Federal Reserve to Vote on Credit Card Reforms–Finally
The Federal Reserve is going to vote this Thursday on credit card reforms that are long overdue. If you remember, MYM actually sent a comment letter to the Fed giving our opinion on the rules as they were proposed. In general, we are happy the Fed is taking action. Frankly, if they didn’t take action, Congress would have early on during the upcoming 111th Congress. But the Fed’s rules could have gone even further to protect consumers. Credit card companies have too much free reign, especially with their billing practices and interest rate changing abilities.
Below, you will see the text of our letter we drafted to the Federal Reserve. I encourage you to read it to getter a better sense of what the proposals are intended to accomplish, as well as to understand the enormity of the problem. In addition, we suggested problem areas that the Fed did not cover in their original proposals, hopefully their final rules will incorporate a few of the changes.
The text of our letter is below, to download a copy click here.
Read more »
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Have an Economic Christmas!
A few cartoons, both humerous and political, for you to enjoy as we round on the holidays. Enjoy and feel free to submit your own!
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Great DIY Home Remedies
Desperate for pain relief? Give one of these great home remedies a try…
- Eliminate ear mites... All it takes is a few drops of Wesson Corn Oil in your cat’s or dog’s ear… massage it in, then clean with a cotton ball. Repeat daily for 3 days. The oil soothes the cat’s skin, smothers the mites, and accelerates healing.
- Kills fleas instantly… Dawn Dish washing Liquid does the trick. Add a few drops to your dog’s bath and shampoo the animal thoroughly. Rinse well to avo id skin irritations. Good-bye fleas.
- Rainy day cure for dog odor… Next time your dog comes in from the rain, simply wipe down the animal with Bounce or any dryer sheet, instantly making your dog smell springtime fresh.
- Headaches… Did you know that drinking two glasses of Gatorade can relieve headache pain almost immediately-without the unpleasant side effects caused by traditional pain relievers?
- Burns… Did you know that Colgate Toothpaste makes an excellent salve for burns?
- Stuffed Nose... Before you head to the drugstore for a high-priced inhaler filled with mysterious chemicals, try chewing on a couple of curiously strong Altoids peppermints. They’ll clear up your stuffed nose.
- Achy muscles from a bout of the flu? Mix 1 tablespoon horseradish in 1 cup of olive oil. Let the mixture sit for 30 minutes, then apply it as a massage oil for instant relief for aching muscles.
- Sore throat? Just mix 1/4 cup of vinegar with 1/4 cup of honey and take 1 tablespoon six times a day. The vinegar kills the bacteria.
- Cure urinary tract infections… with Alka-Seltzer. Just dissolve two tablets in a glass of water and drink it at the onset of the symptoms. Alka-Seltzer begins eliminating urinary tract infections almost instantly-even though the product was never been advertised for this use.
- Honey remedy for skin blemishes… cover the blemish with a dab of honey and place a Band-Aid over it. Honey kills the bacteria, keeps the skin sterile, and speeds healing. Works overnight.
- Listerine therapy for toenail fungus…Get rid of unsightly toenail fungus by soaking your toes in Listerine Mouthwash. The powerful antiseptic leaves your toenails looking healthy again.
- Easy eyeglass protection… to prevent the screws in eyeglasses from loosening, apply a small drop of Maybelline Crystal Clear Nail Polish to the threads of the screws before tightening them.
- Cleaning liquid that doubles as bug killer… if menacing bees, wasps, hornets, or yellow jackets get in your home and you can’t find the insecticide, try a spray of Formula 409. Insects drop to the ground instantly.
- Smart splinter remover… Just pour a drop of Elmer’s Glue- Al l over the splinter, let dry, and peel the dried glue off the skin. The splinter sticks to the dried glue.
- Hunt’s Tomato Paste boil cure… cover the boil with Hunt’s Tomato Paste as a compress. The acids from the tomatoes soothe the pain and bring the boil to a head.
- Balm for broken blisters… to disinfect a broken blister, dab on a few drops of Listerine, a powerful antiseptic.
