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Archive for May, 2009

Friday’s Financial News…Credit card legislation.

Friday, May 22nd, 2009

Today’s financial news is big news for anybody with credit cards or with credit card debt. It’s in regard to H.R. 627, the Credit Cardholders’ Bill of Rights Act of 2009, which passed the House on April 30, 2009 and the Senate (S.414, The Credit Card Accountability, Responsibility and Disclosure Act)
on May 19, 2009.

Today’s article is What credit card legislation means for you By: Ismat Sarah Mangla

Brief summary: Legislation that restricts “questionable” lending practices by credit card companies. The article shares the highlights of the 2 Bills, in plain language.

The original bill in question, H.R. 627, was renamed by the Senate, The Credit Card Accountability, Responsibility and Disclosure Act,or S.414, which passed by an overwhelming margin of 90-5, with 5 people not present or not voting. This bill had some changes in it from what the House sent to the Senate, so now a committee of the 2 groups will have to get together and work out the differences, so that they are in agreement. Then, it goes to the President to be signed into law, or vetoed. So, here is what this legislation means to you:

1. Due dates – In the past, credit card companies didn’t have to send you the bill until 14 days prior to the payment due date. This will now be 21 days prior to due date, and when the due dates fall on holidays or weekends, the payment will be accepted the next business day. I think this is great, because everyone needs time to plan out their budget. The holiday/weekend schedule part is interesting though, because while I agree you shouldn’t be penalized for a holiday (who knows when they are except bank employees), with regard to the weekend, you should have mailed that payment earlier, since those weekends, they do come at the same time every week!

2. Teaser rates – Both the Senate and House bill call for these “teaser rates” to be offered for at least 6 months. Well, I can’t see how this is a big deal, but more importantly, should credit card holders be falling for “teaser rates”?? Don’t fall for anything like that. Face it…if it looks like a good deal, and it came from the credit card company, it’s not. Don’t buy into the hype!

3. Cards for young adults – This is probably my favorite part of this legislation, since I saw the credit card companies hard at work (and the college students falling for it) when I was in college. The House bill doesn’t allow people under 18 to get a credit card unless the parent is the account holder, and limits college students to one credit card, with limits on their credit to a percentage of their income. But here’s the best part…The Senate bill went even further. Under the Bill from the Senate, no one under the age of 21 would be allowed to have a credit card (thank goodness), unless an adult co-signs or the person can show proof of income. Now, why do I like this so much? Well, I am very much of the opinion that people need personal responsibility, especially with money, but let’s face it…when we’re young, we don’t always know what is best for us, and we do stupid stuff. I think it is the parents responsibility to teach their children how to handle money, but if the parents don’t know how, then where does that leave the children? Most likely, in debt.

4. Retroactive rate hikes – This one can be confusing, but the gist is that if you carry a balance on your credit card (which you shouldn’t do), and then the CC company raises your rate, the new rate only applies to the purchases you make after they raise it. However, if you’re more than 30 days (House bill) or 60 days (Senate bill) late, then the credit card company can raise the rates on all of your debt. I like that it keeps them from charging higher rates on balances you carry (but again, you shouldn’t be carrying a balance), and totally agree that the CC companies should be allowed to raise the rates if you”re late. You were late. There SHOULD be penalties.

5. Penalty periods – Speaking of penalties, if you make a late payment and your rate goes up, the Senate bill says that you can reclaim your lower rate if you pay on time for 6 months in a row. I agree with this, because in 6 months you should learn your lesson. Besides, the CC companies won’t be losing any money, since the people who are consistently late will never be able to reclaim their lower rate.

6. Over-the-limit fees – This is a nice little part of the bill. Used to be, credit cards had “limits”. These would keep you from spending more then you should. The problem? People didn’t like being “declined” in public, so CC companies would just let you go over your limit, and then charge you a hefty fee. However, with the new legislation, consumers have to opt in to get over-the-limit approval, and the fees that come with it. I didn’t disagree with the fee…you shouldn’t have overcharged your card. You should have paid attention to your finances. But this is great, because you actually have to make a conscious decision, by opting in, to go over the limit. You actually have to say “yes, I want those fees”…and people will do it!

