Consumer credit card debt rises

A new federal report shows consumer debt is once again on the rise, reversing a long recession-spurred decline.

The latest monthly Federal Reserve report showed that revolving credit, made up primarily of credit card debt, increased at an annual rate of 4.1 percent in December, rising nearly $3 billion to $801 billion. December marked the fourth straight monthly increase in revolving credit spending, reversing a recession-spurred decline.
That followed a $5.5 billion jump in November, when the Christmas holiday season kicked off during Thanksgiving weekend. That November increase amounted to an annual rate increase of 8.4 percent. While the Federal Reserve report is good news for Alabama and other states, which rely on consumer spending to stimulate their economies, it's not good for those folks who remain overburdened by heavy debt loads, said Bill Hardekopf, president of Birmingham-based Lowcards.com, a consumer financial education website.
"These credit card debt numbers are a concern but it's too early to tell whether we are all falling back into the trap of spending more than we can afford," Hardekopf said. "People certainly charged more this Christmas than last year."
Hardekopf said the rise in credit card spending could be a positive sign that consumers are more confident in the economy, which was battered by a three-year economic downturn that began in 2007. But, he added, "it could mean that people are struggling and have to rely on using their credit card to make ends meet."
"Consumers are going into 2012 with higher credit card debt but the same wages," he said. "If consumers have a hard time paying this down, we might see delinquencies and defaults start to increase by spring."
Hardekopf, author of The Credit Card Guidebook, said people need to be cautious when spending on credit cards. He said new federal rulings have cost banks and credit card issuers hundreds of millions of dollars, which may have indirectly led to higher rates and fees for consumers.
"Whenever banks incur additional costs or have their revenue stream cut in one area, they typically make up that money by raising the rates or fees in another area," Hardekopf said. "And we, the consumers, will usually be the ones paying the price for those additional rates or higher fees."
Two other challenges loom that could come back to bite those who overdo it on credit card spending as the economy improves: an unemployment rate that remains historically high and gasoline prices that are on a pace to this summer surpass the record $4.05 Alabama saw in September 2008.
"Even though the unemployment rate is dropping, it remains historically high and there are still a number of people out of work," Hardekopf said. "Gasoline may be the only fly in the ointment that hurts an economic recovery. When gas prices go up, everything goes up."


Debt elimination tips:

Raise your credit score. Pay your bills on time, pay down your debt and limit your credit applications. This will this help you qualify for the best terms and interest rates on loans and save thousands of dollars over your lifetime.
Set up a plan for daily spending. Save for the bigger purchases and occasional splurge without resorting to plastic. If married, make sure both spouses have input. Eat out less or use coupons, and immediately apply the money you saved to your credit card balance. If you have multiple credit cards with balances, pay off the balance with the highest interest rate and then move to the next-highest rate.
Set up an emergency fund. All couples should have an emergency fund of six to eight months' worth of living expenses held in a safe place such as a money-market fund. Make savings consistent and untouchable by setting up an automated deposit from your paycheck into your savings account.
Monitor your accounts. Even if you divide up bill-paying and investing duties, both parties should be able to easily access accounts to know what is going on with your money.

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Make saving money a family practice

One of your children doesn’t understand the importance of saving or gets upset when their older sibling gets more allowance and the other doesn’t agree with you that they need a summer job. Sound familiar?
Financial irresponsibility at a young age can lead to a number of personal or family issues down the road.
That’s why it’s important to make saving a consistent priority with all family members, no matter their age. It will make a positive impact on spending habits later in life.

An important lesson to teach is that saving can be fun and rewarding. When children learn how to be financially responsible at a young age, they are more likely to grow up being less dependent on others for money. Children can learn a great deal if parents provide insights on budgeting. So you may be wondering where to start.

There are a number of simple ways to get your family on the right track toward saving including:

Have everyone contribute: It’s one thing to tell your family that saving is important and another to actually do it. The best way to reinforce habits of saving is to involve the entire family so that everyone receives a reward for their efforts. A great way to have the entire family participate is to start a family vacation fund. Obviously, the kids won’t contribute as much as the parents but having everyone work toward the same goal and having everyone reap the benefits is a great way to reinforce the behavior of saving.

