Do you want to avoid going into debt shopping for Christmas gifts? Consider choosing layaway, a budget-conscious way to pay for things that started in the Great Depression.
Sears is bringing back its layaway program two decades after it was scrapped. Sears Holdings, owner of Kmart stores, has seen a strong response to the pay-as-you-go plan at its Kmart locations.
Several stores with whom I have spoken have reportedly doubled holding capacity for layaway items. Here is how it works.
Layaway: If you pay $1,000 for a bunch of Christmas gifts on layaway, you will have to put 25 percent down. You can make weekly payments and pay the balance when you pick up the merchandise for Christmas. Some stores require a $5 service charge. Total bill $1,005.
Credit card: If you buy $1,000 worth of items on your credit card and wait six months before paying it off, your total bill will be $1,100 at 20 percent interest rate. If you wait a year to pay off the credit card, and you are late with your payments, you may pay a total of $300 in interest, fees and late penalties. Now your $1,000 purchase costs you $1,300,
Christmas is only five weeks away. Every store policy is different, but essentially they require a down payment upon layaway and the balance due when you pick it up.
Say you want to buy a new washing machine before Christmas that costs $600, but you only have $150 to spend this week. You pick out the washer you want, put down a $150 deposit, and the store sets it aside for you. Then, you send regular payments each week or month until you have paid for the washer and you go pick it up.
.
Consumers in the 1930s, 1940s and 1950s would purchase items using layaway. However, when credit became more accessible, consumers would borrow the money instead of using layaway. Several stores quit the program.
Wal-Mart Stores got rid of its layaway program in 2006. Sam Walton added layaway in 1962 when he founded the company.
For the holidays or any large purchase, layaway is back. I hope you will consider using it.
Saturday, November 22, 2008
Friday, November 7, 2008
Credit Card Debt Forgiveness
I warn people about the pitfalls of using credit cards. We all know people who are drowning in credit card debt. Debt, which they will never be able to pay.
Now I am surprised to learn that to head off surging credit card defaults, banks and consumer groups are lobbying regulators to make it easier to forgive a portion of struggling consumers' credit card debt.
The proposal — and the unusual partnership by two groups typically at odds with each other — underscores the severity of the economic downturn, and the fear that credit cards could provide the next shock to the financial system.
USA Today reports that in 2008, delinquent credit card accounts hit a six-year high of 4.9%. Meanwhile, charge-offs — when banks give up on collecting debt — have been rising for about two years, hitting 5.47% in the second quarter, the latest data available, according to the Federal Reserve. Credit card and mortgage losses have dragged down banks' earnings.
Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others.
When you consider those on Wall Street, many people are getting a helping hand to overcome the debt they have created. Will they learn from this? We all need to learn to avoid the debt and the plastic cards in the first place.
Although I understand why banks want to forgive some of the debt, I think it is wrong. This one of the primary problems in our society. Nobody takes responsibility for their actions. If you sign, you are responsible to pay the debt. Congress provides a poor example for the rest of us. When we all learn to be more responsible with the money we have and stop the unnecessary spending, our nation, with or without a new president, will get back on the right track.
Now I am surprised to learn that to head off surging credit card defaults, banks and consumer groups are lobbying regulators to make it easier to forgive a portion of struggling consumers' credit card debt.
The proposal — and the unusual partnership by two groups typically at odds with each other — underscores the severity of the economic downturn, and the fear that credit cards could provide the next shock to the financial system.
USA Today reports that in 2008, delinquent credit card accounts hit a six-year high of 4.9%. Meanwhile, charge-offs — when banks give up on collecting debt — have been rising for about two years, hitting 5.47% in the second quarter, the latest data available, according to the Federal Reserve. Credit card and mortgage losses have dragged down banks' earnings.
Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others.
When you consider those on Wall Street, many people are getting a helping hand to overcome the debt they have created. Will they learn from this? We all need to learn to avoid the debt and the plastic cards in the first place.
