Prime Rate Credit

Apparently this recession isn’t just hitting the likes of regular schmoes (like me), but it’s also starting to show it’s effects on the upper crust rich portion of our population also. So called luxury goods are suffering a bit, and it’s been noted that the rich are now “bargain shopping” more, and are also scaling back on investing agressively, all of which points to the fact that they are feeling the economic squeeze that all the rest of America is feeling at the moment, even those that normally don’t bat an eye at 100 dollar fillups and other such expenses.

It’s not necessarily that the rich class is hurting for money, it’s just following the behavior that everyone is expected to during times of economic slowdown, and the upper class is not immune to following the herd during downturns either, just like you and aren’t immune to watching our pocket books either when it seems like the US is having a hard time in multiple economical areas, such as gas prices, energy prices, food prices, and the horrid housing market.

I know there are ways that I have cut back, and I would consider myself to be middle class to upper middle class, and I can afford the gas, energy and food prices, but I still have to consider that the extra money I am spending on these cost increases is money that I could have done something else constructive with, like invest or purchase things that go up in value, or put money (equity) into my mortgage. All that extra money I could have invested essentially in myself is now going to the things that I need to buy just to get by, so to speak.

I’ve tried to only go shopping at a store where I get ten cents off a gallon of gas for every fifty dollars I spend for one thing, this helps offset the cost of high gas prices. I also only buy clothing that is on sale, and have taken to shopping more at second hand clothing stores where I may have purchased more clothes at retail stores.

I’ve also cut back on things that aren’t necessary, like paper plates, instead we use regular plates, also we’ve cut down on making too much coffee and wasting half of it in the morning, and make sure we don’t waste any food now. There are ways in which all of us have cut back, it just depends on where your priorities lie I suppose.

Apparently everyone is so fed up with the four dollar gas prices that do not see an end in sight, that they are easing up their views on offshore drilling here in the United States, something that has been banned by Congress for years now because of environmental concerns.

And the concerns are definitely valid, as drilling could definitely interrupt any delicate ecosystem, so there is bound to be criticism and opposition to the offshore drilling that is scheduled to start off the shores of Florida for oil, but many are changing or softening their views on it since Americans are suffering such high gas prices among a lot of other touhg economic factors that have us all not so optimistic about America’s economic future.

The drilling is to begin offshore of Florida, off the panhandle, which means they will be drilling under water, which is a very expensive feat to say the least. I guess that four different companies are slated to begin drilling soon. And it’s expensive because they are merely exploring now, they don’t know exactly where oil fields might be found, but they have to drill first to find out, so it is merely an exploratory process at first, one that will cost millions of dollars.

Many are saying that Florida would only be the beginning if offshore oil drilling is successful there, and that other coastal states would be subjected to the same exploration if they find an abundance of old dinosaur fossil fuel there. Just the mapping of the sea floor where they will be drilling (and miles down, no less), can take years to complete, so this is definitely not something that companies looking to explore take lightly. It may be years before we see any of this drilling come to fruition, and then what?

Do they really impact the gas prices that much? By then will we HOPEFULLY have a good, viable alternative to fuel for our vehicles, or some alternative form of transportation that doesn’t costs us a large portion of our salaries every week? I’m hoping for the latter because I can see offshore drilling being interruptive to our environment, and right now we have enough problems to deal with.

The skyrocketing cost of fuel is altering people’s plans and behaviors. The use of public transportation has surged upwards as commuters look for less expensive ways of transit for daily work and errands. With the anticipation that ridership will continue to expand, public transit systems will need to increase the number and frequency of routes offered to their commuters.

Riders near major cities have complained about overcrowding on buses and have urged public transportation systems to add on services. With overcrowded conditions on public transit systems, it takes longer for passengers to load and unload which often results in delays.

Public transportaton is trying to work out plans to meet the sudden increase in commuters’ needs. In more remote suburbs where public transportation is scarce or absent altogether, perhaps we will see some kind of a plan on the part of the government to expand and outreach service further in the near future.

