Money Management

Black Friday: What Happened This Year?

March 11, 2016 By Twila Van Leer

Well, the annual bacchanalia of holiday bargains has come and gone. Whether it was the standard grab-for-the-goodies frenzy or a ho-hum just another day depended to a large degree on where in the country you are located.

As predicted, some of the oomph of the post-Thanksgiving spree has eased, with fewer shoppers willing to brave the early hours and crowds, reports from around the country indicate. In some locales, demonstrators piggy-backed on the opportunity to attract a crowd. And some people opted to stay home and peruse the ads in newspapers or online before making spending decisions.

Bottom line, according to an Associated Press rundown, crowds this year seemed to be smaller than in the past. But there were variations on the theme in some places.

Colorado

In Colorado, which legalized marijuana recently, discounted weed and specially wrapped holiday combinations were on sale for the Black Friday crowd. In traditionally snowy Denver weather, some crowds lined up and braved the cold to get in on the weed deals.

Chicago

Some Chicagoans linked arms and tried to block traffic into stores in protest of the shooting of a teenager in their city. In some of the stores, employees safely ushered shoppers out of side doors to prevent possible clashes with the protestors. Some of the shoppers took it all in stride and used their smartphones to photograph the event.

Kansas City

Some shoppers who have reveled in the competition and excitement of Black Fridays past were actually disappointed to find themselves in stores without crowds. One woman in Kansas City listlessly shuffled through racks of clothing and wondered where the fun went.

Arizona

In sunny Arizona, people told news reporters they preferred hiking in the saguaro-studded hills rubbing elbows with crowds of shoppers. For some like-minded non-shoppers, it was an opportunity to impress upon children the true meaning of the holidays, one Tucson mother was reported as saying.

Online

As technology takes over more and more of the country’s shopping functions, the experts reported that – as predicted- more retail shoppers used their phones than their desktop computers to order goods. The option of sitting at home quietly digesting the Thanksgiving turkey while ordering online rather than facing the mobs in stores, seemed to make even more inroads into the Black Friday events.

Big Retailers

Even with the slight slackening of Black Friday traffic, some of the nation’s biggest retailers reported brisk sales. WalMart reps reported that its stores dotting the country saw increased sales this year, both in the stores and online, over last year. Ditto Target, which racked up a record in online sales, particularly electronics. Business in Target’s stores also was satisfactory, spokesmen said. Penneys put considerable effort pre-season into making its apps more user-friendly and said the results were good. It was apparent that many shoppers were researching online then going to the stores for purchases, a spokesperson said.

Black Friday may be losing a little of its luster, but don’t count it out yet as a holiday event of great magnitude.

Check Up On Your Personal Finance Planning

March 11, 2016 By Twila Van Leer

The Great Recession that plagued personal finances from 1993 to 2008 had a significant impact on the amount of money Americans were saving. Savings figures for the period were at the lowest levels in recent history.

But by May of 2009, the household savings rate had climbed to 6.9 percent, the highest level since 1993. It took a major financial jolt to get people back on the right track. The effect of the recession, coming on the heels of a period of high borrowing, was a disaster for many. Bankruptcy filings had nearly doubled by the end of 2008.
If you have lingering concerns about the state of your own finances, check your data against these indicators. Make adjustments if necessary.

5 Steps To Financial Health

Credit Scores

1. Check your credit score. In a range of 300 to 850, the higher your score, the better your financial health. Lenders use this score to determine if they want to do business with you. To get a credit score without cost, contact one of the three primary credit bureaus, TransUnion, Equifax or Experian. If your score is below 600, try to improve it by paying down debt, satisfying outstanding judgments or curb your use of credit cards.

Savings

2. If you are saving less than 5 percent of your income, it isn’t enough. In 1993, the rate, at 7 percent, was the highest it had been. Since then, too many earners began dipping into savings to see them through the recession, rather than adding to their savings cushion. The trend now is up and if you haven’t joined the savers, now is the time. Don’t look at it as an immediate thing, but as part of the retirement you hope to have. If your savings backup is niggardly, it may disappear entirely in the event of a medical emergency or any other of the many financial challenges that can bite when you aren’t prepared. Make savings of 10 percent of income a goal.