Although I understand why banks want to forgive some of the debt, I think it is wrong. This one of the primary problems in our society. Nobody takes responsibility for their actions. If you sign, you are responsible to pay the debt. Congress provides a poor example for the rest of us. When we all learn to be more responsible with the money we have and stop the unnecessary spending, our nation, with or without a new president, will get back on the right track.
Wednesday, November 5, 2008
Credit Cards, the next economic crisis
Last week, the US Federal Reserve cut interest rates by half a percentage point to 1 per cent. That does not mean rate of interest will be reduced on your credit card. In fact the rate of interest you pay on your credit card is not expected to go down any time soon, if ever. The nation’s economic crisis is just in its infancy. We have a long way to go and it appears that different sectors of the economy will have their turn in the negative spotlight. First came the mortgage crisis. The nation is still sorting out that huge mess. Now, the New York Times is reporting that a credit card crisis is on the way. As Eric Dash wrote in Wednesday’s edition
After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers.
The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create.
Faced with sobering conditions, companies that issue Master Card, Visa, and other cards are rushing to reduce the bleeding, even as options once easily tapped by borrowers to pay off credit card obligations, like home equity lines or the ability to transfer balances to a new card, dry up.
Big lenders — like American Express, Bank of America, Citigroup and even the retailer Target — have begun tightening standards for applicants and are culling their portfolios of the riskiest customers. Capitol One, another big issuer, for example, has aggressively shut down inactive accounts and reduced customer credit lines.
Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries.
While such changes protect lenders, some can come back to haunt consumers. The result can be a lower credit score, which forces a borrower to pay higher interest rates and makes it harder to obtain loans.
The depth of the financial crisis has shocked our credit-hooked nation into rethinking its habits. Many families once content to buy now and pay later are eager to trim their reliance on credit cards. We have relied on credit cards too long. Many are learning a painful lesson; a lesson we need should have considered a long time ago. Get rid of the plastic and stay with the cast.
After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers.
The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create.
Faced with sobering conditions, companies that issue Master Card, Visa, and other cards are rushing to reduce the bleeding, even as options once easily tapped by borrowers to pay off credit card obligations, like home equity lines or the ability to transfer balances to a new card, dry up.
Big lenders — like American Express, Bank of America, Citigroup and even the retailer Target — have begun tightening standards for applicants and are culling their portfolios of the riskiest customers. Capitol One, another big issuer, for example, has aggressively shut down inactive accounts and reduced customer credit lines.
Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries.
While such changes protect lenders, some can come back to haunt consumers. The result can be a lower credit score, which forces a borrower to pay higher interest rates and makes it harder to obtain loans.
The depth of the financial crisis has shocked our credit-hooked nation into rethinking its habits. Many families once content to buy now and pay later are eager to trim their reliance on credit cards. We have relied on credit cards too long. Many are learning a painful lesson; a lesson we need should have considered a long time ago. Get rid of the plastic and stay with the cast.
Wednesday, October 22, 2008
Avoid This Tennis Star's Financial Advice
Roger Federer, the richest tennis player of all time, said last week that a "big mattress" could be his salvation from the current world financial meltdown.
Just two days after topping the all-time tennis rich list with a staggering 43.29 million dollars in career prize money, the 27-year-old Swiss revealed at the Madrid Masters that he keeps a close eye on the turbulence in the world money markets.
"It's not been whole lot of fun for anyone," said the multi-millionaire who puts faith in conservative money management.
"I've followed closely to know what's going on. It seems like the markets may come back a bit now, but I think it will take a while for things to calm down. Anyway, I have a big mattress," he joked. The turbulence in the markets admittedly is enough to make investors want to take their money out of the market and stuff it in their mattress, piggy bank, or in jelly jars buried in the side yard. Any one of those steps would be stupid. "Going to cash" is one thing — a strategy some people are using to insulate themselves against the short-term volatility of the stock market. Just as important, money in the mattress faces its own set of risks. The bailout bill Congress just passed contained a provision to increase the FDIC guarantee of deposits in your bank up to $250,000. Simply keeping your dollars in an interest bearing savings account would be a smarter choice. We may be facing difficult decisions financially. Do not make things worse by poor choices with the money you do have available.