7. Gift cards – I was surprised these made it into either bill. Legislation calls for expiration limits to be no shorter than 5 years, and if there is a “dormancy fee”, it must be printed on the card. I don’t know anybody that waits more than 5 years to use a gift card, but I don’t think I’d want my money to be swiped by the gift card issuer because I’m slow.

8. Advance notification – The standard practice has been to give card holders 15 days notice of a rate change in your card. The bill changes that to 45 days. Again, I like the planning aspect of this, but if you just don’t carry a balance, then it won’t matter.

9. Payment allocation – Here’s another confusing one. Say you have a balance transfer on your card at some low rate, and purchases at a higher rate. The CC companies have been applying any payments to the lower interest rate first, so they could still rack up interest charges on you on the higher rate (i.e. more money for them). But now, any payments you make that are “in excess of the minimum amount” are applied to the higher rate first, and then the remainder of your balance in descending order. Notice the key phrase…in excess of the minimum amount, or payment. I like this because it will hopefully encourage people to pay more than the minimum amount, which is the ONLY way to get them paid off! So, you pay more toward the card, you’re rewarded, you pay the minimum, you’re not. This is good, though I think people shouldn’t need a reward for doing the right thing and being responsible.

10. Universal default – Universal default is when CC companies raise your rates on their card because they discovered that you were late on another card. Both bills eliminate this, which is good, because it’s wrong to assume that one mistake will carry over to all of your finances.

11. Account closings – Although not covered in the Senate bill, the House bill requires that the CC companies give you 30 days notice before it closes your account. I don’t know why this matters, but I don’t see it as a hassle for anybody, so I guess it’s ok.

According to the article, most of these are addressed in the Fed’s credit card regulations which are supposed to take effect July 2010. So, is this legislation necessary then, or is it that the government (the Fed is not the government…Find out what the Fed is here), specifically congress, wants to take “credit” for the new regulations, since their approval ratings are at 35.7%?? I’ll let you think on that one for a while.

Now, while I think that, in general, the government legislates too much of our lives, I am obviously, not opposed to this legislation. This is not to say that I think the credit card companies are “the ones to blame” for all the delinquent balances out there…I mean, come on, you didn’t know when your payment was due? You had no idea what would happen if you spent over your limit? You didn’t know your credit card limit, and it’s the credit card companies fault?? No, it’s not their fault that you are in debt, but they are engaged in practices that I think are a little shady, and I am happy to see that change is coming.

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Next week is “Staycation Week”…how to do it on the cheap!

Wednesday, May 20th, 2009

On March 6th I wrote a post on why vacations are important, including the aptly named “staycation”. Today, I am going to talk about the planning that went in to our staycation, which happens next week. Now, if you remember the post from March, I told you that we take a vacation and a couple of staycations every year. Well, this is the first of the staycations, with the vacation to follow in August, and more staycations to come later on in the year. So, since it is the first of the year, I knew I had to come up with fun stuff to do, to take real advantage of the break, and I knew that I had to keep the budget reigned in, since we don’t budget a lot of money for staycations. That’s alright, because I love a money challenge!

Well, the first thing I did was to set up a chart of the week on the computer (geeky, I know, but it works!) so that I could plug in the information easier. It has the date, day of the week, activity/activities and the estimated cost of each days activities. This helps you keep track of your activity options, makes sure you know what you are spending (or it keeps you from spending too much) and makes sure that you have enough activities lined up for the week. Now obviously, you want some flexible time in their for the days that you just decide to stay in and goof off, but I always think it is better to be over-prepared than under-prepared!