Openly discussing ways to save money: When your family is grocery shopping, planning a vacation or going out for dinner, talk about what you’re doing to save money. At the grocery store, it might be taking advantage of coupons or buying a generic brand instead of name brand. When out for dinner, discuss how choosing chicken instead of steak can make a big difference when the bill comes. When planning a vacation, make it a point for everyone to know that you’re traveling during the off-season or that you’re staying with family or friends instead of a hotel to reduce expenses.

Teach wants versus needs: Even as adults, sometimes it’s difficult to determine wants from needs. However, it’s important the whole family knows the difference. For example, mom or dad may need a car or truck to get to work every day or the oldest child might need glasses in order to see.

Enforce the habit of saving first: Whether it’s the parent receiving a paycheck, or a child receiving an allowance, it’s important to verbalize the importance of putting a portion of it into savings. Getting in the habit of “paying yourself first” at an early age can have long-term benefits.

Involve the whole family in creating a budget: Write down what your monthly budget is for food, housing, transportation, reoccurring bills and non-essentials. To keep everyone accountable and to stay on track with expenses and savings goals, post your budget where everyone can view it. While developing a budget or getting one back on track may take some time, it will be time well spent when you’re able to meet your financial goals.

Helping each other get into the habit of saving can lead to lessons that last a lifetime. Remember that it’s important to save money no matter what stage of life you’re in.

While you’re working to set up your family savings plan, speak with your local banker and communicate your goals with them. They can offer you and your family advice and suggestions when it comes to household savings. Let the savings begin!

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6 Common Excuses for Not Saving Money

Have you ever settled on a new exercise program, only to get a bad cold a few days in and happily throw yourself on the couch, relieved to have a handy excuse? Excuses must be human nature; I know I usually make them when I'm facing something that’s new, that's hard, or that I just don’t enjoy. And I’ve certainly made excuses when it comes to money. In the years that I’ve been writing about personal finance and investing, I’ve also heard my fair share of excuses, mostly from readers who don’t agree with my advice. The problem is, unlike good financial habits, excuses are easy to come by, even though most of them just don’t stand up to reason. Check out some of the ones I’ve heard most frequently so far.

Excuse: “I don’t make enough to save money.”

This may be true for some people, especially in this economy, but not having any money left at the end of the month doesn’t necessarily mean you can’t afford to save. After all, most people spend money on a number of unnecessary things each month, such as restaurant meals, impulse buys, and cable TV. Finding some money for saving doesn’t have to mean voluntarily living in a dark, unheated room without any entertainment or luxuries, but if you’ve declared your budget too tight to put money aside before even looking for ways to reduce your spending, you’re making an excuse.
Excuse: “Interest rates are too low to bother with.”

Interest rates are at an all-time low right now, and that does make putting money into a savings account a little, well, disheartening. However, it’s likely that many of our grandparents — and certainly our great-grandparents — may have gone years without using a bank at all. Now that banks provide a safe place to park your cash, they pay interest in return for holding your money. Interest is a great way to grow your savings, but even if you get almost nothing, at least you have some cash when you need it. Plus, if you’re able to put enough away, you can always look into investments with the potential for higher returns, such as stocks and mutual funds.

Excuse: “I have too much debt to put money into savings.”

If you have a lot of debt, it’s important to focus some serious effort into getting rid of it. But that doesn't mean that every bit of money you can spare should go straight to your creditors. In fact, it’s more important than ever to save when you’re in debt because it can help you avoid digging yourself in deeper. If you don't at least have a small emergency fund, you'll be forced to pull out your credit card when unexpected expenses — such as a car repair — inevitably arise.

Excuse: “I’ll catch up later when my salary is higher.”

In my experience, quite a number of people actually follow through on devoting money to savings when their salary increases. The problem is, if you wait too long, the time value of money can make it impossible to catch up. Consider this — if you start putting $1,000 a year into a mutual fund with a 15% average return when you’re 25 years old, you will have more than $340,000 in the bank when you turn 55. Start 10 years later, and you’ll have to save three times as much per year to even come close to $340,000 — and you’ll still fall short by about $25,000. The bottom line is that if you start saving earlier, you won't have to work nearly as hard as if you put it off.

Excuse: “I won’t be able to save enough to make a difference."