- Vinegar to heal bruises… soak a cotton ball in white vinegar and apply it to the bruise for 1 hour. The vinegar reduces the blueness and speeds up the healing process.
- Quaker Oats for fast pain relief… it’s not for breakfast any more! Mix 2 cups of Quaker Oats and 1 cup of water in a bowl and warm in the microwave for 1 minute, cool slightly, and apply the mixture to your hands for soothing relief from arthritis pain. $
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My Thoughts on Secret Millionaire
Fox has a new show called Secret Millionaire and is mysteriously placed during the evening when I happen to be unwinding in front of the telly. I saw the trailer for it and thought, “meh another stupid show.” After I got through the 45 minute intro, I gave it a chance. So what about it? Is it any good? Is it popular or a fleeting pilot to drain away our time for no good reason. Check out our methods to become a millionaire, as well as the trailer at the bottom…
Apparantly it is popular with the general public (the premiere had 8.1 million viewers) and I held a mild interest in it for a little while but, as always, I am playing devils advocate and questioning everything. Before I go any further with my pros and cons, anyone that watches the show: Are the dates on the checks all really April 31st, 2008? If thats the case, strange things are afoot. That would mean that the show predicted the election, the spicier parts of the economic collapse and not to mention, there was no 31st in April. It ended on the 30th. Weird (?)
What I like:
– Great idea to help others, especially in the holiday of giving. Charities are the best bet for best use of the money given…
- Nice to see wealthy people getting some perspective. Often an emotional event for them although I am getting tired of all the tears from the grown men on TV.
- Shows audiences parts of America that they normally might not see.
- Seeing the reactions of the poverty stricken receive life altering gifts. Very touching. I shudder t othink it is scripted.
What I don’t like:
– I am sooo sick watching evening television and constantly seeing grown men crying. It happens all the time, especially in the past year or so. Reality or these docudramas are the biggest culprit. Didn’t used to be like that and I am confused.
- They have the millionaires hanging around a bad part of town for only a week. I say make it a month and have them actually implement a financial support system for themselves so they can see how hard it is for some.
- I know the dollar is weak nowadays, but lets get some billionaires in there. Millionaires are perhaps too common although they could probably be found easier. I might be an extremist on this but it would be more impactful.
- Be more convincing about the under cover millionaires. Have them grow their hair out, don’t shave, and give them more accurate clothes. Taking a guy out of a designer suit and plopping him into a hoody isn’t really a great sell.
- The reveal needs to have less focus on the fact that they “lied” or led them on. Did you lie by just happening not to mention your tax bracket? Build a relationship first then feel bad about lying.
- Let’s give some serious money. $10,000 is nice but I got to thinking, thats such an inbetween number. $1,000 would cover gas for a good long while or groceries. $100,000 would jump start a retirement account that might not have been started. But $10,000? Sure I would take it but the average person is going to blow it, gauranteed.
- What are these uber wealthy doing to teach these people how to further manage the money they do have? I would much rather watch a show where there was a mentor who guided them in managing their finances as opposed to just handing over a bucket of cash while crying and then never seeing them again.
I realize the show is new, and I truly do see potential. Fox, call me and we’ll chat about a Milk Your Money show. It would be gold. :)
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2008 Recap of DIY Savings
To recap on the year, I have put together a list of some of the bigger DIY projects my wife and I have undertaken this year that have substantially saved us money. Actually, after adding up the estimated savings, we have increased our emergency savings this year by almost exactly the amount we have saved doing DIY projects. With research and patience, I think you would be surprised as to the amount of work you can do for yourself, if you are willing, that will save you plenty of money in 2009.
Vehicle Frugality
In addition to fixing (what I can) when things break down on our vehicle, I like to give my car a complete tune-up every 30,000 miles. I purchased the mechanics manual for my car this year and it took me from pre-beginner mechanic to still-know-nothing-but-try mechanic. Try I did and the savings were huge this year, as you can see below. Like I have mentioned before in posts, my wife and I still drive her Junior High 1995 Dodge Neon, which now has 181,500 miles on it. We know we are going to have to purchase another car eventually, but in the meantime, we will continue to do regular maintenance and hope the engine and transmission stay alive; otherwise, any other fix is worth fixing in my opinion. Below is my 2008 savings related to our car, not listed is finding our car this year when it was stolen when riding the bus to the subway!