Next, I did some research to find out what to do in my area for little or no money. After some digging I found quite a few things to do in my area, and started to choose the activities that I thought would be fun for Jerrill and I. Coupling the new ideas with other ideas that I had on my own and we had a very nice list of things to do. For example, I intend for us to go to a wine tasting one day next week. Now, for those of you that don’t know, central Kentucky was the site of the first commercial vineyard in the United States! We have several vinyards within driving distance, and have visited one prior to this (for Valentine’s Day 08…my idea, and we had a great time) but I am looking forward to visiting all of them over time! Other things on the list: Going for a picnic, outdoor games, board game night with milkshakes, go to our local Arboretum to walk around and look at plants, and of course, we will be going to see Night at the Museum #2 and Terminator Salvation. There are many other things on the list, but you get the idea.

Now, that I have decided on my activities for the week, I then get to research them and “guesstimate” the costs associated. I come up with figures for the activities, and total them up. I then take that total and compare it with the amount of money I have to spend that week. Now, as I said in the post on March 6th, everyone has a little money for a staycation, because you have your normal weekly amount to spend. So, if you normally have $150 a week to spend on groceries, gas and recreation (dining out, drinks, movies etc.) then you still have that amount…you can simply repurpose some of it! For example, instead of buying your “normal” groceries, buy some things on the cheap so that you can go out to a movie, or buy steaks to grill out, or both! It’s all about being creative to work within your means!

So, the chart/list would look something like this:

  • May 25th, Monday – Picnic at the park – Cost $10 (for groceries)
  • May 26th, Tuesday – Nature walk at the Arboretum – Cost Free!!

I know that because of the economy a lot of people are opting to stay home this year, so I hope that this will help you better plan for your staycations, so you can more thoroughly enjoy them!

***A note to our readers: We believe that family time is just as important as proper money management to leading and living a successful life, so the blog may or may not be written next week. Honestly, it depends on whether or not I find the time to write in between the fun! I might post photos of the activities we are doing instead, but I haven’t decided. Don’t despair! I’ll be back to it the following week!

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Mucho Moolah! Monday’s Money Saving Tip! Switch brands!

Monday, May 18th, 2009

Today’s tip might seem a little odd to some of our readers, but I wanted to post it anyway. I have used this tip several times, and it has never failed me in the past. Today’s tip is about buying alcohol. Let’s face it, alcohol is expensive, and most of us don’t know enough about it to be able to switch to a different brand or type without the end result being an awful drink that you don’t want. This means wasted money. So today, I am sharing a way to buy alcohol on the cheap without fear of buying something that tastes awful…it’s all in how you do it.

First things first…if you are looking to switch brands, you shouldn’t try to do this at a gas station or other liquor store that has a TINY selection. You need to go to a location that has enough selection of each type of alcohol to make the prices competitive.

Next, do not go to a liquor store that does not have a knowledgeable staff…as an example, I walked into a liquor store once and asked if they had Dekuyper Peach Schnapps and they said they weren’t sure if they carried that brand…well, Dekuyper is a “major brand” of alcohol, and any employee should know the name. The fact that this employee didn’t told me that their knowledge of their product was limited, and I shouldn’t ask them for any more help.

Going to a store that has a knowledgeable staff is the key when I switch brands. When I want to switch alcohol brands, or try a different type of wine, I go to our local Liquor Barn. They are only located in our state, so you should find a liquor/party store in your area. So, I walk into the store, find the nearest employee, and ask them which employee on staff that day is most informed about the particular type of alcohol I am interested in. The employee never hesitates to offer a name or two, and tells me where I might find them. Once I find the employee in question, I ask for help, and explain what I normally use, what I like and don’t like about it, what types of drinks in general I like and what price range I want to be in. This has never failed me. I am always pleased with the results, no matter if it was wine (they have helped several times with wine) or with hard liquor (I switched brands on vodka, which costs less and is smoother than the other brand).

This tip can be applied to more than just alcohol, but make sure when you go to a store and ask for help that the employees are not commission based or high pressure sales driven. You can’t always trust that these employees are genuine when they direct you toward a particular product. I have used this tactic when choosing gym shoes at our local athletics store (non-commission) and purchasing flowers/shrubs/trees at our local nursery. You just have to find an expert/knowlegeable person and get their help, the same way you go to a lawyer for legal advice and a doctor for medical help. Try this tip! Don’t feel like you are bothering an employee if you ask for help, that’s what they’re there for!