This is one excuse that often comes up when saving for retirement. With many experts citing figures like a $1 million retirement fund, it’s easy to be discouraged. What many people forget, however, is that even a little bit of extra money can make a difference in your standard of living during retirement.  If you retire today, you’ll get about $1,100 per month from Social Security. Depending on where you live, that’ll probably allow you to get by, but you won’t be taking any holiday cruises. But what if you were able to save $100,000 for retirement? It’s a small sum compared to $1 million, but it could mean an extra $500 per month in income during retirement. That’s enough to make life a lot more comfortable. The best part is, it only takes savings of about $1,000 per year, or $83 per month (assuming you save for 35 years at 5% interest) to arrive at that sum.

There’s an old proverb that says that if you don’t want to do something, one excuse is as good as another. When it comes to making changes to how we handle our money, most excuses arise from a desire to avoid rocking the boat, even when a financial shakeup is often just what we need. Excuses, therefore, act as a mental escape route, allowing us to avoid tackling our finances, rather than facing them head on. And there’s no good excuse for that.

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Summer Deals that Won’t Hurt your Wallet

Even when working on a budget, it’s still nice to go out out for a bite to eat every once in a while. Unfortunately eating out can cost big bucks and can put your date night plans on hold. Thanks to the summer season, though, date night may not come to a close forever!

Restaurants from all over the county are offering unbeatable deals for any time of day. Many are even offering discounts on happy hour and appetizer combos too, just be sure there is an official designated driver before hitting the town!

To find deals at a bar or restaurant near you, go to: pbpulse.com

Once there you can enter your zip code and the type of cuisine you’re craving.

If going out to dinner may not impress you, how about having date night during the day and visiting the local museum. Currently happening at the Norton Museum of Art are several exhibitions that are sure to please everyone.

Now until September 4 is an exhibition featuring costumes from movie and TV, including films such as Star Trek and Batman.
For history buffs, there is the Eternal China exhibit. This exhibit features art and findings from the ancient days of China and famous tombs. This exhibit is will be at the museum until July 17.
And for those who revere photography, there is an A to Z photography exhibit occurring now until October 16.

To get more information on the exhibits and other services the museum offers, such as Art after Dark, visit: The Norton Museum of Art webpage

If being outdoors pleases you more, then how about going the one thing Florida is most famous for…the beach! At Lantana Beach you can either bring your own cooler or walk a few feet and pick up lunch at the Dune Deck Café. There they offer everything from salads to subs, burgers and more. Or if you’d like to bring your pooch along, you can visit Juno Beach, which is pet friendly. Or if you’d rather walk around than lay in the sun, try visiting Lake Worth Beach and its famous pier.

No matter which beach you visit you’re guaranteed to have fun in the sun and you’ll only need some quarters for parking, maybe some cash for lunch and a lot of sunscreen.

Sources:
The Palm Beach Post
The Norton Museum of Art website
Dune Deck Cafe website

Planning Holiday Spending

By: Nancy Kvamme

Time to get your Christmas shopping lists ready. I know summer is just starting but it is also time to get a jump start on your Christmas shopping. I was at a store the other day and they were putting out Christmas decorations already. We also got a Christmas card catalog at our office last week.

Sit down the make a list of everyone you are planning on purchasing Christmas gifts for, along with a budgeted amount for each and any ideas you may have already. Add up the amounts you have budgeted, by doing this you will have an idea of the total amount you are planning on spending. Then make a list of extra expenses you may have, such as holiday parties, extra dining out, wrapping supplies and other additional expenses.
By determining your extra holiday expenses now, you will be able to spread it out over the next few months instead of possibly putting a majority of the expenses on credit cards and paying them off. If you put the expenses on credit cards and not pay them off right away, you will have the additional interest and finance charges.
If you are able to budget for the extra expenses now, you will be less stressed around the holidays and will be able to enjoy them more.

Via http://www.divinecaroline.com/22306/115509-planning-holiday-spending#ixzz1QDEpRMpT

The Power your House is Using and What it’s Costing

You may look at your electric bill and wonder why your cost isn’t going down even though everything in your home is off. That’s because it only seems like everything is powered off. There are many everyday household items that may be off, but when they are plugged in they’re using almost the same amount of energy as if they were in use. In addition, the summer months are the worst because so many things are kept on that usually wouldn’t be used. The air conditioning may be kept on all day to keep the house cool and kids are home on vacation and watching TV and playing video games. So what can you do to lower your bill?