- Speedometer and Odometer. Our speedometer and odometer would work until we would hit a bump and it would stop working. Or, it would stop working for no reason and we would hit the dash and it might start up again. After researching a little on Google, I fixed the problem by taking off the dash and soldering a few contacts, which fixed the problem forever and for free. Savings = $150
- Air Bag, Horn, and Cruise Control. These are listed together because they were all fixed by replacing one part in my car. The mechanic wanted $350 for the part and another $150 for labor to fix all three. Not wanting to spend the money, I cracked open the mechanics manual and found the part on eBay for $10 from a person that was parting out the same vehicle. I then bought a $10 part to remove the steering wheel (needed to replace the part) and a few swear words later, everything was fixed. Savings = $480
- Tune-up. Every 30,000 miles I give our car a tune-up. Not only do I save money by doing this myself, but it keeps our old car running pretty good. This year our tune-up included replacing the fuel filter, air-filter, spark plugs, PCV valve, transmission fluid, radiator fluid, and of course the oil. I also changed the oil every 3,000 miles at home, which doesn’t save a whole lot of money, but does allow for using better quality oil for cheaper. Savings = $300
- Brakes. My wife held on for her life after I changed the breaks for the first time, but it worked! Again, our maintenance manual gave me a great step-by-step tutorial to changing our cars breaks and rotors. Not surprisingly, the brake pads and rotors are fairly cheap, it’s the labor that gets you. Savings = $200
House Frugality
My wife and I have only lived in our condo for about two years. We purchased the unit as a foreclosure and have done a lot of work to it, of course all of the work we have done ourselves (some of it we have done twice, because we are doing it ourselvesJ). Besides renovations, we have also saved quite a bit of money this year by fixing various things in our home ourselves. Below is our list of 2008 house savings by being frugal and stubborn.
- Oven. This is a true story, this Thanksgiving our oven quit working mid-turkey. With some people over to eat and a half done turkey, we started a fire and roasted the rest of the turkey in the fireplace! Our oven, which is slightly over a year old and barely past the warranty, picked a horrible time to break down. After a little research, I purchased a part for $113 and installed it and our oven was back in business. Savings = $200
- Renovations. This year was round two of our renovations, we did quite a bit of stuff when we first purchased our condo, but then the money ran out. Now that there is money again, we are busy again. This year we saved money by doing the following projects ourselves: installed recessed lighting in our kitchen, removed carpet in our bedroom, installed wood flooring in our bedroom, painted kitchen, bathroom, and bedroom, removed popcorn ceiling in bedroom, and installed new closet hangers and shelves. Savings = 1,350
- Energy. Although hard to accurately guess the savings in this category, we have take a few steps to reduce our heat/cooling bills. We put weather-stripping around the doors and windows, put plastic around the windows that let in a breeze (winter), purchased a programmable thermostat and set it for the following schedule: (winter) 63 degrees when sleeping and when we are gone (summer) 83 when sleeping and away and 78 while we are at home. Savings = $100
- Miscellaneous. Hung our plasma TV over our fireplace, installed a new electrical outlet next to the fireplace (for TV), built and installed shelves in our storage space. Savings = $200
Shopping Frugality
Although it’s hard to argue that we saved a lot of money by shopping this year, it’s of course impossible to not shop at all. Here are a few of the ways we saved money by spending money???
