Tuesday, September 29, 2009

Better To Sugar Coat Corporate News In A Recession

Better To Sugar Coat Bad News
We keep blaming politicians and economists for not telling the truth and churning out fictitious statistics.

But when you are in danger of losing your job, you may actually appreciate your boss sugar-coating the bad corporate news...

Saturday, September 26, 2009

Mayor Issues No Chase Policy To Save On Insurance

The mayor of 14 years said she issued the order after a city officer suffered a foot injury while chasing a "guy who had some crack on him" and had to be out of work for several days on workers' compensation pay.

Noting the suspect wasn't stealing or breaking into a home at the time, she said she didn't consider the drug possession a crime, and said the town of 2,100 couldn't afford the increased insurance costs. Though the ban applied only to foot chases, she said officers also totaled two town-issued cars in a month.

Well, what can I say when such an order is issued? The police's job is to go after criminals and bring them to justice.

Just because of a foot injury and insurance claims, the entire police force is being hampered in their work by this bizarre order.

Wednesday, September 23, 2009

Binge Years Over, Make Do With Modest Living

Binge Years Over, Make Do With Modest Living
Frugality is entrenched in Americans' mentality right now; for how long... I do not know but I hope it last, as living well within our means is essential in a sound financial plan.

Ben Bernanke believes the recession is most likely over. To the many Americans who remain unemployed, that is scant consolation. The Fed can pull the wool over our eyes that economic outlook has improved but I am not convinced that the binge years will return.

The financial crisis has ravaged the US Dollar and tarnished the credit worthiness of the US Government. Hence, I have little confidence in government pensions and social safety net. It is best if we devise our own retirement savings plans.

Nevertheless, retirement planning is going to be more challenging. Frivolous, uncontrolled spending must be curtailed. Even if you have a steady job now and earn a reasonable income, it is prudent to adjust your financial goals and start living modestly. By that, I mean shunning materialism and taking pleasure from simple things in life.

Instead of living in a mansion, what is wrong with staying in a 1000 sq ft apartment? When I was little, I remembered cooping up at a relative's house with my parents and the kids sleep two or more to a room. There were no fancy baby clothes or shoes but only drappy hand-me-downs.

That didn't make my childhood any less happy. I am not tempted by material goods because my past makes me appreciative of the fact that earning money is not easy. Sometimes, I wonder why people feel the need to buy many pairs of shoes, ties, or clothes - only to wear it once or twice (sometimes not even opening up the box at all).

That is not the way to spend money, especially when you don't have a million dollars in the bank. All the money is actually coming from credit cards, home equity, etc.

If you are guilty of reckless spending and are now crushed under the massive weight of debts, it is no use beating yourself silly.

Review your expenses, savings, income and the amount of money you need in the future. Figure out what it takes to live modestly for a month. You’ll need to cover your regular bills, such as, mortgage/rent, utilities, transportation, food, clothes, etc.

Once you have a figure for your expenses, say $500, try making do with $300 or $400 instead. Take that as a challenge for modest living. Even if you don't succeed on the first try, at least you know where you have failed and can improve on it next month.

Living modestly usually involve battling impulse buying and various motivations to spend: advertising, friends, etc. It often means taking a little more time to find what you really need, and not what you desire. And you have to be content that what you already have is good enough.

If you do away with Starbucks coffee, downsizing your home and holding off new purchases (clothes, gadgets, shoes, etc.) until your stuff are worn out, that is a lot of money you can save every year. The savings from living modestly can be placed in a Roth IRA, bonds or equities.

Keep your sense of balance and sleep tight at night by living modestly today.

Sunday, September 20, 2009

Recession Likely To Be Over?

Recession Likely To Be Over

Ben Bernanke said the economy likely is growing now, but he warned that won’t be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising.

“From a technical perspective, the recession is very likely over at this point,” Bernanke said in responding to questions at the Brookings Institution. “It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was.”

Source: MSNBC

Has Ben Bernanke jumped the gun in declaring the recession is likely over? I think it is callous for Bernanke to make such a statement when 9 million people are still underemployed.

