Downfall of American Automotive Industry

I really feel sad for the automotive industry. Once it was the pride of American manufacturing but today it is dealing with an unprecedented upheaval which could decide if America even retain a tiny share of car sales around the world.

Detriot's Big Three is already whittled down to Ford, while Chrysler and General Motors are in the midst of bankruptcy proceedings and have been ordered to sell off their assets.

A lot of Americans (workers, dealers, suppliers and investors) are left on the ropes when these well-paid top management fail to recognize shifting winds in consumer trends.

The era of cheap fuel is over and Americans are facing a double whammy of lower income and credit crunch, yet the Big Three continue to build big gas guzzlers like Hummers. Just imagine the energy inefficiency when such heavy vehicles travel thousands of miles with only one passenger in tow.

As sprawling manufacturing plants spring up everywhere, the demand-supply equation became so skewed that General Motors and Chrysler can no longer sustain their business model and have to depend on taxpayers' money since last year. There were also unsustainable wages and benefits (health insurance and pension contributions) which compounded the crisis.

Not surprisingly, change has to come, and the Obama administration deserves credit for refusing to bail out an uncompetitive industry. Taxpayers cannot fund the operating expenses indefinitely and foreign car makers from Japan, Korea and China (especially the ultra cheap made-in-China "Cherry" automobiles) are chipping aggressively in the domestic market.

During this consolidation period, cars will keep getting cheaper in order to entice consumers to absorb the oversupply. Is it a good time to buy a new car or to lease one? Which approach can actually help us to save more money?

I will discuss this issue in a later post.

No Mercy From Predatory Credit Card Companies

The ink has barely dried on the credit card bill which President Obama signed in May and credit card companies are running amok with their predatory actions again.

It seems like they are going all out to squeeze water out of a rock, lest their profits are diminished from the changes which go into effect in the middle of 2010. And they have yet to devise ways or loopholes to circumvent the new rules or shift the goalposts. Thus, the anxiety of credit card companies is understandable.

Suze Orman pointed out correctly that credit card companies have an entire year to have their way with you. And nobody will hear you scream.

Ya right, we can't really expect Obama to amend the bill again especially when he already has so much on his platter, from taxes, financial reforms, war, health care, economy, etc.

The USA Today reports that "Most issuers have raised rates or fees for certain borrowers. In the latest round, Bank of America and Chase have increased, or are increasing, their maximum balance-transfer fees, from 3% to 4% and 5%, respectively."

"Chase is also expanding the definition of who could get hit with a penalty interest rate. Meanwhile, InfiBank is establishing a higher minimum APR -- the greater of 15.99% or 11.99% plus the prime rate -- on many cards. And Capital One and Citigroup continue to raise card rates for certain borrowers."

If you continue to roll over your credit card debts, it is time to exercise discipline and get your finances in order by whittling down the debts. The credit card companies are not known for being charitable and will pile on your misery at the moment when you need them most.

But in fairness, the blame cannot be placed soley at the doorstep of credit card companies. They're just doing their job, which happens to be screwing us for maximum profit so that they can take home fat bonuses.

We have to take some responsiblity for falling prey to their temptations. Our elected officials are also to blame. Instead of working towards the good of American voters, they are protecting these for-profit organizations every step of the way.

What do you guys think?

Money Quote: Money Never Made A Man Happy

“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”

- Benjamin Franklin

This is the first of many money quotes which I will be discussing. Benjamin Franklin, a man of many talents (statesman, scientist, writer, philosopher and Inventor) made the above statement, which I absolutely agree.

Indeed, the more money you have, the object of interest becomes meaingless. Making money becomes merely a game to accumulate more zeros in your bank account.

At any one time, a man can only clothe himself with a shirt and pants and sleep on one bed. He needs only three meals a day for sustenance and a roof over his head to protect against the elements.

Everything else is a want and not a necessity. I am sure you are going to tire of having delicacies like abalone, lobster, caviar, wagyu beef every day of the week.

Having too much money, say from a lottery, can turn your life upside down and before long, you will be begging for the tranquility and privacy when they were average Joes.

Troubles start knocking on your door in the form of dubious friends, investment scams, vices, decadent lifestyle, breakup in marriage, fighting among your children for inheritance, etc. Many people end up poorer, financially and emotionally, after the circus came to an end.

I am contended with having just enough money to be self sufficient and not super rich.

What do you guys think of money? Do you really need more money than you can ever spend in this lifetime?

Learn To Survive On A $100 Grocery Budget

My family shops frugally and sticks to a grocery budget of $100/week. For a week of food supply, it is a comfortable budget and we usually spend less than that.

However, I am surprised to know that many people often exceed this amount when they grocery shop. I guess they end up with a cart full of random items while walking down the aisles but they don't amount to much in terms of nutritious and filling meals.


You can always buy that caviar but you won't have much left for other food. Even offered at half-price, delicacies are out of our league. Unless it is Christmas or Thanksgiving, or you won't see any delicacies in our grocery bags.

