% of our total expenditures. That's identical to the going rate for a five-year CD, but with an upside. The interest on the CD is taxable; your credit-card rebate is not. They're only giving you back what was yours.

I always make sure my wife sees the rebate checks at the end of the year so I can show her how much money we saved through my diligent credit-card research. Those checks help pay for our Christmas spirit, and they come in pretty handy.

On the Lighter Side

My wife and I were in Fort Myers, FL for Thanksgiving, along with my ex-wife Sonja, our son Drew, his wife Claire, and two of our grandchildren, Jake and Sarah. It was kind of a practice run for the 16 family members, including all our grandchildren and our great grandson, at Christmas.

In keeping with the holiday spirit, I want to pass along something from my good friend, Dennis Alf, about the fun of having grandchildren. He are some of his classics:

NUDITY: I was driving with my three young grandchildren one warm summer evening when a woman in the convertible ahead of us stood up and waved. She was stark naked! As I reeled from the shock, I heard the five-year-old shout from the back seat, “Grandma, that lady isn't wearing a seat belt!”

POLICE: While taking a routine vandalism report at an elementary school, I was interrupted by a little girl about six years old. Looking up and down at my uniform, she asked, “Are you a cop?”

“Yes,” I answered and continued writing the report.

“My mother said if I ever needed help I should ask the police. Is that right?”

“Yes, that's right,” I told her.

“Well, then,” she said as she extended her foot toward me, “would you please tie my shoe?”

POLICE DOG: It was the end of the day when I parked my police van in front of the station. As I gathered my equipment, my K-9 partner, Josh, was barking, and I saw a little boy staring in at me. “Is that a dog you got back there?” he asked. “It sure is,” I replied.

Puzzled, the boy looked at me and then towards the back of the van. Finally he said, “What'd he do?”

THE ELDERLY: While working for an organization that delivers lunches to elderly shut-ins, I used to take my four-year-old granddaughter on my afternoon rounds. She was unfailingly intrigued by the various appliances of old age, particularly the canes, walkers, and wheelchairs. One day I found her staring at a pair of false teeth soaking in a glass. As I braced myself for the inevitable barrage of questions, she merely turned and whispered, “The tooth fairy will never believe this!”

Until next week…