Will the underemployed be able to secure new job soon that will utilize their expensive education and core skill sets? Will the cash registers of retailers start ringing tomorrow now that the outlook is "brighter?"

Don't bet on it...

Thursday, September 17, 2009

Is The Economy Out Of The Woods?

Economy Out Of The Woods?
From the multitude of economic reports, it seems the economy is stabilizing and we are finally out of the woods. Well, let's hope we don't go from here and drop into the abysss later on.

Monday, September 14, 2009

4 Tips To Save Money On Gift Giving

The festive period is a few months away which is a time when our household budgets are strained by all the gift buying and celebration. Since the recession started, my wife and I have started to plan our gift giving early in the year.

The process is similar to planning for a household budget. We indicate the amount to spend on gifts, for whom, as well as where this money is going to come from. There are no hard and fast rules - we adjust our gift giving in the event of upcoming weddings and anniversaries.

Buying gifts can cost a bomb. You need to plan properly in order to save money and not ruin our finances on excessive credit card expenses.

Here are some money saving tips to support your gift giving.

1. Redeem Rewards - If you have been swiping your credit cards throughout the year, it is a good idea to redeem your credit card rewards as a complement to your gift giving during the festive period. We have two credit cards that earn us cash back or rewards that can be used to redeem gifts.

There are also product rewards to redeem gift cards or other products. We have used the My Coke Rewards program to redeem points for special gifts. Look for these types of promotions on items that you frequently purchase.

2. Clearance Sales and Special Promotions - Flip open the newspapers and there are always advertisements of clearance sales. We do not stake out all the clearance sales but when there are attractive marked down prices, we head for the retail stores.

Some of the products we purchase include toys, board games, clothes, books, all of which come in handy during birthday parties for our kids.

3. Accumulate Extra Change - We keep our loose change in a jar and place them into our savings fund every month. It is somewhat like "extra money" which can be used to purchase gifts late in the year too.

4. Re-Gift - This means passing on a gift which you receive but you have little need for. Passing on gift cards is fine but some people don’t believe in re-gifting physical items, because it is disrespectful and unappreciative to the original giver.

There is a possibility that you may get fewer gifts if your friends and relatives know that such presents, which they spend money and time shopping for, are passed on to strangers. But if the gifts are lying around the house, they could end up in the dumps or being sent to the Salvation Army, come spring cleaning time.

I think it is too wasteful. Hence, to preserve the gift-giving spirit, I prefer re-gifting, than throwing stuff away.

Friday, September 11, 2009

Debtors Revolt Watch

This lady is leading an army of revolters into the line of fire against the banking system.

It is high time consumers take a stand and let the lenders sit up and take notice.

For how long should we endure predatory terms of financial institutions and allow them to take taxpayers' money on one hand while awarding fat bonuses amongst their cronies?

Enough of riding roughshod over consumers. What do you guys think?

Tuesday, September 8, 2009

Beware Of Debts And Excess Leverage

Beware Of Debts And Excess Leverage
Six months of stock market rally... holly shit! The bears (including me) have highlighted an impending drastic stock market correction for weeks but the stock market continues to defy gravity.

I know people are more confident when they see their investments doing well, regardless of the well-being of the real economy. However, such over-confidence can lead one to take on more debts than is prudent to finance purchases or investment.

To be sure, consumers and investors are not soley at fault. Banks, credit card companies and brokerages are eager to feed this frenzy by expanding our overdrafts, credit limit and margin accounts.

But excessive leverage is dangerous and will destroy our financial future. To get our finances to grow in a healthy manner, you must eliminate the weeds (debts and its associated interests cum fees) in our financial garden.

I believe many people realize the dire effects of debts, yet they willing become enslaved to financial institutions which offer credit cards and credit lines with low teaser rates and entice us to pursue extravagant lifestyles, way beyond our means.