Just two days after topping the all-time tennis rich list with a staggering 43.29 million dollars in career prize money, the 27-year-old Swiss revealed at the Madrid Masters that he keeps a close eye on the turbulence in the world money markets.
"It's not been whole lot of fun for anyone," said the multi-millionaire who puts faith in conservative money management.
"I've followed closely to know what's going on. It seems like the markets may come back a bit now, but I think it will take a while for things to calm down. Anyway, I have a big mattress," he joked. The turbulence in the markets admittedly is enough to make investors want to take their money out of the market and stuff it in their mattress, piggy bank, or in jelly jars buried in the side yard. Any one of those steps would be stupid. "Going to cash" is one thing — a strategy some people are using to insulate themselves against the short-term volatility of the stock market. Just as important, money in the mattress faces its own set of risks. The bailout bill Congress just passed contained a provision to increase the FDIC guarantee of deposits in your bank up to $250,000. Simply keeping your dollars in an interest bearing savings account would be a smarter choice. We may be facing difficult decisions financially. Do not make things worse by poor choices with the money you do have available.
Wednesday, October 15, 2008
Down Economy? Take Action!
Last week’s government rescue plan cost $700 billion. The number of job cuts in September were almost 160,000 and growing. The Dow is like a roller coaster.
These numbers indicate one thing: Now's the time to do everything you can to protect your finances. You need to take action now on a budget and to eliminate debt.
"Watch every dime coming into your house, because tomorrow it could be a nickel," warns Catherine Williams, vice president of financial literacy for Money Management International, which oversees nonprofit credit counseling agencies. There is no better way to do this than to stick to a budget.
The basic premise of a budget is simple: Make sure expenses do not exceed income. But you also need to find a way to save some cash. This is very important.
According to Money Management International's Consumer Credit Counseling Services: your budget should follow these guidelines:
Housing (20-35%)
Food (15-30%)
Transportation (6-20%)
Medical (2-8%)
Insurance (4-6%)
Utilities (4-7%)
Clothing (3-10%)
Personal Care (2-4%)
Misc. Items (1-4%)
Personal Debt (20% maximum)
Savings (10% minimum)
While investing money is a good ides, many are scared by what they see happening to the stock market. If that is the case, consider the nearly unbeatable return you can get
While I would not recommend that you ever use a credit card, not everyone agrees. If you do use plastic, attach your high-interest-rate credit cards with a vengeance by seeking out the cheapest rates you can find, look to a credit union. They tend to offer more favorable rates than big-name banks. You may also want to consider calling your card issuer and tell them you have received better rate offers. Lenders would rather lose a little money by lowering your rate than have you move your entire balance and future business to another company.
These numbers indicate one thing: Now's the time to do everything you can to protect your finances. You need to take action now on a budget and to eliminate debt.
"Watch every dime coming into your house, because tomorrow it could be a nickel," warns Catherine Williams, vice president of financial literacy for Money Management International, which oversees nonprofit credit counseling agencies. There is no better way to do this than to stick to a budget.
The basic premise of a budget is simple: Make sure expenses do not exceed income. But you also need to find a way to save some cash. This is very important.
According to Money Management International's Consumer Credit Counseling Services: your budget should follow these guidelines:
Housing (20-35%)
Food (15-30%)
Transportation (6-20%)
Medical (2-8%)
Insurance (4-6%)
Utilities (4-7%)
Clothing (3-10%)
Personal Care (2-4%)
Misc. Items (1-4%)
Personal Debt (20% maximum)
Savings (10% minimum)
While investing money is a good ides, many are scared by what they see happening to the stock market. If that is the case, consider the nearly unbeatable return you can get
While I would not recommend that you ever use a credit card, not everyone agrees. If you do use plastic, attach your high-interest-rate credit cards with a vengeance by seeking out the cheapest rates you can find, look to a credit union. They tend to offer more favorable rates than big-name banks. You may also want to consider calling your card issuer and tell them you have received better rate offers. Lenders would rather lose a little money by lowering your rate than have you move your entire balance and future business to another company.