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Friday’s Financial News…Entitlement programs!

Friday, May 15th, 2009

Today’s financial news is about something that we all know exists, but not a lot of us think about…Entitlement programs, such as Social Security and Medicare.

Today’s article is The forgotten fiscal problem By: Jeanne Sahadi

Brief summary: The release of a yearly report from the individuals who oversee Social Security will likely spark some debate because Social Security has been in financial trouble for a while, and is likely to be in even more trouble in the years to come.

Thanks to the rise in unemployment, currently at 8.9% nationally, the money paid into the Social Security system has fallen. The article states that the “White House budget office estimates that Social Security will take in less in payroll taxes than it must pay out in benefits for 2009 through 2011. And then the system is expected to start running a small cash surplus for a few years before once again taking in fewer taxes than it pays out in benefits”. What does this mean to you? Potentially, a lot, because when social security runs out of money, the government will try to make up the difference somewhere, and that will more likely be higher taxes and not government spending cuts. And while I am on the subject, I would just like to remind everyone that Social Security is not some money that the government is “giving” you. This is money that you pay in out of every paycheck that the goverment is supposed to give you back when you retire.

According to the trustees who oversee the program, it will start to take in less money then it pays out in 2017 and that the trust fund will be tapped out by 2041 (see below)…remember that the government borrowed the surplus of $2.4 trillion that Social Security had a while back. Without any action, 2041 (revised to 2037 in an article published 1 day after this article was released, which you can read here) is the date after which the system can afford to pay out only 78% of benefits promised to the future retirees, otherwise known as the people who paid into Social Security for decades only to be denied all of their money back when they need it. This is a problem people need to know about. A lack of people paying in is something that will cause problems down the road.

One of the reasons sited for the long-term shortfall is that Americans are living longer. The American Academy of Actuaries, a group of people who are experts in evaluating risk, are advising that U.S. lawmakers increase the retirement age for Social Security. This might fix the problem, but unless your benefits increase for every year that they don’t pay your money back, then they are taking advantage of you. Think about it like this: If you retire at 65, and can collect $1500 a month until you are 100 under the current system, then these benefits should increase by at least $250 each month if you are forced to wait until age 70 to start drawing
social security. But that is NOT what they are planning, I assure you.

The article quotes a recent speech the house majority leader, Steny Hoyer gave regarding Social Security. He is quoted as saying “We can bring in more revenues. We can restrain the growth of benefits, particularly for high-income workers, while we strengthen the safety net for lower-income workers. And/or we can raise the retirement age, recognizing our life expectancy is significantly higher. What is missing here is not ideas — we have a lot of ideas — it is the political will.” Now, follow what he says…they can collect more taxes, they can cut back on benefits, especially for high income workers (who, incidentally, paid in MORE Social Security taxes because they earned more…yeah, that’s fair), while increasing benefits for low income workers (which means giving these workers more than they paid in), or raise the retirement age to collect benefits(which I already addressed above).

Overall, I think the article points out a real problem for the citizens of this country. Social Security is not being funded well enough, and those of us paying in now, which pays benefits for those retiring now, are the ones who will suffer in the future when we retire. Let’s hope Social Security will be in the public eye enough to encourage people to make a back up plan, since it’s obvious, we’re going to need it!

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Saving for college can be scary…

Wednesday, May 13th, 2009

Whether you have a teenager in high school, or a toddler that isn’t even in preschool yet, saving for college is probably on your mind. You worry about the cost of tuition, books, living expenses etc. You worry about where they will want to go to school, and if it will be safe. You worry if they will meet the right friends who offer the right kind of encouragement and environment. Let’s face it…you are overwhelmed! To be honest, I can’t help with the type of friends they will meet or whether the college is safe, but I have some ideas on the costs, and have found a website that offers some great tools to set you on the right track.