- Plane Tickets. Because of a funeral, I purchased a last minute plane ticket to a small Midwest airport. Searching on Kayak, the ticket cost $1600, after calling the airline and getting a bereavement flight, the cost was $515. Savings = $1085
- Craigslist. I purchased a climbing tree stand for hunting and picked up a free printer this year on craigslist. Savings = $175
- Firewood. We used to keep buying the packages of firewood at Safeway for $5 a pop, which would basically last one night. We then had somebody deliver firewood at a cost of $80, but for the amount of wood, it was worth the deal. Savings = $40
Total 2008 Savings = $4280
Of course, these were not the only ways we saved money this year and there were plenty of times this year we probably splurged on things we shouldn’t have, but it puts a year’s worth of hard work into prospective. We were able to substantially increase our emergency fund this year, something that would never or happened if we contracted out more of our jobs or foolishly shopped. On top of savings, I learned a lot this year on car repairs and basic household projects. I’ll be fair and say I was frustrated a lot by doing many of these things, but while I’m at home working on projects, I’m not out spending!
How did you save this year? $
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13 Ways to Save Money This Winter
Frank wrote a nice article yesterday regarding things to do financially before the end of the year. Those are routine maintenance tips that should serve you well as we wrap up 2008 in a very turbulent time, economically.
Another way to save money is to limit how much you spend heating your home. Winter is vicious with respect to sucking the “bought air” out of the living space. Coming up soon will be an article about the analysis of what you should program your thermostat for optimum efficiency, so if you have ideas, lets hear ‘em because this site doesn’t stop. Unless its the weekend. Or a major holiday. We do have other lives believe it or not. :)
- Stop losing heat from the fireplace. We have mentioned this before, but it merits revisiting. While fireplaces can certainly warm a room, what about when you are not home? They can allow heat to get sucked out constantly. If you have a cold air intake, be sure its tightly closed or get chimney block.
- Put up heavy drapes. These should go up near those windows that feel drafty. Of course these windows should be addressed in their own right, if you need a temporary solution, some heavy drapes might stop the heat bleeding from the house.
- How low can you go? Frank and I often have this discussion, especially as of late where we are discussing thermostat optimization. Is there a significant difference between 67 and 70 degrees? Try turning down the thermostat 1 degree every day until you can’t stand it, then maybe turn it up one degree. Get a sweater, I dare you.
- Gain “light” interest from windows. Those windows that are facing direct sunlight should be left open during the day. Global warming might be bad for the Earth (if it exists, of course
) but its awesome for your house during the day. Its free heat and costs zero dollars. Might not be the total solution but can definitely take the edge off the load for your furnace or heat pump.
- Storm windows reduce heat loss by 50%. The newer windows are pricey of course but will for the most part increase the value of your home as well as potentially pay for themselves over time. The realy fancy ones have a sealed space sandwiched between UV glass that is filled with an inert gas like Argon. This provides the best barrier to heat for windows, and is completely transparent. These work to your advantage in the summer as well but this is focused on winter so you’ll have to do your own homework on that.
- Basement air leaks suck the heat out of your home as well. Seal them up with acrylic latex caulk or silicone around the sill plate if you can get to it. You can also use expanding spray anywhere the the gaps are larger than 1/4 if an inch. For hollow block installations, put in fiberglass insulation and seal with the expanding spray.
- Detect the draft. Black & Decker have come out with a new contraption that detects temperature variations based on thresholds that you set. ($40 at blackanddecker.com). The infrared sensors are pointed at window seals and show air drafts or poor insulation. Available January 1st on Amazon.com and Target.
- Add attic insulation. We often forget about the space at the top of our homes. Out of sight, out of mind right? Insulation has a rating known as an “R” rating, where the minimum attic should have between R-22 and R-49 (6 to 13 inches of loose fill or 7 to 19 inches of fiberglass batting). If you see that you could stand to pump up your R value, use loose fill even if you have fiberglass batting installed.
- Energy audit. This is a big one. Not only in importance but in cost. If you have followed al lthe steps above and are at loss as to where your home is losing heat, set up an appointment one weekend and get an audit. It takes about 2 to 3 hours and costs about $250 to $400. They use a huge blower on your front door that creates a negative air flow in your house to find air leaks, which are difficult to find on your own. Check with your local utility company and ask about rebates.