Monday, October 6, 2008
Money In Your Mattress Is Not A Good Investment Strategy
The headlines are scary. Big-name financial institutions are failing, and even the safest of investment havens — the kind where losses are supposed to be inconceivable — have been the subject of ugly news. It's enough to make investors want to take their money out of the market and stuff it in their mattress, piggy bank, or in jelly jars buried in the side yard. Any one of those steps would be stupid. "Going to cash" is one thing — a strategy some people are using to insulate themselves against the short-term volatility of the stock market. "Taking your cash" is something entirely different, and judging from what people are saying, it's happening now in a misguided effort to get what "Frank the bus driver" described to me as "the ultimate protection." Putting money in a piggy bank, under normal circumstances, hardly rates as an "investment," but the people who are pulling the proceeds of big investment accounts are making a decision that could have a long-lasting impact on their finances. Moreover, they're not stuffing the mattress to save for a rainy day but instead are acting as if the apocalypse has arrived and they want a big horde of greenbacks in their bomb shelter. Emotions — most often fear and greed — rule investment decisions, and pulling the money out of all financial institutions, or even most safe havens like money-market funds, is clearly a case of running scared. Yes, some money-market mutual funds recently broke the buck — their commercial paper is deemed worthless or they were closed after they suffered a significant run on assets. It's heavy stuff, in part because safety-conscious investors feel violated, like someone broke into their piggy bank. But now is not the time to jump out of the speeding car. You won’t like the landing on the side of the pavement.
Putting your money in the mattress faces its own set of risks — everything from theft to fire to loss of purchasing power by not even attempting to keep pace with inflation. It may feel good while you do it, but it's not the right move for the long haul, even in these troubled times. That doesn't mean someone who is nervous now needs to be fully invested, or that they should not go to cash if that's what makes them comfortable with part or all of their money. It means that it's silly to suffer the loss of 2 percent or 3 percent — the amount you might get from a money-market fund or a bank deposit account — to avoid the chance of taking a loss that is not likely to be even that big. Giving up isn't much of a strategy right now, and knee-jerk reactions to go to safety aren't that smart, if you have done your homework and have taken steps to make sure you are safe.For investors wanting to go a step further, consider Treasury-only money funds; stick with the biggest fund companies, which have always bailed their money funds out of any troubled paper; or move into banks to gain the protection of the Federal Deposit Insurance Corp. Just don't bring the cash home, where it faces far more risks than it does in the market.
Putting your money in the mattress faces its own set of risks — everything from theft to fire to loss of purchasing power by not even attempting to keep pace with inflation. It may feel good while you do it, but it's not the right move for the long haul, even in these troubled times. That doesn't mean someone who is nervous now needs to be fully invested, or that they should not go to cash if that's what makes them comfortable with part or all of their money. It means that it's silly to suffer the loss of 2 percent or 3 percent — the amount you might get from a money-market fund or a bank deposit account — to avoid the chance of taking a loss that is not likely to be even that big. Giving up isn't much of a strategy right now, and knee-jerk reactions to go to safety aren't that smart, if you have done your homework and have taken steps to make sure you are safe.For investors wanting to go a step further, consider Treasury-only money funds; stick with the biggest fund companies, which have always bailed their money funds out of any troubled paper; or move into banks to gain the protection of the Federal Deposit Insurance Corp. Just don't bring the cash home, where it faces far more risks than it does in the market.
Thursday, October 2, 2008
Stop Making Visa and Master Card Rich
Visa Inc. and MasterCard Inc. are trying to derail legislation sought by retailers that would create a US government tribunal to set fees that the credit card companies’ member banks charge merchants. The fees yield an estimated $42 billion in revenue annually. You and I ultimately pay those fees! Congress probably will not pass the bill this year as sponsors build wider support for it. What can you do? Pay for your purchases with cash or checks instead of credit and debit cards. It is no secret that retailers who accept credit and debit cards are charged a fee for every debit and credit card transaction. This fee can be as low as a few cents or up to close to 6 percent. Retailers have this fee figured in on the selling price of their products. I have seen some stores post a cash or credit price on their products. This seems to be popular at gas stations. It would be great if we could all save a few percent when we check out at the store. Next time you fill up, pay with a wad of twenty-dollar bills.
