Deals on Cars, Furniture Seem to Be Exploding

Boy I’ll tell you, if you’re a bargain hunter at heart, like I happen to be, then the economic turmoil that has turned everyone into a barterer, businessmen and women and consumers alike, then you are in bargain heaven lately. And you’d better enjoy it while it lasts, because I have a hunch that after this year is over, we’re not going to be seeing such cheap prices on consumer goods, coupons, special events and incentives like we’re seeing now since the economic recovery is starting to show some tiny glimmer of hope for the current situation.

My boss at work got a terrific deal on a used car, with low mileage, that was fully loaded. It was a black SUV that is a great brand name, and she got it for a bargain basement price because the dealer really wanted to unload it. She turned in her leased vehicle so that she could buy a car this time (always a smart move since leasing usually makes you lose your shirt at the end with the over mileage fees and the fact that you don’t own anything when the lease is over). She really made out, and I must say that since I paid full price for my SUV four years ago, I had a bit of envy.

However, I had a huge wave of relief when I was able to pay my car off finally this past month. It was great to get that title in the mail, saying I’d paid off my debt on the car and that I would be free and clear of any forceplaced insurance (which wasn’t something I’d had anyways). Furniture is another consumer good that we are seeing excellent prices on right now .

For example, we are heading out today to a local furniture store that does a fairly good business in the northeast Ohio market, because they are having dramatic price reductions on a lot of their furniture, and they are also having about fifty percent off of high end mattress sets. I could have never gotten these deals when the economy was moving along smoothly, especially on the higher end furniture they are selling, so I figures that although money is tight for us right now, I can take advantage of their zero financing for a year and finally get our guest bedroom furnished so our guests don’t have to be sleeping on a twenty year old bed anymore

Goal and Priority Setting in Your Finances

Sometimes, when I look at the plethora of goals I have for my financial future, as well as the many times conflicting goals that I have for things like home improvement, self improvement, vacations endeavors, business endeavors and other various goals that your need money to reach, I wonder how I’m ever going to prioritize them so that they can all get done within a reasonable period of time. It is hard for most people to prioritize their financial goals and other longings, unless they happen to be a millionaire many times over (just being a millionaire these days doesn’t seem to quite cut it).

I figured out that my timeline for one of my major goals was going to be five years. This timeline is fairly doable, since it has to do with paying off our secondary mortgage, the one we got to make up for the downpayment on our house since we decided to use the money we saved up for the myriad of furniture we needed to furnish our new home, plus the closing costs, etc. that we needed to pay to get in the home, hookup fees and so on and so forth.

I set this as a priority because paying this loan off will allow us to refinance our primary mortgage, which will save us thousands of dollars in mortgage interest over the years. I had to use another factor to determine this priority, and that was the additional savings in interest, so this goes to show that sometimes you need to use other factors in your decision making when determining which of your personal goals involving money in one way or another should go above the others.

In order to pay the additional principle on the home loan, we of course had to forego other goals, like putting a deck on our home, so that we could save money first rather than building more interest upon interest since we would have had to take out a home improvement loan to get this done. Another goal that came in place over our deck and other home improvement desires was to pay off some lingering credit card debt by consolidating and paying off several cards at once. By doing this, we saved all that revolving interest over several years, which puts us in a better financial position for the future.

When you make decisions about your goals, try to prioritize based on what is going to save you more money over the long haul, or what is going to allow you to put more money away for your future or for emergency savings and things of that nature. If you’re making decisions solely based on emotion, like taking that 5k vacation to the Pacific, then you could seriously regret it in the near future. Things like vacations feel great while you’re on them, but if you’re neglecting things at home, then the tension will just still be there when you get back, trust me!

Good and Bad Financial News, All in One

Well, this week there is some good news and some bad news for us as American consumers. We’ll start with the bad news first, which is more so bad news for the retailers out there, but we also know that what’s bad news for businesses also translates into bad news financially for we the people. The news for retailers is that the latest quarterly sales numbers are lower than expected, even considering the current recession we’re in. They were forecasted to be a little higher than what they actually were, so this adds a little more of the doldrums back to the current state of our economy.

The day this news hit was April 14th, the day before taxes were due (hopefully you got all your ducks in a row on that one, seems like everyone I know was under the gun with taxes this year), and Wall Street reacted accordingly, with a dip at the end of the day even amongst what some are calling a bear rally that’s due to end any day now if you believe that.

These numbers are telling that we still have a ways to come out of this mess, and it also shows the psyche of the American consumer, that we are still all very fearful and holding on to our money for fear of what it still to come. This of course perpetuates the sinking economy, but we all know that by now, probably all being schooled in at least economy 101 by now. Of course, I can’t stop getting the deal emails and great coupons, so if you have the money to spend it’s a great time to buy large ticket items. The latest one I got was from World Market for a 25% friends and family event – that includes furniture and decor, which is pretty good.