- Insulate pipes. These seems like a no brainer but you would be surprised as to how few people so this. Think about all the hot water in your basement water heater traveling up to the second floor going through those copper pipes. Metal conducts heat very well and this can bleed heat as well. Get flexible pipe insulation at the hardware store and slip it on.
- Store firewood at least 30 feet away. Dead, untreated wood is like filet mignon to termites, so keep that new cord of wood as far as you can stand it and perhaps prop it up off the ground. There should be no attraction for these destructive insects near your house.
- Clean your dryer vent. This is a good one. Even if you have a high efficiency dryer, do this about every six months. Restricted airflow causes the dryer to work harder, ergo drawing more amperage from the wall. Its also somewhat of a firehazard. Get a shop vac and maybe an extension. They also make mini chimney sweeps that rout out old lint.
- Turn off outside hose bibs. Find the main valve to your outside hose faucets and close it. Then go around to each one and open it and allow all the water to pour out. Might be a good time to rubber band or twist-tie some scraps of screen or old t-shirts to keep any last minute bugs out. GENIUS!
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Organize Your Finances Before the New Year
Last night I spent a couple hours digging through our finances before the years end. There are plenty of good reaons to do this a couple times a year, but for me it’s the property tax adjustments that force me into it before Jan 1.
I’m one of the few who opted out of paying my property tax through my mortgage every month and instead recieve a direct bill from the county I live in each year. I do this because I would rather put the money for my taxes in an interest bearing account so it can earn money until the amount is actually due, opposed to basically paying your taxes in advance through your mortgage. Because I do this manually, I have to adjust each year to make sure I’m putting enough money away each month to cover the end of the year bill, our taxes go up incrementally ever year to adjust for the homes value (which is assessed every three years).
The point of this post is not to bore you with the details of my property tax bill, rather to give you an example of December strategies you should be taking now, to avoid financial headaches down the road in 2009. Consider the following practices to get ready for the new year.
- Adjust IRA contributions to max out for the year.
- Use the remaining cash on employer sponsored health care pre-tax cards.
- Organize your savings distributions. Can you afford to put away more? Should more money be going to a high interest credit card?
- Start filtering money into savings to cover entire insurance bills rather than pay monthly and face a “billing” charge each month. In addition, this strategy will allow you to earn interest.
- Create a reasonable budget for the new year. You can’t start Jan 1 to begin a new budget, get a plan in place before you set your new years resolution and start the year on the right track.
- Organize/adjust your portfolio. Although a total revamp is probably a bad idea, it can be helpful to make sure your risk level is still at a comfortable level.
- Give your self a financial reality check. Examine your bills and general expenses. What can you eliminate–are you really watching HBO that costs $15/month?
- Do you anticipate a refund from your taxes this year? Start putting together responsible plans for putting it to work for you. For me, I’m not tempted to blow my refund on “stuff” when I have a plan with an end result better than the instant gratification of a shopping splurge. $
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10 Creative Uses for Coffee Filters
Who would have thought that coffee filters would be found so useful? I am not sure exaclty but I might be addicted to these random tips for around the house. If you have extra coffee filters around the house, read on and check out This Old House there are some other really awesome tips there as well…check ‘em out!
1. Prevent Rust
Place a coffee filter inside a cast-iron skillet to absorb excess moisture when it’s not in use.
2. Keep Hardware Organized
Pile nails, screws, and fasteners into separate coffee filters while you’re working, to keep them from rolling off the table.
3. Make an Air Freshner
Place a tablespoon of baking soda in the center of a coffee filter and tie it closed with twine. Stash the packet in the fridge to absorb odors.
4. Keep Windows Clear
Spray panes with glass cleaner, then wipe away with a doubled-up coffee filter. No lint, no streaks.
5. Fix a Wobbly Leg
Fold a coffee filter several times, cut to size if needed, and tuck it into the space between a loose table leg and the tabletop.
6. Strain Solvents
Got paint thinner with residue floating in it? Strain it through a coffee filter into a clean container, then safely dispose of the filter and residue after they’ve dried out.