Thursday, September 25, 2008
Collection Agencies; what you should know.
If you have the unfortunate privilege of dealing with a collection agency here are some things you should know:
First, know that you do not have to talk to them when they call you. If you do talk with them, do not let them scare you into sending money. They may try to tell you "This is the last chance you have to pay or we will begin legal action.” A third party collection agency cannot do anything legally against you. Only the actual business attempting to collect or a collection agency that purchased your debt can take you to court to collect.
Collection agencies will often tell you anything to get you to send money. If they call and you have no money simply, tell them you have no money and you will settle with them when you have the money.
When dealing with collection agencies you have to remember with whom you are working. The collection representative will try to act as though they are your friend and they are trying to help you. In some instances, they will even play good cop bad cop between the collector and his or her supervisor. The collector is not your friend.
The collector is usually on commission according to how much money they collect.
Management usually pressures collectors to take action to get dollars, now.
If the collection agency agrees to settle with you for less than you owe:
Record the time and date of whom you are talking and get all the details in writing. Put the record of this conversation in a safe place. You may need it in the future.
If the agency will not give you the details in writing do not send any money
Never let the debt collectors draw automatically from your checking or savings account. and never send a post-dated check.
The most important law to remember is the Fair Debt Collection Practices Act, which places many restrictions on collection activities. The FDCPA only covers third-party collection agencies, not original creditors.
Each state may also have applicable laws regarding such things as telephone harassment.
First, know that you do not have to talk to them when they call you. If you do talk with them, do not let them scare you into sending money. They may try to tell you "This is the last chance you have to pay or we will begin legal action.” A third party collection agency cannot do anything legally against you. Only the actual business attempting to collect or a collection agency that purchased your debt can take you to court to collect.
Collection agencies will often tell you anything to get you to send money. If they call and you have no money simply, tell them you have no money and you will settle with them when you have the money.
When dealing with collection agencies you have to remember with whom you are working. The collection representative will try to act as though they are your friend and they are trying to help you. In some instances, they will even play good cop bad cop between the collector and his or her supervisor. The collector is not your friend.
The collector is usually on commission according to how much money they collect.
Management usually pressures collectors to take action to get dollars, now.
If the collection agency agrees to settle with you for less than you owe:
Record the time and date of whom you are talking and get all the details in writing. Put the record of this conversation in a safe place. You may need it in the future.
If the agency will not give you the details in writing do not send any money
Never let the debt collectors draw automatically from your checking or savings account. and never send a post-dated check.
The most important law to remember is the Fair Debt Collection Practices Act, which places many restrictions on collection activities. The FDCPA only covers third-party collection agencies, not original creditors.
Each state may also have applicable laws regarding such things as telephone harassment.
Monday, September 22, 2008
Pay Yourself First
Want to increase your income? Sure everyone could use more cash. Consider this. Before I discoverd how to do this I never was able to save any money. I always said I would save some of what is left at the end of the month. However, there was never any money left at the end of the month to save because I always was able to find something I did not really need to spend my money on. When I started saving a percentage of my pay before I payed any other bills I found it was very easy to save up a ton of money and pay my bills with ease
Wednesday, September 17, 2008
Avoid Financial Slavery
Following the adage “an ounce of prevention is worth a pound of cure,” Grant Zweifel spoke to some Slidell High School students recently about the dangers of credit cards. The statement above is from a newspaper in Slidell, Louisiana. The reporter, Anne Lautzenheiser, was writing about one of my recent speaking engagements. I had the opportunity to inform groups of high school students in Louisiana how important it is to avoid credit cards. I know from experience. I have had to pay off massive credit card debt. It is not a pleasant experience. I wanted to show these students that there are ways to accomplish their goals without becoming a slave to some financial institution.