Now finally for the good news. The good news is that the gas prices are being forecasted to remain pretty low over the whole summer, which I believe is when gasoline usually goes up in prices because of a higher demand and more travelling by car. Hopefully it can stay around two bucks a gallon as long as we need it to, Lord knows we need all the relief we can get with the way things are going. There’s really no forecast beyond summer, but I guess I feel good that at least we know we have until then to enjoy these lower prices.

Another Tax Credit Coming Our Way?

I was surprised to learn, because there hasn’t been much discussion about this facet of the stimulus package the Obama administration has set forth, which is ironic, because it by far would affect the most individual people on a direct basis, where many working taxpayers will get extra money in their paychecks simply for working, and the credit will vary per person and their particular situation, but the amount will generally be small. The idea of the credit is that “it pays to work”.

I’m not sure that would really work for the millions that are jobless right now, and that’s the first thing I thought about to be honest, I felt bad because of the name of it, I assume it only works if you are presently employed, not a good thing for those that have been laid off at all. In short, the upshot is that people filing as single will get around fifteen to twenty bucks additional per pay check, and married people filing as married will get about twenty bucks per pay each.

Even those with higher incomes are eligible, singles making and adjusted gross income of up to $75k and couples making up to $150k together. The idea is to back out some of the ordinary taxes that would have been charged per paycheck to make it easier to have more spending money, so that FICA amount that you see on your paystub every other week or every other week will be modestly reduced. It also works as a credit, so those that did not make enough to pay taxes may still get the money.

Those that are eligible for pensions or social security benefits probably will not be getting this small tax credit though. This brings to mind a conversation that I just had with my optometrist as he was putting numbing drops in my eye for the glaucoma test. He told me about several of his friends that were thinking of retiring in the next few years now were putting it off or were seriously considering finding another job for those years. He also told me another sad story about a friend of his who bought a condo in Florida as an investment to help pay for some things for his kids, now grown, and also to give to various charities.

The condo sadly only went for less than half of what it was valued at in this market. This is just an example of how we Americans are being hit from all angles by this prolonged and painful recession, and I’m tired of hearing awful stories all the time. We need hope and we need it fast!

Changes Coming In July 2010 on Credit Cards

There are quite a few changes coming on a bill that was passed (a piece of legislation) that puts a lot of restrictions on credit card lending that were never there before. Some may think that this new list of restrictions may be bad for the economy in that it makes credit card lending more expensive for the credit card companies and therefore less desirable for them to market and grant credit to a lot of consumers and stalling the economy further, but there are countless others who think that this type of legislation has been a long time coming and is overdue, to protect the consumer from themselves and also from predatory and unfair lending practices in the process.

Among the changes to credit cards coming in July, they will not be allowed to grant credit cards to anyone under the age of eighteen, nor market them this way. This means that the government will be protecting young people with immature planning and fiscal responsibility from making a mess out of their financial future right from the get go. I agree with this one. I lived without a credit card til I was eighteen, and even then I used it way too much and got myself in trouble, whereas when I matured I realized this was no way to live and paid it all off, so I see why younger people need to be protected from making the same mistakes that they potentially can never climb out of again.

Another change is that charges for payments over the phone will be banned. Right now, many credit card issuers will actually charge their customers an additional fee for doing the responsible thing and making their credit card payment over the phone. I mean, that’s ridiculous, and that should be banned if you ask me.

It would also put a stop to the practice of increasing interest rates for those that have a late payment or two and also put certain restrictions on jacking up the monthly amount due when someone’s rates go up, all of which are consumer protection measures. As to whether they will work or whether they may make getting credit a lot harder, time will tell.

Loan Defaults Hit High

As of early April, there have been skyrocketing numbers being reported as to how many consumer loans are being defaulted on and how many are also more than thirty days late. Since this is just what some economists think is the beginning of huge job losses, these numbers very well may rise even more in the coming months and even the whole next year or so.

The numbers of unemployment and jobs lost in April was also staggering, with almost 700,000 more people losing their jobs in the latest report, which depending on where you read, was less than or greater than expected (who can keep track any more, it seems like even our different media outlets are always conflicting on these numbers). Because of this latest increase in jobs lost, lenders expect that their defaults will again go up and reach new heights, and many lenders are still gun shy about lending for this very reason. Ironic, because this recession is really just prolonging itself by the reactions to the worsening economic news.

Top economists say that the greater the job losses become, the more severe the economy will contract, since creditors will be holding customers to way higher standards, and also will be losing money hand over fist due to defaults and late loan payments, missing out on both principle and interest payments. It is said that this last quarters report was the highest in defaults since the numbers started being tracked in 1974 (hey that’s the year I was born – fun fact).

When they talk about consumer loan defaults, they mean a lot of different things. For one thing, it’s auto loans that are made for the purchases of new cars (this one is fairly common, especially considering psychologically how people don’t think a car is necessary when it comes to stripped down necessities), credit cards, lines of credit, store credit cards and other consumer related credit extensions. They don’t think that the creditors will see any form of relief until 2010.

What’s the Bill for the Bailout?