7. Make Houseplants Less Messy
Line flowerpots and planters with coffee filters to stop soil from falling through the drainage hole.
8. Absorb Spills on Upholstery
Use coffee filters to blot liquids off sofas or fabric car seats. They won’t leave lint behind like paper towels do.
9. Prep a Stain
To darken a stain, leave the can open for one week, then strain the stain through a coffee filter to remove surface dust before applying it.
10. Shine Shoes
Use a coffee filter to buff your favorite pair of loafers (or heels). For brown shoes, a used filter will work—just let it dry first.
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Still Time to Qualify for Saver’s Credit at Tax Time
The saver’s credit (not a deduction) comes in the amount of $1,000 for individuals or $2,000 for married couples, however the actual amount will be adjusted based on your filing status, adjusted gross income, and your other retirement contributions. The credit can be filled out using tax form 8880.
Available only for low and moderate income earners (qualifications are below) the saver’s credit rewards those who are taking steps to save for retirement. The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and 401(k). To be eligible for the credit, you must make voluntary contributions to your retirement plan by April 15, 2009 to set up or add money to your plan and still receive a credit. So there is still time for you to qualify for the credit!
This is not a one-time credit, because of an Act of Congress in 2006, this credit has been made permanent.
The Credit Can Be Claimed By:
- Married couples filing jointly with incomes up to $53,000 in 2008 or $55,500 in 2009;
- Heads of Household with incomes up to $39,750 in 2008 or $41,625 in 2009; and
- Married individuals filing separately and singles with incomes up to $26,500 in 2008 or $27,750 in 2009.
Other Qualifications
- Eligible taxpayers must be at least 18 years of age.
- Anyone claimed as a dependent on someone else’s return cannot take the credit.
- A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.
- Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2008, this rule applies to distributions received after 2005 and before the due date (including extensions) of the 2008 return. Form 8880 and its instructions have details on making this computation.
for more information on the credit visit IRS web site.
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2008 Top Financial Web Sites
Kiplinger recently released their top picks for 2008 best investing and financial services web sites. Coincidentally, they picked their own site for the best tax calculator. Take a look at the following sites, the financial fundamentals everyone should know is spread amongst them all!
Bonds: Investinginbonds.com. A one-stop shop, this free site provides historical prices and call information for specific issues, plus a wealth of market data.
Stocks and funds: Morningstar.com. For copious commentary and statistics on both stocks and funds, this site is hard to top. The juicy stuff will cost you $159 per year for a premium membership.
Credit reports: AnnualCreditReport.com. Forget copycat sites. This is the official Web site where you can get a free report from each of the three credit bureaus once a year.
Credit score: myFICO.com. Buy your score from one credit bureau for $15.95 or from all three for $47.85. Plus, get advice on how to raise your score, and use the site’s EZ Error Correct system to dispute mistakes.
Tax calculator: Kiplinger.com. If you got a tax refund, give yourself a pay raise by using our easy tax-withholding calculator.
Social Security calculator: http://www.ssa.gov/estimator. Type your name, Social Security number, birth date, birthplace and mother’s name into this secure site, and it will show your estimated benefits based on your up-to-date earnings record.
Health insurance: eHealthInsurance.com. Provides immediate quotes for most major health insurers and compares policies. For personalized attention, call 800-977-8860 or find a local broker through http://www.nahu.org.
Health insurance: Coverageforall.org. Offers strategies for finding coverage, especially for people with medical conditions or modest incomes.
Medicare: Medicare.gov. Chock-full of detailed information about Medicare, with excellent tools to help you pick the best Part D plan or Medicare Advantage policy based on your specific medications and health condition.
Life insurance: AccuQuote.com. An easy way to get term-insurance rates from many of the top companies. Call 800-442-9899 for personalized help, especially if you have a medical condition.
Life insurance: Insure.com. Use this site to see the detailed criteria you must meet to qualify for each company’s term-insurance rates.