Presently, efforts to carpool are on the rise in these areas in response to outrageously high gas prices. Soaring jet fuel prices are forcing airlines to reassess some of their less profitable flights. Often, they are forced to drop certain nonstop flights to certain cities. Travelers will have to make stops or change planes more frequently.

Potential vacationers are often altering their getaway plans and looking for how to have fun in their own back yard. Families are sometimes searching for local outings of interest and adjusting their plans to have maximum fun with minimal travel.

In a Rand - McNally survey, they found that two thirds of families are either shortening their vacation plans or cancelling them altogether. The staycationers are often purchasing backyard recreational supplies to try to enjoy time off at home.

Trips to local zoos, art museums or locally nearby amusement parks can make a staycation both adventurous and fun. With the high cost of gas prices, we are all being forced to cut back on fuel consumption and that, at least, is more ecologically responsible. For better deals on gas, there are some of the best gas credit card deals around to help you earn money back toward fuel for your current fuel purchases will can help ease the blow of this horrible economy and rising gas costs.

If you’ve read any number of financial self help or money guru type books, then you’ve undoubtedly heard the phrase “pay yourself first”. And what does this phrase, pay yourself first, mean exactly? Well, the point the author is usually trying to make by saying this oft-used phrase is that before you purchase frivolous items that are consumable (used up over time, depreciable), and pay your utilities, mortgages, rents and car payments and other expenses, you should first be paying yourself.

That’s all fine and dandy, but when you have the threat of a ding on your credit report from paying a bill late, or a repo on your car, or perhaps a foreclosure on a home, this is not feasible, not by a long shot. I think what they are saying is that if you develop the habit of saving first, partying and enjoying money last, then this is the general idea of paying yourself first.

This would mean less credit card purchases, unless they are on a low fixed APR credit card that is paid down often with little interest build up, and less impulse and “fun” purchases like dinners out at restaurants, entertainment like movies and such and other items that aren’t considered a necessity. Also less vacations and time away from home, or money spent on home improvements unless they are necessary may fall into this category.

Paying yourself first means putting money away in a savings or other interest bearing account before you pay all your other stuff. It’s like a bill, only you’re paying yourself, and should put the same priority on it that you put on any other paper bill you get in the mail every month. It’s a little easier if you have a set method though, so a recommendation would be to set up automatic debits from your account into a savings or interest bearing instrument, or definitely you should take advantage of any 401k or other tax benefitted retirement fund you can be a party of.

That’s really the most ideal way to set aside money to grow for your future, because not only is it tax deferred, but you also usually get a match of some sort from your employer. It’s a no brainer really, and you should also put as much as you can into it - ideally anywhere from ten to fifteen percent of your total gross pay would be the best thing to do. If you can’t do that, then definitely work your budget a bit and make saving for the future a priority. It truly is the only way to building long term, solid wealth and security.

Well, the May jobs report certainly didn’t help the already jittery economy, and it certainly isn’t infusing any confidence into CEO’s about the futures of the companies they helm, and more importantly, the blue and white collar workers that their companies employ. Many CEO’s are reporting they feel not so certain about the future of their company, at least not for the immediate horizon, because of a combination of factors that are going on right now that have the country on the verge of a long economic downturn - aka recession.

Those factors are the weak US dollar, which is at an all time low against the Euro and some other currencies, the fact that the housing market is in the dumps, and the rising gas and oil prices, squeezing consumers, which ultimately trickles down to the companies the provide consumer goods and services. We all suffer in a downturned economy, no matter what you offer or how you make a living.

Heck, just the other day, I saw that some developer in California is so desperate to unload properties that they are offering a buy one get one free sale. Talk about desperate times calling for desperate measures! I also recently read that there are some very high profile foreclosures looming, like Ed McMahon, due to poor financial planning, and Evander Holyfield.

Even Ted Koppel’s feeling the squeeze of housing, since he hasn’t been able to unload his multi million dollar home for three years. He reportedly had to drop the price of his home nearly half just to make it more appealing to buyers so he doesn’t have to keep paying on something he’s not living in.