Sometimes, I get really upset that our entitlement mentality, thanks to the media, politicians and unscrupulous lenders, has become so deeply entrenched that we believe we can always get what we desire right away, without paying for it.

Now isn't that naive? The banks and credit card companies are in business to make money, not to do charity work. Thus, all their easy money come with a heavy price to pay... eventually. There is no free lunch, period.

If we don't pay up, the only way is to kick the can down the road and burden the next generation with our reckless spending. The financial institutions are more than happy to let our debts snowball and to see us slog like hell to contribute to their profits in perpetuity.

To avoid the vicious debt ruthole, you must be disciplined in paying off debts as soon as possible. But you should not do it too aggressively such that your emergency fund is neglected. An emergency fund is crucial even as you keep track of current liabilities, so that your ability to make good on payments is not impaired even if you lose your job.

You should also get free credit reports and see whether there are any inaccuracies reported. If so, dispute the problem in writing and get it resolved. A drop in your credit score of just 50 points will cause your monthly payments to spike and even restrict your credit limit.

Next, examine your credit card and loan statements to see what interest rates you're paying. Do some comparison shopping for more attractive interest rates and then make a few phone calls to negotiate your existing rates.

If the phone calls are not fruitful, you can move your outstanding balances from higher interest cards to a lower interest card. Or pay off high interest credit cards with a lower interest loan.

These actions can save you hundreds or thousands of dollars per year, and only take a few minutes of your time to initiate. But you still get nowhere near eliminating your debts if you don't change your mindset and lifestyle.

Stop piling on more debts if you are serious about eliminating debts. You only dig a bigger hole whenever you charge new expenses to a card and accumulate your outstanding balances which cost you the most money in fees and interest.

I believe the the economy will still be in deflation for the short term, even though the Federal Reserve has been printing money furiously. And there is still a strong possibility that the economy will suffer a double dip and the credit crunch worsen in 2010.

But whatever happens, we can always cope with interest rate hikes or withdrawal of credit lines if we pare down our debts and get our emergency fund up and running.

Saturday, September 5, 2009

Money Saving Scams In College

I am not sure how helpful these tips will be for you in terms of saving money.

In fact, some of the tips are pretty "slimy", for example, sneaking into events, avoiding parking tickets, hiding stuff in dorms, getting free snacks, fake IDs, getting out of speeding tickets (you shouldnt' speed in the first place) and more.

But still, there is plenty of educational, if not, entertainment value in this video. Check it out.

Wednesday, September 2, 2009

Make It Fun To Save Money On A Tight Budget

To save money requires that we made sacrifices and adopt lifestyle changes. As they say, no pain, no gain. But that is not to say saving money means there is no more fun for you.

There’s plenty to do out there that won’t cost you anything at all. You just need some creativity and rediscovering activities which you enjoy when you were little.

Here are some tips to have fun saving money while on a tight budget, say $50 in your wallet.

1. Rent movies.

I love going to cinemas for the occasional blockbuster movies but if $50 is all I have, then I will rather sign up with Netflix. They allow a free 2 weeks trial period and after that, you can choose your own plan.

You can have up to 3 movies out at once with no late fees, and each plan is under $20a month.

In terms of entertainment value, it may lose out to a cinema, but you get to cosy up with your partner in the privacy of your home. There are no jabbering from inconsiderate people who interrupt your enjoyment of the movie.

Or you can even plan a whole party with your friends and have a movie night. Host a potluck dinner for your friends - ask them to bring their favorite dish and you’ll end up with a nice variety (bonus if everyone brings dessert!)

2. Check out libraries and museums.

Museums offer discounted or free admission on certain days, so it is great for a family outing. You get to increase your knowledge and appreciate rare artifacts and exhibits without spending a cent. As for libraries, it is one of my favorite pasttime as I can borrow books and videos for free.

3. Go bargain hunting!

If you are really bored, why not go outdoors on a bargain hunting trip? You’ll be sure to come across some good deals and rare finds. Auctions can offer some good deals, too. Just be prepared to go a little higher on price to compete with other bidders.