Credit Cards

3. You can be pretty sure you are in over your head if you carry credit card balances from month to month or if you are paying only a small amount to the principal. This is a major cause of financial stress for many people. Ideally, you use a credit card only in emergencies, or charge only what you can pay off in a month. Then you start whittling away at the total, paying whatever you can over the expected monthly payment. Only $5,000 in credit card debt requires a minimum $200 a month and can ultimately cost $8,000, taking up to 13 years to pay off.

Mortgages

4. If housing consumes more than 28 percent of your income, you are in trouble. Almost certainly you will have to cut back in other areas of your budget to handle that load. When the housing market was thriving, the mortgage lenders were allowing people to buy homes that absorbed up to 35 percent of their income, but with the country just coming out of the housing slump, they are edging back to the 28 percent figure. Give some serious thought to downsizing if possible.

Cut Back

5. If your non-housing bills are going crazy, you can assume you need to do something to restore balance. Succumbing to the temptation to buy items on time, you end up paying what seem to be relatively small amounts on a dozen or more products or services. Then relative small quickly becomes over-large and you’re suddenly in the category in which the required outgo is larger than the income. Assess your situation by putting all the bills on the table and seriously discussing them. Identify what you can trim or do without and then do without it. Just one for-instance: Do you really need a 500-channel cable TV package if you are using only a few of the channels? Do you really need a land line if you have cell phones? Etc. etc. etc. An honest look may help your family regain control of its resources without any really painful sacrifices.

Do what you can to avoid become part of the dismal foreclosure and bankruptcy statistics. Keep tabs on your finances and move toward a better distribution of what you have for the sake of the future as well as the present.

An Expert Shares Money Management Secrets

March 4, 2016 By Twila Van Leer

Anna Sergunina of Nerd Wallet has learned how to manage money effectively and she is willing to share. Here are her tips on how to keep a tight control on your personal finances:

Managing Money

Many people accumulate debt because they want things they can’t really afford. But debt also happens when we don’t understand the flow of our income and expenses. We can’t accurately estimate how much money we have available to spend. Sergunina developed a “money flow” system to help her family track spending. Here’s how it works:

Set up two free checking accounts.

One to pay fixes expenses such as mortgage or rent, car payments, utility bills, etc., and one to pay variable expenses such as groceries, gas, clothing, etc.

Create a high-yield online savings account.

This is your emergency fund to handle life’s curve balls such as medical bills, loss of job or other income reduction, major repairs and so forth.

Plan ahead for big-ticket purchases.

The Serguninas agreed to use their one joint credit card for such things as airline tickets and hotel stays. They still have separate credit cards, an essential in maintaining a good credit score. Closing cards could hurt your credit rating.

Create a budget.

To determine how much you will need in your “fixed expenses” checking account be sure to include all the items that come around regularly, including ongoing household expenses, insurances, health care premiums, cable, Internet and phones, membership fees, debt payment, and savings. (Making savings part of the “must pays” helps you avoid putting it off.)

List the variables.

Such as groceries and eating out, gas, clothing, personal services, medical co-pays, entertainment.

When your paychecks arrive, divide the money into the two accounts.

Have the savings deposited automatically. Most fixed-cost bills can be paid automatically as well. That eliminates the need for a debit card. A cushion of several hundred dollars can be maintained to take care of the unexpected expenses or bills that arrive before the paycheck does. With the second account, take care of the variables, remembering to stop when the money is gone. No new shoes if the tank is empty.

Link your “curve ball” savings.

Link to both checking accounts so you can make a quick withdrawal if necessary.

This systematic approach to money management makes tracking less cumbersome, Sergunina says. It eliminates the need for constantly checking account balances and gives you a better “big picture” view of your spending.

Debt-Free People Have Positive Attributes

February 25, 2016 By Twila Van Leer

The bondage of living in debt adds more stress to our lives.

You probably have noticed it among your friends and acquaintances: Some families can pay off $40,000 in debt in two years while others who have much larger incomes can’t seem to make a dent in their indebtedness.

What makes the obvious difference is how they spend their money. They have different priorities.

People who make a conscious decision to corral their personal finances and keep them under control have some characteristics that others do not, financial experts say. They list seven of these traits as:

Being wise.

Those who decide they are through with debt, approach the problem as if it’s a pernicious skin disease that they must get rid of. Now. They make it a priority.