Where do you start? What should you be doing? Well, the best advice I can give you is to start saving as early as you can. You should be saving for your child’s education as soon as you are out of debt (with the exception of your house, if need be) and have your 3-6 months emergency fund in place. I would prefer that you are contributing to a retirement plan as well, since we don’t want to shortchange you in retirement to fund your child’s college. Now, when I say as soon as you can, those of you with high school aged children shouldn’t panic. You still have time to save, but your saving strategy might have to be more aggressive.

So how much should you save? Well, that amount can vary greatly, since the cost of a state university is significantly less than that of a private college (i.e. Harvard or Princeton). Each child’s monetary needs will be different for their education, and each parents income and timeframe are different for saving. So, it really depends on how much extra you have out of each paycheck and how long you have to save. You should sit down and look at your budget and figure up how much you have left over each month. You might figure out that you want to save for the Harvards and Princetons of the country, but the reality is that it isn’t feasable. I guess what I am trying to say is that you shouldn’t worry about “how much you should save”, but rather focus on saving what you can and put all your energy into getting scholarships and grants to make up the differnce if need be.

We are planning on trying to start a family this year, and we have discussed this situation at length (no one can say we aren’t planners, hehe) and we have agreed that we would make every effort to save enough to cover 4 years of tuition, books and living expenses at an in-state university. If the child wants to go to a more costly private school or an out-of-state university, we will do what we can.

There are many different tools out there to help you in your quest to save for your child’s college expenses. There are websites like ours, that offer advice in many different areas of your financial life, and there are websites that specialize in 1 area of your finances. A great website I found is called Savingforcollege.com It helps you sort out where to put your money and has tools like calculators that can be tailored to your particular situation. For example, if your child is 6 years old, and you need to save for 12 years and then pay for 4 years at a university that costs $ 42,399 (or some other random amount) a year, their calculator can help you figure out what you need to save to get there. It also has a lot of information about the 2 main types of accounts to put your money in: a Coverdell ESA (Education Savings Account) and a 529 savings plan. Both of these plans have advantages and disadvantages, so you should read the information here and here and compare them to see which one suits your needs. Clark Howard’s website is another great place to check out advice on choosing the correct 529 savings plan that works for you, and why you might want one from a different state then the one you live in!

Overall, as parents you have lots of free tools out there to help uncomplicate the process of saving for college. Use the information we have provided here, use the website we talked about earlier and the tools it provides, then look at your budget and see what you can afford. As I said before, the name of this “game” is to start as early as you can. But don’t let the process overwhelm you. Parents have enough to worry about on a day to day basis without getting bogged down in where to put college money. Find someone that is smarter than you on the subject, and get them to help you!

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Mucho Moolah! Monday’s Money MAKING Tip! Become a tutor!

Monday, May 11th, 2009

Today’s tip, as I am sure you noticed from the title, is not a money “saving” tip, but rather a money “making” tip! I thought that it was about time I included some ideas for people to make extra money since the summer is coming up, and, most of us like to get out and do more in the summer. There are cookouts, concerts, watersports etc. that we want to participate in and might need more cash to be able to pay for them. So, today’s tip is to become a tutor!

The first thing you should know is that to be a tutor, you need to be proficient in a particular area of study. This doesn’t only mean math or science, because high schools and colleges offer many more subjects then just math and science. On top of english and social studies classes, students take computer/tech classes that they would need help with, as well as engineering classes, excercise science, language etc. If you are someone who has a proficient knowledge in these areas, you can tutor too!

There are many different ways to become a tutor, and the income that you can make from this extra job isn’t bad. The easiest way to “get your foot in the door” is to approach high school teachers from a local high school or college professors from a local college and ask if they would pass on your information to any students looking to be tutored. Also, put your name on the bulletin boards located in the high school and the buildings on the college campus dedicated to the field you are proficient in. If there isn’t a didecated building, then post your information where the offices for the professors in that field are located. There is usually a bulletin board there as well! Either way, all that is required of you is a little leg work, and maybe printing up some business cards (listing your qualifications would be advised). To do this, you should know that the legal way to go about it is by obtaining a business license and then paying taxes every year (sometimes quarterly, I think, but you should check with an accountant for advice). Tutors who are on their own can charge anywhere form $25-$50 an hour, depending on where you live.