Here is a list of essential tips which have enabled us to stick rigorously to the $100 grocery budget.

1. Never leave home without coupons.

We never head to the grocery stores without bringing along coupons - they can really make or break our grocery budget. Though we are coupons addict, we are not swayed easily by temptations from coupons to buy more expensive branded items.

Use coupons wisely by doing online research, checking out grocery fliers, and matching coupons with items you need. Most stores will accept coupons even if the items are on clearance.

2. Research recipes to get healthy and cheap ingredients.

I know healthy and cheap may sound like strange bedfellows. How can we have the best of both worlds?

It is true that a lot of the cheap food is unhealthy. For example, meat sold for less than $1 a pound is often fattier, or not fresh. But that doesn't mean healthy food is always expensive.

These food are always on our grocery shopping list: in-season fruit, beancurds, dried beans, eggs, salmon, chicken fillets and ground beef.

3. Write down a list.

Web sites like CookingLight, and SparkPeople are wonderful resources for healthy free recipes and snack suggestions.

You can identify suitable recipes and stock up the ingredients in your freezer. Write out a list of these items you want for your weekly menu before grocery shopping. You can breakdown the list into categories including fresh, packaged and frozen to keep you from running all over the store.

Lists are essential to keep us focused during grocery shopping and also prevent wastage as we have planned for all ingredients to be used up.

4. Buy in bulk.

Before you go and grab whatever you see under the pretext of buying in bulk just to save time (making the trip, waiting in line) at the grocery shop, I have to remind you not to buy more than you can eat fresh in a week or so.

My neighbors buy a lot of food during his grocery shopping and stuff his fridge choke-full but the problem is they don't know what they have after a while. They end up cleaning out the fridge and dumping food which have gone bad every week. This is a pure waste of money.

However, learning how and what to buy in bulk can help you save lots of money while keeping your fridge stocked with veggies and fruit.

Buying items in bulk lowers the price you spend per unit drastically compared to supermarkets. The following items are great staples to keep in your pantry and fridge so that you always have food in your house.

* Frozen meat and fish - most retailers offer plenty of bagged options for meats and fish like chicken breasts, tilapia, salmon etc.

* Frozen vegetables - broccoli, mixed veggies, corn, spinach and potatoes don’t go bad for a while and are always a healthy snack or side dish in a meal.

* Fresh fruit - strawberries, apples, oranges - you can easily freeze the strawberries if you are worried about them going bad, and they make great additions to smoothies that won’t water them down.

* Fresh Vegetables - mushrooms, spinach and asparagus.

* Bread - usually offered in packs of two, freeze one loaf until you use the other. Just place in your fridge overnight to thaw or pop in your toaster.

* Canned goods - soups, vegetables, fruit, sauces are easy to keep, last forever and when mixed with the right condiments or recipe, can be delicious.

* Packaged Goods - cereal, snack bars, minced garlic, chips, trail mix, nuts, yogurt and even sandwich meat and cheese (usually in packs of two, freeze one till you use the other)

5. Keep a price book.

All the smart frugal shoppers keep price books, where they note down the best price they can get for any given item. That is what we have been doing since we started balancing our household budget.

We examine our receipts at the end of the week and get a rough estimate of the prices for the things we buy the most: cereal, milk, eggs, chicken and produce.

This goes beyond comparing prices in that store and on that day. Instead of buying the cheapest meat available, I may not buy any meat on that day if the price exceeds what we have in mind.

Try out the following tips and let me know if you can survive on a $100 grocery budget. You can slowly whittle it down if you are starting off from a high level like $200 or $300 weekly budget.

How To Save Money On Phone Bills?

Whether it's a cell phone or a landline, we have grown so accustomed to them that we fail to notice if we are paying too much every month.

Most people are paying about 16 or 17 dollars more every month than is necessary. In fact, the CUB says last year, Illinois callers overpayed their phone bills by more than a billion dollars.

That figure certainly caught my attention. No wonder phone operators love their cash cow and are reaping in profits regardless of recessionary times. But I am not keen to sponsor the fat bonuses of these executives.


Since we are already struggling to get by on our income, why not save money on phone bills? It is easy to accomplish because unlike other utilities, phone customers have many choices available.

If you have a cell phone and hardly receive calls at your home line, then the latter is surplus to requirement, especially when the only time it rings is due to cold calls from advertisers. However, handphone batteries do run out and you don't want that in an emergency.

The less drastic approach is to keep the land line but terminate other services like "Number Portability" or "Universal Service." Also, don't bother wasting money on Caller ID or call waiting if your handphone is the main mode of communication.

Now that you have cut out the frills, zoom in further into protection services. Check if "Equipment Maintenance Protection" is on your bill. Phone companies will like you to use this service as people tend to forget about its presence. But the EMP's cost is not justifiable since retail prices for phones are so cheap these days.