I just read an article that, while it may be from a skewed news source (there’s a particular news channel and online news outlet that is particularly partisan on the side of the GOP, ehem), is pretty staggering when they put the bailout terms into perspective, as far as how much it’s really going to cost each American family or household in the long run.

When the bailout is all said and done, which will not be for several months now after the tallies are all done, it is said that the total payout to troubled banks, car makers, and other financial institutions, including the bailout package which includes everything from infrastructure investments to Americorp recruiting for volunteer workers and other social programs, supposedly the tab will be at an estimated 9 trillion dollars.

That’s right, I said trillion. To put this into perspective, and again I’m not taking accountability for these figures because I don’t know how accurate they are, supposedly each American household’s bill for this massive undertaking will be about seventy nine thousand dollars – that’s right, in numbers now that’s $79,000, or thereabouts. That’s a staggering number. I had to laugh when I remembered back to a funny email I got.

It was one of those “we’re americans and we’re pissed” emails that I get and usually tend to ignore since it’s usually just someone puffing on about illegal aliens taking our jobs, and it’s usually started by someone who’s just mad that they can’t get a job. This gem was about the similar topic of how much this bailout is going to cost American households, and how it would be better if the government just took that same money and divided it amongst these households as a sort of bonus. Yeah, like, here you go, just for being an American, here’s close to eighty grand, now do your job and go out and spend it and revive the economy.

That’s all well and good, however, that’s the reason that people who start emails like this aren’t in charge of economics. It would still be artificially stimulating the economy. It’s money, coming from nowhere, and who’s to say that we’d do the right things with it anyways? I know, I sound really pessimistic, but who does know exactly what will work in a situation like this? We’re all human, and unfortunately we don’t have some super computer to figure this one out for us, we have humans in charge of the country, and we just have to hope they’re making the best judgement calls they can so we can get back on track with minimal pain.

Even Daycare Centers Feeling Squeezed

Well, when I read this one, I thought it does make sense, although it’s not one of the first businesses you typically think would be threatened by a severe recession, but coupled with high unemployment numbers, you’d better bet you’ll start seeing daycare businesses suffering. And why not, since many of the work force are parents who have to pay daycare businesses to keep their children during the day while they go off to work and make the money for the household?

With many daycare agencies and businesses making up to a grand a month for watching people’s kids during the week when they are at work, some agencies have had to drop their prices to keep people coming, and some have had to even close their doors because their enrollment has gone down too much to make the business a profitable one. Daycare, once a booming business, in many states and towns, has become a virtual ghost town for customers and they are suffering, like most other businesses in this increasingly barren economy.

This domino effect has been happening to daycare centers just in the last few months, as the effects of unemployment and reduction in force, reduction in pay and expenses has taken it’s toll on the American family. Sure, people are saving on what can many times be expensive daycare, but they are also out of a job and having to cut back in many other ways since their income has dried up. Unemployment benefits pay for a percentage of your pay, and not even for more than a few months usually, so when that dries up, then there really are some problems.

It’s a shame too, because kids being at home in these increasingly stressful family environments is good neither for child or parent, and the effects will most likely be seen on the family unit as well. Heck, there are already stories of family dysfunction and divorce that are directly attributed to this economy now. Hopefully we can all just look at this as a thing of the past soon. There are some signs that a recovery may be on the way according to some, but we still have a ways to go for hanging in there.

Are You Counting Your Financial Blessings?

This recession has had quite an impact on my life, although the opposite of what some may think. It has made me feel thankful for everything that I have, that I have not lost like so many unfortunate, undeserving others, thankful to have a functioning vehicle, a roof over my head, food in my refrigerator, and money to pay my bills, although admittedly our disposable income has dried up quite a bit because one of us has a side job whose income heavily relies on consumers and sales and that has dried up considerably, like any other business has.

I find myself thanking my lucky stars that not only does my job seem secure, but also that I am fortunate enough to work for a great company whose benefits just got better this year, increasing their per pay 401 match to 6%, up 2% from the 2008 year. I mean, how luck am I? Even though our income has contracted considerably along with the economy I find that I’m not crying the blues for what is not, but instead am thanking fate and the powers that be for what I do have, and that it happens to still cover our necessities and our mortgage.

My heart really goes out to those that have lost their jobs. Every day it seems I’m reading a new heart wrenching story about someone who lost a high paying job, only to lose their home, their pets, sometimes their marriages have busted up over the financial pressure, and most of them are having one heck of a time finding anything nearly comparable to what they lost.

These stories are way to plentiful right now, and it’s almost an exercise in self punishment to read the news pages and headlines today, since most of the new is depressing and seems to be focused on the bottoming economy.

I think that one huge lesson that comes out of this whole ordeal will be that we all really think twice about spending money, and we make sure that we are spending on things that will truly enrich and bring joy to our lives. Maybe we can rediscover our ancestors ways of saving and spending, which were much more thrifty and also had a sense of non-entitlement to them.

How do you think this recession has changed your perspective on life? Your appreciation for what you have, versus the longing for what you don’t have, materially speaking?