Friday, September 12, 2008
Unless You Are Buying a House, Avoid Borrowing Money
Approximately seven years ago, interest rates for home loans began to drop to some of their lowest rates in history. This sparked a massive real estate boom in the United States. This had a big impact on the nation’s economy. This also caused interest rates to drop on many other types of loans. Consumers could get low or even zero percent interest loans on anything from automobiles to televisions. For several years, retail sales and real estate continued to do very well. Many people were buying everything in site and money was flowing everywhere. This helped companies grow like no other time in history. Unfortunately, there is a down side to all of the lending that was going on. I warned of this several years ago. I said a lot of the economy is artificially inflated and this will come crashing down on the lenders and the consumers when it is pay back time. People were living beyond their means and spending was out of control. Many people made fun of me when I paid cash for everything except for my house. They said, “Why would someone spend cash when you can borrow money so inexpensively and then use your cash as working capital for your business. I remember telling them a rainy day will eventually come and when this happens, I do not want any payments except for my house. Well a rainy day has arrived and it is worse than just a rainy day it is a MONSOON! Now our economy is worse than it was before all of this started when you figure in inflation and high fuel prices. Consumers and companies who used common sense and did not get greedy and borrow money are still doing just fine today. The others are hurting badly or closing their doors. This current credit crunch has caused massive layoffs, job cuts and will probably get worse before it improves. Companies are not hiring and they are not creating many new jobs. I feel that the economic downturn that we are currently in was a result of many people borrowing more money than they could pay back. The bottom line of this story is to save for a rainy day and DON'T BORROW MONEY FOR ANYTHING BUT A HOUSE!
Wednesday, July 16, 2008
Paying with Cash Changes How You Shop
When I say paying with cash, I am very serious. Most Americans have no concept of simply using cash all of the time. I was very happy to read what Money Magazine’s Senior writer Donna Rosato wrote about killing off credit cards in the magazine’s June issue. She said, "studies find that paying with a card turns you into a different shopper, one who is less price sensitive and more extravagant. Forgo credit cards and you'll run up a smaller tab when you shop, plain and simple.
Why go to the trouble of clipping coupons and searching for 2 cents-a-gallon cheaper gas when you can save money without thinking about it by changing how you pay? As a bonus, you'll never have to worry about $39 late fees, 25% penalty interest rates or a creeping card balance again.
You may think that in this electronic world you can't function without a credit card. Not true, though you'll likely have to "cheat" with a debit card to get by. And you'll have to keep a sharper eye on your bank balance. Nothing wrong with that. In fact, paying closer attention to your finances can make the benefits of ditching credit cards even richer.
That's what we learned from dozens of enthusiastic ex-card users who shared tales of being able to retire early, stay at home with the kids and even lose weight once they swore off plastic. Once you consider all the upsides to quitting your card, what sounds like a radical proposal becomes, well, a remarkably obvious thing to do.”
I agree with that logic. It is obvious but most Americans fight for the right to buy on credit. The next time you get that credit card bill in the mail, think about what you just read and cut those cards to shreds.
Why go to the trouble of clipping coupons and searching for 2 cents-a-gallon cheaper gas when you can save money without thinking about it by changing how you pay? As a bonus, you'll never have to worry about $39 late fees, 25% penalty interest rates or a creeping card balance again.
You may think that in this electronic world you can't function without a credit card. Not true, though you'll likely have to "cheat" with a debit card to get by. And you'll have to keep a sharper eye on your bank balance. Nothing wrong with that. In fact, paying closer attention to your finances can make the benefits of ditching credit cards even richer.
That's what we learned from dozens of enthusiastic ex-card users who shared tales of being able to retire early, stay at home with the kids and even lose weight once they swore off plastic. Once you consider all the upsides to quitting your card, what sounds like a radical proposal becomes, well, a remarkably obvious thing to do.”
I agree with that logic. It is obvious but most Americans fight for the right to buy on credit. The next time you get that credit card bill in the mail, think about what you just read and cut those cards to shreds.