Another approach to becoming a tutor is to register with an online website. There are many different tutoring websites out there, and not all of them are reputable. I have found a couple that seem to be “above board”, and they are Tutor.com, and Tutoring Club. So, you apply for a job/register for a franchise on these websites, but they are a great tool because you don’t have to work as hard to find the tutoring clients since these websites have already built up a client base!

So, this is the first of the new addition of money “making” tips! Tutoring is a wonderful way to make extra money, since it is a job that usually is in demand between 4 – 11 P.M., which means for most of us, it won’t conflict with our primary job! It also gives you the opportunity to connect/network with people in your community and help children reach their potential in a given field…and for an extra job, what could be better than that?

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Friday’s Financial News…Consumers are spending less!

Friday, May 8th, 2009

Today’s financial news relates to an article I found on CNNMoney.com regarding the economy, the recession and what it means for retailers and shoppers!

Today’s article is Goodbye to shop ’til you drop By: Parija B. Kavilanz

Brief summary: Retailers have been suffering at the lack of shoppers shopping. They are also noticing that the shoppers who are out are being more selective in what they do buy.

It’s called frivolous spending for a reason, and it’s what Americans do well, unfortunately. We are all guilty of it at one time or another. I myself, recall buying a faux leather bomber jacket this past fall and thinking that I would wear it all the time…I didn’t. I wore my fleece zip up or my wool pea coats, as always. Alas, my very cool bomber jacket hung in the closet all winter (thank goodness it was faux)and my jacket can be added to the category of frivolous spending. So, we are all guilty of it, but luckily, it’s become out of fashion as people in the U.S. are focusing more on budget shopping.

The article points out that our retail culture is in a transition from concpicuous consupmtion to budgeting because we are starting to realize that we’ve lived far beyond our means. Things like pre-owned cars and store brand labels are starting to come back in fashion, and, for what it’s worth, I don’t know why they ever went out of fashion. There is nothing wrong with purchasing a car owned by someone else, especially if it is in good shape and fits your budget better than its brand new brother!

Another real interesting thing to note is that high income shoppers whose jobs/incomes haven’t been affected are shopping differently and putting extra money away! These high earners might not necessarily start buying less expensive items, but they will be “more selective” in their purchases and focus on the quality of the item, rather than the quantity.

The article makes a very exciting point about the retailers approach to selling and how they are going to have to change strategies. They are going to show a “value” to their product, over and above the competition, if they expect to separate us from ours dollars. This means an expansion in the type of fits and varieties. For example, tall men with a long inseam cannot go into just any store and find a pair of pants, the same way that short waisted women cannot wear all of the “long and lean” shirts that are out there. I mean, the name implies “short waisted people, this is not for you”.

As the article says, the retailers of this great nation are going to have to become more sophisticated, selling items that maintain high quality while maintaining value, that can be sold to a wider base of people. In the example of cars, shoppers want to go back to basics. A car that is mechanically sound and will last for a reasonable price is a lot more important than tilt/cruise and the “gold package”. Clothes that are designed to fit “real people with average bodies” and not just 5’11″, 22 inch waisted models will be considered investment pieces in this new economy and will sell. Everything else will be considered “trendy” and will likely be overlooked. Stores that aren’t strategizing for this outcome should take heed…when you start designing a product for a broader group of people, you will sell more items!

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Are we talking about YOU?? Maybe…

Tuesday, May 5th, 2009

When I am writing a new blog entry, I am always thinking of how it will impact the people who read it, and what action it will cause them to take in their own lives. I try to share tips to help people better manage their money, tips to save more money and tips to MAKE more money. I want to share lessons that we have learned in our lives that could help people get ahead in their lives or simply live better lives. The one thing that I DON’T do is assume that every tip will help every reader. That said, you, the reader, should not assume that all tips are meant for you! Our purpose is to offer a LOT of helpful monetary and lifestyle information for you to use in a manner that suits your particular needs and situation.

