Read the newspapers these days and you’re seeing a lot of coverage indicating that there’s an economic recovery on the horizon.
* Last week, ADP said that employers cut 491,000 jobs in April, versus the 708,000 that were lost in March. In fact, job losses were at their lowest since November of 2008.
* Fed Chairman Ben Bernanke forecasted a turn-around for later this year, saying that conditions in the financial markets have improved and the banking system is gradually being repaired.
* President Obama said on Friday that “the gears of our economic engine do seem to be slowly turning once again.”
* The Dow Jones Industrials gained nearly 165 points and finished up 4.4 percent for last week – the eighth gain for the index in nine weeks.
Is this good news? Eh. What I really think it is is less-than-bad news. But the fact that it’s being played so positively could cause problems for you and me. If individuals follow these encouraging headlines they can become too optimistic and sabotage their financial future. When we feel too good, too powerful, too in control of the future, it tends to backfire. There are studies from Duke University that found that when people see the glass as too full, they behave in ways that aren’t good for their future. They overspend. They accumulate debt. They fail to save. On the other hand, mild optimists – people who are happy, but not complacent – save more and are likely to have emergency funds. More…
More and more people are budgeting these days, and I’ve been getting lots of questions about where your money should be going each month – in other words, how much you should be spending on each area of your budget, from housing to entertainment to everything in between. The pie chart below – which we used on Oprah’s Debt Diet – outlines all the details:
As I write this, Teddy, my beloved cockapoo, has snuggled up to my feet (the benefits of working at home). He doesn’t know it, but last weekend he almost got a brother. We were out and about with our next door neighbors in a nearby town. They’ve been talking about getting a puppy. And together we wandered into a local pet store where there were two cockapoo puppies — brothers we were told — from a nearby breeder. “If you take one,” we’ll take the other, Eliot, my fiance, told my neighbors, not wanting to split them up.
In the end they opted to pass. I was disappointed. But then I thought about how much better this would be for my bottom line. Two dogs would mean twice the vet bills, twice the grooming, twice the food, twice the dog-sitter (when I travel for work, she often takes him overnight). In other words, thousands of dollars a year. And that doesn’t include start-up costs. More…
Yesterday, I spent a few minutes helping a young friend search for low-enough airfares that her dad would agree to a quick Florida getaway this coming weekend. I struck out. There didn’t seem to be much under $600 – $700 person round trip — especially if you wanted to go early enough on Friday and return home late enough on Sunday to actually have a substantial weekend.
Today I have a new trick to try. According to my friend David Bach’s new bestselling book Fight For Your Money, searching for tickets for a family is often more costly than searching for tickets for individuals. He demonstrated the trick for Harry Smith on The Early Show finding a $275 difference per ticket — $1100 in total! — for a family of four flying from NY to LA. To find out how it works from NY to Florida stay tuned…..
Kev wrote: Do we really all have the new sensibility now? Are the Jones’ out of fashion or out of style for good? I think the American consumer will come back, though never as bold as we were – at least not for a while.
I for one think thrift is going to be hip for a while. Just check out the style section of yesterday’s New York Times where there was a story about how less expensive labels like Ann Taylor, Talbot’s, Isaac Mizrahi’s new Liz Claiborne line for Macy’s have become suddenly alluring to the Prada shopper. And the story in today’s WSJ about the slowdown in global consumerism.
Are you actively shopping less? Because you want to? Because you have to? Lemme know….