Jobs are hopefully going to rebound, because the news, which was reported last Friday, already sent stocks plummeting, and are bound to send them plummeting further if the next round of news is bad for jobs as well. These sorts of reports also create a kind of hysteria amongst the population, making everyone hang on to their money even harder, and perhaps sending the country into a further and deeper recession. I like to take the Polyanna attitude on these things as you’ve read in the past, but this is looking like something that will not soon pass unfortunately.

The good thing is, the US economy is a resilient one, and we always bounce back, it’s just a question of how long this time - it may be one of the longer downturns in recent history, some are even saying akin to the depression, but of course not as severe thanks to safeguards put into place. We hope!

Comparing insurance quotes in depth that come in the mail or over the phone may pay off nicely by saving you quite a bit of money. Most of us don’t like change and think that because we’ve had a certain insurance agent for years we shoukd just stay with them.

Without looking into the quotes seriously and comparing each item covered and the deductible involved , we may underestimate the savings potential. Sometimes, the savings may be nonexistent or minimal. In that case, staying with your present company would probably be in your best interest.

Recently, I was curious to investigate a quote I had received in the mail from a competitor for my homeowner’s insurance. The savings on the quote was significant at about $100.00 on my annual premium. After taking a trip to the office of the competitor, I was pleasantly surprised by the financial advantage offered to me if I switched companies. The results were better than I would have imagined.

By changing insurance companies and putting my automobile insurance together with my homeowner’s policy, the savings were sizable. As it turned out, the car insurance was signifigantly less also, especially when combined with the homeowner’s insurance.

For my particular situation, the payment premium per month for both my home and my car was equal to exactly what I had been paying previously for my car insurance alone. The net result financially was like eliminating the entire bill for my homeowner’s annual premium.

This particular scenario is unusually advantageous as even the competitor insurance company admitted. When calling the prior insurance companies, they could not match the prices and were gracious about making the change. Even the existing insurance companies stated that they all go up and down all the time and it pays to periodically compare.

All coverage remained the same even with the savings. If you see a competitor’s quote in the mail and it looks like a savings, it is worth at least a phone call and a line by line comparison of coverage. The net result and bottom line could mean significant savings for you.

Let’s talk about the current stock market for a minute. First of all, you should know that I’m not a huge skeptic when it comes to the resilience of the American economy and the American stock market as well. I know, times have been extremely tough over the past year, actually about two years now, for our economy with a multitude of factors affecting consumers as well as stocks, because whatever affects the consumer basically affects the stock market as well as you may already know.

Many people who are not so convinced of our economy’s resilience are bailing out big time on US stocks, and delving their money into money market accounts which are a much safer option, but are an incredibly (odds have it) lower rate of return over the long haul on your money. Remember, you should almost always invest in stocks with the long term - at least 3-5 years in mind, if not more, or you could be in for a lot of losses as well as getting taxed out the wazoo for short term gains.

It makes me kind of sad that the paranoia about the state of the US is forcing people to panic and put their money in places that really don’t even keep pace with inflation - which by the way, in broaching a 5% mark this year, especially for food and other goods, rather than putting their money in places that have a much higher rate of return over the long haul. Think about it, the wealthiest people are the ones who still buy when everyone else is running away, just look at Warren Buffett as a prime example of this philosophy.

He has a well known theory that you should be greedy (buy stocks you think are good) when everyone else is scared, and be scared when everyone else is greedy. Hence he is one of the world’s richest men, actually I believe he tops that list now. As long as you are a person who can research good stocks and buy it at a good price (aka, when most others are scared to invest in the stock market), you could definitely make out like a bandit around retirement time!

Well, the Federal government was hoping that the tax rebate checks that are fairly generous amounts of money for many people, especially married couples, would spur the economy with a bit of old fashioned frivolous spending. Wait, what did I just say? Frivolous spending? That’s a thing of the past in this gloom and doom economy, right?