Friday, June 20, 2008
THOSE LITTLE EXPENSES REALLY ADD UP
Many believe the big bills, mortgage payments and paying off a car loan use up all of their money. Actually, the little every day purchases use up quite a bit of your monthly income. You do not realize what you have spent when it is only a few dollars here and there.
Paying for taxis, mocha lattes and sports cable packages contribute to over spending. Others who rein in pricey habits are seeing the savings gobbled up by gas prices or mounting debt. However, even among the relatively comfortable, rising prices are upending habits they have long known were costing too much anyway.
Cutting back does not have to mean a joyless existence, however. Simple measures like using cash instead of credit cards can make people more conscious of how much they spend. Taking a few hours to scan cell phone and cable bills for unnecessary charges can save, too. Shopping around for better deals when contracts run out is another good idea.
Most people are not even conscious of how much they spend. Celebrity Ed McMahon is a perfect example. The one word that is turning the former television announcer from the “big time” to beggar: Plastic.Published reports suggest that Pamela, Ed's wife of 16 years, is literally spending him onto the street. They say that she is completely "oblivious" to their cash troubles and shops as if their life depended on it. Her AmEx bill is legendary -- the couple reportedly owes them nearly $750K. That is an issue for Ed's friends, who have mixed feelings about bailing him out. They do not want to see their 85-year-old friend foreclosed on, but they are also not thrilled about supporting Pamela's passion for Prada.
In some cases, as with McMahon, the cost of a person's habits can add up to more than basics like rent and transportation. That's not to say the little habits will always determine your financial fate but that do have a big impact. Other factors — mortgages, bad interest rates, credit card debt — are likely the bigger drains on your budget. However, when times are tight, it is a chance to review all spending, big and small.
Giving up pricey routines does not have to stop you from enjoying life. Make your own coffee drink at home rather than spend $5.00 at Starbucks. Instead of buying pre-packaged Lunchables at around $4 apiece, make your own using deli meats and cookie cutouts; your kids will not know the difference.
To save money on gym memberships, take the family on bike rides. There may be no more trips to Chuck E. Cheese, but you can have even more fun taking picnics to the park.
Keep these tips in mind and consider some of your own, keeping in mind that those little expenses eventually may bite you in the checkbook.
Paying for taxis, mocha lattes and sports cable packages contribute to over spending. Others who rein in pricey habits are seeing the savings gobbled up by gas prices or mounting debt. However, even among the relatively comfortable, rising prices are upending habits they have long known were costing too much anyway.
Cutting back does not have to mean a joyless existence, however. Simple measures like using cash instead of credit cards can make people more conscious of how much they spend. Taking a few hours to scan cell phone and cable bills for unnecessary charges can save, too. Shopping around for better deals when contracts run out is another good idea.
Most people are not even conscious of how much they spend. Celebrity Ed McMahon is a perfect example. The one word that is turning the former television announcer from the “big time” to beggar: Plastic.Published reports suggest that Pamela, Ed's wife of 16 years, is literally spending him onto the street. They say that she is completely "oblivious" to their cash troubles and shops as if their life depended on it. Her AmEx bill is legendary -- the couple reportedly owes them nearly $750K. That is an issue for Ed's friends, who have mixed feelings about bailing him out. They do not want to see their 85-year-old friend foreclosed on, but they are also not thrilled about supporting Pamela's passion for Prada.
In some cases, as with McMahon, the cost of a person's habits can add up to more than basics like rent and transportation. That's not to say the little habits will always determine your financial fate but that do have a big impact. Other factors — mortgages, bad interest rates, credit card debt — are likely the bigger drains on your budget. However, when times are tight, it is a chance to review all spending, big and small.
Giving up pricey routines does not have to stop you from enjoying life. Make your own coffee drink at home rather than spend $5.00 at Starbucks. Instead of buying pre-packaged Lunchables at around $4 apiece, make your own using deli meats and cookie cutouts; your kids will not know the difference.
To save money on gym memberships, take the family on bike rides. There may be no more trips to Chuck E. Cheese, but you can have even more fun taking picnics to the park.
Keep these tips in mind and consider some of your own, keeping in mind that those little expenses eventually may bite you in the checkbook.
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