Next, you can eliminate "Inside Line Protection" from your account. Line Maintenance may be a good idea if you are going to move in to a new place, but if there are no problems after a month, go ahead and axe that item. You'll save over the long run without it, even if you do have to pay for a service call.

For those who use their landline regularly, cutting out the frills may instead inconvenience you. Hence, I recommend that you sign up for a suitable package of features. But before committing, you should ask your sales rep to give a dollar for dollar comparison.

Sometimes, best value doesn't always mean cheaper and may not be appropriate in your case. For example, you don't need a long distance carrier but the best value package gives you free LD minutes. Even if there is a dollar value of $5 to $10, it is sitting idly in your account every month.

I will rather go for pre-paid LD cards to make a call on the go. The rates on those cards can range from 0.03 to 0.05 cents a minute if purchased in a $20 increment. When you get low on minutes, just recharge the minutes on the card.

There is no need to buy phone equipment from the phone company. Installment billing options may be attractive, but in general the phones they offer are overpriced. In my case, I get phones for my family at Wal-Mart.

Finally, read over your bills every month. I guarantee you will find surprises from time to time (hidden charges, unknown overseas call, etc) and you must immediately clarify with your phone company.

By implementing the above steps, you should be able to save as much as 15-30 dollars a month, or around 200-300 dollars a year by cancelling some services.

Tips To Pay Your Bills On Time

I have a friend who told me he is stressed out whenever he opens the mail box because it is swarmed with bills all the time.

I was quite surprised that this guy who gets his andrenaline rush from car racing and bungee jumping is freaked out by the monthly bills. From what I know, he is single, has a steady job and doesn't spend lavishly, so his finances should not be a concern.

The main reason turns out to be his disorganized lifestyle. He told me he is already tired after a hard day's work and has no energy to attend to the bills.

So whenever he brings his bills home, they are strewn around the house (some on the kitchen table, floor, dining room, bedroom, etc) and they get buried under subsequent newspapers and letters.

Not surprisingly, even when he remembers his bills, locating them is a chore and eat up more of his time and energy. Clearly, treasure hunting is not his favorite past-time so he ends up paying up the late bills, after being issued reminders and penalties.

I guess my friend isn't alone in this situation. There are many people who get antsy from their stack of bills and cannot motivate themselves to dig in and tackle them.


Well, avoidance is not going to help matters and you end up paying more money. Here are some tips to make bill-paying easier:

1. Process Bills Immediately

Don’t let your mail sit for more than a day. Go through all the mail and have a rubbish bin ready. Keep the letters from friends or relatives, if you want. As for junk mail, credit card offers, magazine subscriptions, the bin is there or you could recycle them. Finally, the bills - pay them right away.

2. Place Your Bills In A Designated Place

Sometimes, we have pressing matters to handle and do not have time to process the mails. That is ok. Just have a designated place for all your bills.

For me, it is on a shelf in the kitchen (easier to take out whenever I have family discussions on the budget). You have to ensure all the bills are kept properly for your future reference. A lost bill runs the risk of late fees and I don't like paying more than is necessary.

3. Designate A Time To Pay Bills

For the procastinating types, expecting them to process bills right away is a fantasy. But at the very least, you have to pay your bills once each week.

Just designate a time, weekend will be good. You can choose a Sunday night before sleeping, flip open the check book, write the checks, review your bank balance and pay the bills.

4. Prepay your bills

Since you are going to take effort and time to pay a bill, why not do it for two or three months in one shot?

The cost is about the same as paying month by month but if you are the forgetful type, you avoid the chances of missing a payment. When you prepay bills, I do assume you have the spare cash though and not living from paycheck to paycheck.

5. Set Up Automatic Payments and Pay Bills Online

Set up automatic payments and consoliate your bills whenever possible. Also, nearly every major utility and bank now offers the ability to pay your bills via the web. Some even offer small discounts for using this service! Online payment is more convenient too as it saves you the trouble of walking to the post office.

6. Reduce Unnecessary Bills

Do yourself a favor by terminating services or subscriptions you no longer desire. It is not only a waste of money. You don't have to deal with the bills.

7. Ask For Lower Rates

If you haven't done this for credit cards, now will be a good time to start. You can save a huge chunk of money simply by calling and asking for a better deal.

8. Paying Bills Immediately Is Fun

When I pay my bills right away, I get such a kick it is kind of fun. The main thing is that it is a load off my shoulder as I am paying off a debt and not beholden to anybody.

Compilation of EzineArticles #1

I really have to apologize for not having enough time to update this blog as frequently as I will have liked.

Here is a compilation of my articles which I have submitted to EzineArticles. If you have some spare reading time over the weekend, just take a look and leave some comments.

1. How to Save Money on College Education and Get Free Tuition?

2. A Practical Survival Guide to the Recession

3. Five Tips to Achieve Debt Elimination

4. Writing a Financial Plan on Your Own

5. Online Coupons Turning Tide Against Traditional Couponsc