Auto insurance: InsWeb.com. Lets you compare price quotes from several major insurers (the number varies by state). Also a good resource for money-saving tips on every kind of insurance. For personal help, contact an agent through the Independent Insurance Agents & Brokers of America.
Homeowners insurance: AccuCoverage.com. For a fee of $7.95, you can calculate how much coverage you need. Plug in data about your home’s age, building materials and other details, and get an immediate estimate of its replacement cost.
Customer Service: http://Naic.org/cis. The National Association of Insurance Commissioners maintains complaint records for each insurer in every state. Focus on the complaint ratio: the number of complaints for every dollar the insurer collects in premiums.
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When Will the Market Improve?
We are rounding out the end of 2008, which will be known as having one of the worst economic times in the history of money. There are few schools of thought as to know what to do in times. Some people sell off all their shares (as seen in the market lately), while others see this as a time to buy. People who involve themselves in massive sell offs might be trying to justify their losses by looking towards the benfits of the write offs given from the government based on losses. Another reason might just be the complete lack of consumer confidence and more and more people are afraid that what little they have left can be better protected in cash or other more stable vehicle structure. Whatever the case may be, this is the very thing that is driving everyone else.
Change is the investor’s only certainty.” - Thomas Rowe Price, Jr.
The flip side to this is that it is a fine time to buy. Shares almost across the board are at some of the lowest we have seen in years. Buffett himself is famous for saying: “Be greedy when others are fearful and fearful when others are greedy.” Seems to be working for him. Just a little bit.
Whether you feel that the market’s tide will turn in January (due to Mr. Obama, or the simple idea that we can’t possibly see a 6,000 DOW) how can you know when the bottom is going to be? We are not advocating, or insinuating, that we know how to time a market, especially one like this, but there are a few things to look at when trying to forecast a little bit. We know of a few time tested trends to weigh when looking at economics for the country. Lets take a peek…
- The TED Spread. This is the difference between the interest rate that the banks borrow from one another and the rate on 3-month Treasury Bills. (Its called a TED Spread from T-Bills and the EuroDollar futures, by the way.) The wider the TED Spread, the more skittish the banks are about dealing with each other. Right now its 2.18, which is pretty high. When we see it below 1%, things will start looking up.
- Watch Real Estate. Traditionally, about one months worth of the number houses on the market can tell quite a bit about the state of the prices of homes in the market. Six months worth of “inventory,” or number of homes is a pretty good number for the U.S.; of course, right now, we have 10 months worth of inventory. Thats not good. Take a look here.
- Unemployment Rate. Not very far from where Frank and I work is the Labor Department. Every Thursday or Friday, they release data about how many people file for unemployment benefits. Lately, it has been running around 450,000 and 500,000 a week, nationally. This is high, and once we see this come back at least 400,000 we will feel better about the over all factors for the market having at least more stability. Here is BLS’ report.
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Auto Industry Lowers Prices During Hard Times
While the automakers are on captiol hill begging for a bailout, consumers are made to belive that automobile prices are at an all time low. Some reports have cited cars are now selling at a 20-30% discount and 0% financing is making a comeback. Does this mean it’s time to buy?
In my opinion, the 20-30% discount is very tempting, but still doesn’t sway me to purhcase a new automobile. As we have said before, right when you drive a new car off the lot, it loses value, which puts your note on your car worth more than the car itself. Pherhaps, if you are lucky enough to find a 20-30% discount, this will counteract the drive off loss.
Keep in mind, if you find a dealership offering a 0% financing, they will many times consider this the discount and the car itself will still be priced high. Of course, this is all assuming your credit is good enough for such offers. If you are lucky enough to come into a deal with cash, you should see the sticker price fall.