A few weeks ago, I posted an entry about swap meets. Now, not everyone is going to want to have a swap meet. Maybe you’re a jewelry lover who saves up extra money by brown-bagging your lunch so that you don’t HAVE to skip buying jewelry from your favorite retailer! Maybe you don’t shop at membership club stores because you clip coupons so well that when you go to your local supermarket, they end up owing you money! Maybe you work a few extra hours every week so that you CAN take your family out for dinner, and not worry that it will break the bank.

So, if you see a tip posted that you think doesn’t apply to you, I want you to do 2 things. First, ask yourself if you are SURE that it cannot be applied to you. Remember the jewelry lover who doesn’t want to do swap meets? Well, maybe she should rethink her decision. Maybe the swap meet can help her switch up old jewelry she has stopped wearing for new. And maybe, it’s more then just a business transaction..maybe it’s also about getting together with friends and having a good time. Now, if you are absolutely certain that this tip cannot be applied to you, then you need to understand that their are people who CAN use this tip, and if you know anyone that you think might be interested, send them to our website. Let’s face it, we are all always learning new tricks to live better!

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Mucho Moolah! Monday’s Money Saving Tip! Why BOGO is a rip off!

Monday, May 4th, 2009

Today’s tip is a favorite of mine, because it’s something a lot of us do, and not many of us take the time to figure out. It’s not that we are incapable of figuring it out…we just don’t_think_about_it! Today’s tip, is in regard to the “Buy 1 get 1 50% off” sales that retail stores have all the time…Don’t fall for them!

Think about it…buy 1 get 1 50% (or half) off, is the same thing as 25% off of each item. That is NOT a significant discount! That is a relatively standard discount something at a retail store receives when it goes on sale, which means they have a lot more margin in the item than 25%! The same thing goes for appliance/electronic stores, that offer $50 off when you spend $500 or $100 when you spend $750…that works out to be 10% and 7.5% respectively. That means the discount actually goes DOWN when you spend more!

Another fun part of the “Buy 1 get 1 50% off” is that they have made you spend more money then you would have when you went to the store in the first place. Know why? Because they have made you buy 2 of something, where you might have only bought 1. That’s right…it’s BUY 1, GET 1 50% off, so they have made you buy 2 of them! So, let’s say that you are looking at a $40 skirt (men, substitute a tool). It’s buy 1 get 1 50% off, but you only need the 1 color (tool). You say, well, i might as well go ahead and get the discount…now, instead of buying 1 $40 skirt (tool) that you need, you are buying 2 for $60! The retail store got $20 more dollars from your wallet, and still did not have to give a very big discount!

Now, if the retail store has a percentage off sale, where you are not forced to buy more than one item to get a discount, go for it, if you NEED the item and if the discount is worth it. I usually don’t think a discount is good until it hits 40-50% off per item. Also, don’t forget that an item you truly NEED does not HAVE to be discounted for you to purchase it. I should also tell you that I do not have a problem with a grocery store “buy 1 get 1 50% off”, if it is on something you would have bought anyway, like frozen veggies, and are absolutely sure you will use both items. So, the moral of the story, is to be the savvy shopper that I know we all have inside of us. Remember back to when you were a child, and had to make your money last. Since you didn’t have a job, you couldn’t guarantee that once you spent what you had, you would be able to get more in the near future. Be a smart shopper and don’t fall for gimick sales that just want to make you spend more money.

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New Facebook Poll!

Sunday, May 3rd, 2009

We’re going to start doing a little sales research as we finalize the design of our software. Check out our latest poll on Facebook! Thank you for helping us build our business.

Also, check us out on Twitter where we will give you behind the scenes information on the Southern Couple’s Guide to Successful Living!

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