Well, the government is not counting on that, and they are hoping that the tax rebate checks coming in May and beyond will be spent (blown) right away, boosting the retail environment and prompting a surge in consumer spending that may in fact boost the economy by giving more to business, small and large alike, and help pull us out of an impending or already-here recession. Heck, maybe while we’re at it, it may even boost the stock market which seems to be as volatile as oil and water mixed together right now.

Problem is, in polls that were run recently, consumers are saying that they plan on either saving the money or paying off bills with it. Does this really count as spending, at least in the way the rebates were intended to be spent? Well, that’s for a specialist to decide, certainly not me, but I’m not so sure that’s what the Fed had in mind when they put together the economic stimulus package that included the tax rebates to tax payers.

It still may help though, because if Americans are going to save it, that means more money for the faltering banking economy, and also may mean more money to businesses anyways, since they will still supposedly be paying off bills that may be late, or will be paying this money to some other business, whether it be a grocery store, a utility business, a car payment, or whatever other late bills of catch ups the American people decided needs it most (hmm, maybe even that gas credit card you’ve been meaning to get paid off so you don’t have to look at it any more, you name it).

Well, in other “woes” of the economy, something that should really be the first thing noticed when the economy takes a downturn, discretionary spending on things that are considered “discretionary”, meaning not necessary or luxury items and services that people typically of a more affluent financial stature would spend their disposable income on.

Things like luxury hotel rooms, massage services, spa services, expensive cuts of steak at upscaled steakhouses, and even first class seating on airlines are starting to notice a downturn in spending and more and more people are using frequent flier miles they get from credit cards, from this more affluent population of spenders. They are saying that the recession is starting to filter down into the luxury goods market simply because the recession affects and squeezes everyone’s pocket books, not just one population segment, unless of course you are Warren Bufftett or Bill Gates, who will always have a huge buffer.

The affluent are spending less on leisure activities that are typically reserved only for the wealthier segment, like golf, and are also spending less on luxury gifts and lines of products. Although I must say, they sold out of the upscale line of boots that goes for upwards of 300 bucks at Christmastime, so I don’t know how true this could be. I’m referring to the lambskin brand of boots, the Ugg brand, which is a celebrity favorite and also happens to be a favorite of the more spendy crowd in the general population as well.

Although no economist can truly call out this possible recession until all the numbers are in and it has been months, we probably are right in the middle of one, and since this is general consensus of everyone who matters, then I saw it’s a real recession no matter who validates it. That’s just my opinion though, and Lord knows I’m no economist!

Budgeting seems like one of those things that seems like such a great idea, and when written on paper, it seems to make complete and total logical sense, and even seems to be the only way to go if you want to have any hope of running a succesful financial life. However, when we step back into reality after our little budget planning systems, and are faced with both unexpected expenses as well as the occasional temptation to buy things that we know darn well are out of our budget, it becomes a lot less romantic to have a rigid budget.

Take for example by own situation. We just moved into a new house last year, and we’ve been in it for about a year now. The house was only about two years old when we moved in, so we figured we’d have minimal updating or repair to do when we moved in. The problem is that we didn’t account for how much furniture, decor, and other things we would be purchasing as first time homeowner, so it really messed up our budget from the get go.

You have to buy lawn mowers, many tools and other accessories that you didn’t have, including shovels, rakes, gardening things, maybe some landscaping items, and tons more stuff for the inside. Today, I still haven’t finished half of the rooms, and it won’t be another year before I intend to do so. It would simply break the bank if we were to try to force all of it into such a small time frame.

People are faced with these kinds of choices every day. What to wear, what to eat, and how to accessorize your home are only some of the ways that we can so creatively throw money down the prodigal toilet, so to speak, and I for one can be very good at doing that, especially if something strikes my fancy as being a “necessity” right away. For example, we are trying to take it slow and buy things that we really like that will also last a long time for our new home.

I made a trip to Bed Bath and Beyond the other day, fully intending to not really buy anything, just browse on my lunch break from work. However, I ended up purchasing a hundred dollar painting that I just had to have, because when was I going to find a deal like that again? These are the types of temptations that can sabotage your budgets, so it’s best not to go out just to “browse” as I’ve learned many a times.