In general, you will probably see a new car’s price drop around $3-4k with these advertised discounts and you will have a very hard time finding a new car under $10k. Considering all the variables, I still believe the value is in used cars. Yes, new cars have reduced a little in price, but they should, they are incredibly overvalued. Used cars will too likely see reductions in price if new cars continue to drop. I would much rather purchase a used car with approximately 70k miles for, depending on the car, $3k-7k. This type of car will give you a mode of transportation (remember, this is really all cars are) for around 10 years or more. This same type of car brand new will likely cost you $10-14k in addition to interest payments on a loan. $
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Thanksgiving Expenses
The average price per family to make Thanksgiving dinner is approximately $44.61. This breaks down to about $4.61 per person, assuming a meal is created for 10 people. I found this estimate to be pretty close to what I paid last night at the grocery store last night. However, I’m assuming this estimate doesn’t include alcohol, which for some will cost $44.61 for a single bottle of wine.
I have noticed from past years, that shopping later rather than sooner has actually saved me money when preparing for the big thanksgiving meal. Closer towards Thanksgiving, grocery stores tend to mark down their festive foods because they order such abundance in preparation for the holiday. Turkey’s for example were marked down to $0.49/pound last night, which is more than half of the price it originally was. Other on sale items were stovetop stuffing, gravy, canned vegetables, ice cream, and pies (I sense a theme).
What other consumer related activity do we relate to Thanksgiving? I’m glad you asked, it’s shopping. Although this Friday is expected to be less than previous years in terms of spending because of our economic conditions, people are still going to spend like crazy this weekend. The market can be beneficial to consumers if we look for the best possible bargains. I would suggest looking when it comes to in store shopping. You still have time before Christmas; there is no reason to spend like crazy on this Friday. Get a good idea of what you want to purchase, and then go home, and look around to where you can find the same product for less (usually this will be online). For me, I’m going to do a lot of my shopping through my credit card company, who has teamed up with multiple stores. They are going to be offering a crazy 20-30% cashback on a variety of purchase, check to see if you have access to similar deals.
Entertainment is another expense families are faced with over Thanksgiving. Many families go to movies; I recommend renting one instead if this still can fit your tradition. Wednesday is considered one of the biggest bar nights of the year, and perhaps many of us will find ourselves at one. Call your favorite pubs and see who will be offering the best deals; you and your friends/family will be thankful you called.
No matter how you will be spending your money this Thanksgiving, MYM wishes you a great Turkey day and we hope you can milk the most from your time off, leftovers, and shopping dollars. $
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Black Friday Deals
As the mighty Turkey day rolls over and goes to sleep, keep in mind that some of the best deals of the year are the very next day: BLACK FRIDAY!
The term was originally coined due to the fact that retail stores were trying to pump up their sales and “get into the black” financially, something we all aspire to. (Too bad we don’t all have multimillion dollar businesses to have sales with…)
The more difficult issue for this sort of thing is finding what deals you want to shoot for…I have the answer:
BlackFriday.info provides every deal you could want and refreshes and updates regularly so you will always know what to look out for. You can give them your email and be notified as new deals are posted, get coupons, register for an online shopping list, get online shopping tools, and much more!
Check them out and be sure to do this early so that you are not enticed by deals that pull on your “trigger finger” before you are ready. Remember-make conscious decisions about what you are spending your hard earned money on!!
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No More Pricey Pedicures with PedEgg
Andrea wrote us yesterday wanting to let us (and our readers) know about a way to save money by not getting expensive pedicures. She suggests a PedEgg to remove dry callous skin (eww) and better maintain your tootsies for a low one time price of $9.99. These can be found at Bed, Bath & Beyond, Walmart, Target and CVS and might make a great stocking stuffer for that person who loves the indulgence of foot pampering.
This “ultimate foot file” has a battery operated motor that vibrates the skin on your feet, catches anything that rubs off and fits well in your hand. Another handy accessory might be the Pampered Toes spray available as well.
Check out the instructions, and keep in mind that while it sounds kind of goofy (and maybe a little gross) it still has to be cheaper than having this done by a “professional” at a pedicure salon. Commercial and “Try Before You Buy” from a news station below. Consumer Reports also weighs in.
If you are feeling skeptical or find this sort of thing completely “out there” and you have read down this far, I have a little bonus suprise for you. Hilarious vid of MoRocca and his PedEgg, enjoy!
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