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A Bad Time for Shopaholics?
Tweet Share on Facebook October 31, 2008 Comment (4)If you were about to release a movie on shopping addiction, would you decide that now—as consumer spending plummets and the economy grinds to a slow crawl—was a bad time?
Advertising Age asked that very question, since "Confessions of a Shopaholic," starring Isla Fisher, is scheduled to hit theaters early next year. The movie, which is based on a book by Sophie Kinsella, revolves around a woman—who happens to be a personal finance reporter—who goes into debt buying the latest fashions. Just over 70 percent of respondents in Advertising Age's online poll said they would go ahead with the project, while the rest said they would hold off.
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Timing 401(k) Investments
Tweet Share on Facebook October 30, 2008 CommentDear Alpha Consumer,
Do you know if my biweekly 401(k) contribution (on my paydays) is invested based on the market price of mutual funds at the beginning of the day or the end of the day? I know that normally one shouldn't be concerned about such things, but when the market swings up or down by 7 percent on a given day, it can make a difference.
When the market ends up 9 percent one day and down 5 percent the next, it's hard not to be concerned about the timing of investments. I asked Fidelity, the country's largest retirement plan administrator, when, exactly, 401(k) money from paychecks gets put into the market.
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Ivanka Trump: Spokeswoman for Cheap Lunches?
Tweet Share on Facebook October 30, 2008 Comment (7)Anyone who stumbles upon Ivanka Trump's new blog, launched earlier this month, is greeted with the glamorous business woman's thoughts on how budgeting during a slowdown need not mean boring midday meals.
She writes, "With gas and food prices on the rise, more and more people are skipping the deli line and bringing lunch to work to save money. This is great, but all I hear is how boring a brown bag lunch can get and how people want something different, especially when they are stuck at their desks—something I completely relate to."
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Why You Won't Feel the Fed Cut
Tweet Share on Facebook October 29, 2008 Comment (5)Many consumers are unlikely to even notice today's widely anticipated Fed rate cut, aimed at further encouraging lending and spending. While a Fed cut generally translates into lower rates on credit cards, mortgages, auto loans, and other types of borrowing, analysts say this time will probably be a little different. I spoke with Mike Larson, a real estate analyst at Weiss Research, to get his insight:
First, a Fed cut can't change that banks are nervous about lending to consumers right now because of fears that an extended economic slowdown will make it difficult for them to pay those loans back. "The obstacle is not the price of credit, it's the availability of credit," says Larson. If you don't have a good credit score, down-payment money (in the case of a mortgage), and a reasonable debt-to-income ratio, then it's hard for borrowers to get financing, regardless of the going interest rate.
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Attention, Shoppers: You're Being Watched
Tweet Share on Facebook October 28, 2008 Comment (9)In this week's issue of the magazine, I write about a new trend in retail: stores willing to customize products to your specifications instead of selling the same thing to everyone. Examples include wine, M&Ms, jewelry, and sneakers. There was one development that didn't make it into the article—RFID tags that let companies know exactly who you are and where you're looking.
Researcher and consultant Amudhanvel "Vel" Dhinagaravel says that in the not-so-distant future, we'll all have some kind of card in our wallets that lets stores know when we walk in. The stores will then customize their advertising to target whoever is walking by. Imagine, for example, that you often buy high-end orange juice. When you walk into a store, the displays post advertisements for expensive orange juice listed at full price. But when someone else—who tends to go for discount orange juice—walks by, the advertisements switch to emphasize sales in the orange juice section.
If this concept makes you uncomfortable because it sounds a bit too much like Big Brother watching your every move, you can take comfort in two facts: First, you are not alone. Companies are well aware that consumers don't like the feeling that they are being watched, so will very likely tread carefully. Second, this "new" technology isn't really that new. If you have a loyalty card at a grocery store, for example, the company is already tracking your purchases and marketing to you accordingly. Coupons at the end of receipts are often tailored to customers based on their purchases. So, in some ways, Big Brother is already watching.
What do you think—is new technology like this creepy or useful?
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Audio: the Benefits of Credit Unions
Tweet Share on Facebook October 28, 2008 Comment (1)LISTEN NOW: The Benefits of Credit Unions
Subscribe to Personal Finance With Kimberly Palmer
Over the weekend, I spoke with WTOP about the benefits of credit unions. Because they're owned by their members, they often offer lower fees, lower interest rates on loans, and higher rates of returns on savings. Many people assume they're unable to join but are, in fact, eligible through their cities, workplaces, or religious communities. (To find a credit union near you, you can check out NCUA, Find a Credit Union, or the Credit Union National Association.) Another benefit: Credit union accounts, just like FDIC-insured bank accounts, are insured up to $250,000.
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Should I Sell All My Stocks?
Tweet Share on Facebook October 27, 2008 Comment (7)When the markets are tanking, it's hard to watch your contributions to investment accounts evaporate. That's just what one reader, Terry, had on his mind when he asked:
I moved about 50 percent of my 401(k) into a stable value fund about three weeks before the Wall Street drop. The rest of my funds are in five different funds, all of which have dropped quite a lot in the last two weeks. Should I leave them alone? Should I get back into them at some point when their value is about 30 percent lower than when I got out of them?
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The Holiday Gift of Less Stress
Tweet Share on Facebook October 25, 2008 Comment (5)With banks wilting, credit elusive, and retirement accounts slashed, this holiday season is going to jingle a little less than in years past. One survey by coupon site RetailMeNot.com found that almost half of shoppers plan to spend less on the holidays than they did last year, and TNS Retail Forward predicts that the season's spending will be the weakest since the 1991 recession.
While the newfound frugality will dismay retailers struggling to boost sales, it's actually, in many ways, good news. Strong consumer spending has helped drive the economy, but it has also drained family piggy banks. The average American is now responsible for over $17,000 in outstanding loans, excluding mortgages. At the same time, the holiday season's emphasis on shopping conflicts with the simpler lives that many consumers say they want.
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Ecochef: Save Money, Eat Better
Tweet Share on Facebook October 24, 2008 Comment (3)Today's guest entry comes from chef and ecologist Aaron French, whose work focuses on the connection that food forms "between humans and our environment." He has a master's degree in ecology, is the chef of the Sunny Side Cafe, and writes the EcoChef column for 10 newspapers in the San Francisco Bay area.
In these times of financial uncertainty, everyone is looking for ways to save money and to make purchases more efficient. Certainly, we can buy less and buy what is on sale, but there are less obvious routes to efficiency as well. And as we change our buying habits to save money, we also can make a change for the environment.
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Moving Money Amid Market Volatility
Tweet Share on Facebook October 23, 2008 Comment (3)Dear Alpha Consumer,
I just started a new job and want to roll over my 401(k)'s from my previous two jobs to my new one, so that my money is all in one spot. But I'm scared to move my money because with the market volatility right now, what if I lose out on major gains? Also, I heard that the majority of a person's lifetime gains are typically made on just a handful of days. Is that true? What should I do?
You should move your money without worrying about the market's ups and downs, says Diane Young, director of retirement and goal planning products at TD Ameritrade. Since you have decades until retirement, missing a few days is unlikely to do any major harm. While some research has suggested that significant gains happen on a relatively small percentage of trading days, trying to figure out and avoid those days is a strategy known as "market timing," and one that's pretty much impossible to execute, since no one knows when the market is going up or down.