Being patient.

They can walk past sales and other temptations without a qualm because they know that in the long run, they will be better off. Impulse buying is the impatient downfall that defeats debt eradication.

Being confident.

People who are getting out of debt don’t pay attention to friends or relatives who comment on the lifestyle changes they are making. Start out the process with this in mind and stay confident in your decision to stick it out. You’ll achieve the financial peace of mind you are seeking.

Being goal-driven.

Determining to get out of debt is a goal in itself. But it requires more, short-term goals that will aid the process. Proceeding without definite plans could lead to frustration and stymie your objectives. Choose which of your debts you plan to attack first and stick with the agenda.

Being responsible.

Becoming financially mature doesn’t depend on the calendar. If you continue at age 50 to treat money as you did at age 20, you may never get out of debt. Responsibility means getting out of debt as quickly as possible and avoiding it in the future. Being out of debt doesn’t mean you can now spend foolishly. It means putting your debt-free money into saving for huge expenses such as college and assuring your retirement by investing your money wisely.

Refusing to be materialistic.

Attitudes toward money matter immensely. How much importance you put on STUFF will guide your use of money whether you have a lot or a little. There’s an old saying: “You can’t take it with you” that has become such an old, old saying because it is true.

Being willing to make sacrifices.

Eating out and paying big prices for entertainment might have to go by the board while you get out of debt. But these drastic budget cuts are temporary. When debt is in the past, you can start adding these items back into the budget. You may find you can cut back, however, and not miss them. Bottom line: If you are determined to be debt-free you will make the necessary sacrifices. You’ll take the actions that lead to financial peace.

Sharks Experts Share Advice

February 24, 2016 By Twila Van Leer

Shark Tank Experts — Kevin O’Leary, Barbara Corcoran, Daymon John, Lori Greiner, Robert Herjavec, Mark Cuban

What would the experts on the popular ABC show “Shark Tank” advise those who are 50-plus to help make them financially secure? In its February/March AARP The Magazine, which is aimed at those in that age group, editors asked the Sharks. And here is some of their advice:

Kevin O’Leary warns that you must be prepared for financial downs.

Keep 10 percent of your total assets in cash. Three basic investing rules include: Never put more than 5 percent of your money in one stock or more than 20 percent in one sector such as energy. Do put 50 percent of your investments in dividend-paying stocks and 50 percent in interest-bearing bonds. Over the past 40 years, 71 percent of the returns on Standard and Poors came from dividends, not capital appreciation.

Mark Cuban warns that you must “follow the green, not the dream.”

Too many entrepreneurs focus so closely on their dream that they forget the practicalities. The advice carries over to planning for retirement. To better align the dream with the green, determine your savings; assume you’ll earn 4 to 6 percent on investments; commit to living on the returns and not spending the principal; calculate what that leaves you with annually, monthly and weekly; adjust accordingly.

Cuban suggests some healthy paranoia. Learn to spot “Slick Willies.”

If you are listening to one, take a time out to think things through and then follow your good sense. Long-term, consider every financial activity with caution and the expectation that things could change. Health considerations, for instance.

No deal is better than a bad deal.

Three ways to hone your skills to avoid bad deals: Understand the investment. Keep emotion out of it. Getting emotionally attached to such things as a house can blind you to the realities. Speak the truth, not what others want to hear. In making financial decisions, you are not trying to make friends. Separate the two.

Learn from the past.

Take risks, but do it based on your knowledge of outcomes in similar circumstances over a period of time. Invest in what you know. What companies and products do you love and trust? Build your portfolio around them. Do your homework using the many resources of the Internet. Focus first on recouping your capital, then on how much profit you can make.

Negotiate everything.

Don’t simply accept the fact that utility bills are going up, for instance. Call the provider and see if there is anything you can do to lower your bills. If your financial adviser wants 1.5 percent, offer 1 percent. Negotiate with medical providers, etc. If you don’t get a reduction, you haven’t lost anything by trying.

Listen and keep learning.

Ask the question: “What did I learn from this experience?” Age doesn’t matter. There is always opportunity for learning from what life hands you. More knowledge and wisdom mean more opportunity, according to Shark Robert Herjavec. “It’s just a matter of opening doors and finding it.”