The Search for the Highest Energy User
First, find out which appliances are kept plugged in all day. You can either do this yourself or sign up for a power audit with your electric company. Basically, the technician will come and read your meter, then take a look around your home. They will be looking for what is always plugged in and tell you how much energy it is using and how much that’s costing you a month. The most common offenders are cell phone chargers, coffee makers, HDTVs and video game consoles. Together these add up to almost 60 watts of power being used, and that’s with these electronics in the “off” mode!

In addition, ask yourself if you have double of any appliances and if they are older than ten years old. This is most common with refrigerators. Many families have an extra fridge for soft drinks and snacks, but this could be hindering instead of helping. Keep in mind that most refrigerators over ten years old were made before energy efficiency was a requirement or even a thought.

The Effect your Electronics are Having
Since many electric companies use fossil fuels to power their plants, the more electricity consumers use the more greenhouse gasses are released into the air. And as most people know, greenhouse gasses are accused of causing ozone depletion which can lead to many changes in the earth’s atmosphere and weather.

What Does this Mean?
Electronics and appliances that are unnecessarily plugged in and using power can cost up to $200 a year! However, making a few simple changes can help lower your bill and your carbon footprint. Ask yourself if you need the spare fridge. Most refrigerators work more efficiently when they are fuller, so unless the extra fridge is completely necessary, consider dumping it. Also, unplug cell phone chargers and the coffee maker during the day. You can plug them in once you get home or before bed and this will save energy and money. Also, try switching out your incandescent light bulb with a CFL. Though CFLs may cost more at the register, they use 75 percent less energy and can save you $40 or more during their lifetime!

To learn more about energy efficient appliances check out the Energy Star website and to calculate your carbon footprint click here.

Sources:
Energy Star
Science Daily
wptv.com-News Channel 5

Check out these Cheap Foods and Easy Recipes!

With prices on gas and groceries rising, here are some foods that are easy on the wallet and the eye. And to make things even less complicated, try these simple recipes to go along with them.

Non-fat, plain Greek yogurt: Greek yogurt seems to be all the craze lately but for good reasons. This product has a smoother, richer consistency than regular yogurt and can have up to twice the amount of protein. In addition, Greek yogurt is easier to digest because of its low amount of carbs which makes it a great option for those who are sensitive to lactose or are diabetic. Try pairing this creamy treat with some fruit and you’ll get something similar to this recipe.

Baked Nectarines with Greek Yogurt

Whole Grain Pasta: Just like its well-known and regular brother, whole grain pasta is cheap and fast. Instead of just pairing it with pasta sauce, try using this recipe to jazz up your weeknight dinner without too much extra effort.

Whole Grain Rotini with Cherry Tomatoes and Basil

Bananas: Bananas are a delicious fruit filled with essential nutrients and are also easy to eat on the go. This tropical, yellow fruit has ten percent of the recommended dose of potassium, 16 percent of the recommended value of fiber and 20 percent of the recommended value of vitamin of B6, which helps maintain a healthy immune system. Try this recipe, however, if you’re trying to impress a date and get your sweet tooth fix.

Chocolate-Banana Filled Crepes
*if you don’t want to try your hand a homemade crepes, most supermarkets now sell pre-made crepes that you could just heat up

Brown Rice: Brown rice seems to be an underutilized ingredient in the kitchen. It’s known for being dry and sometimes tasteless, but just like other simple foods, it only needs a few ingredients to make it shine. In addition, this food is packed with fiber, protein, calcium and lots of other healthy essentials. Try the recipe below and it’s almost guaranteed that you’ll be hooked!

Brown Rice Salad with Citrus Vinaigrette

Eggs: Eggs are always an easy fix, whether in a brownie or scrambled, eggs are used in a variety of ways, and for good reason. Eggs contain protein, Vitamin D, which helps absorb calcium, and they also contain selenium, which can help prevent blood clots. In the recipe below, try eggs as an appetizer in another popular way. Boiled.

Warm Spinach Salad with Eggs

Hope these ingredients and recipes help when you’re in a bind or just want to try something new and full of flavor. Enjoy!

Sources:
HealthOnlineZine
MyHealthyFoods
Tao of Good Health
LiveStrong.com
News Channel 5-wptv.com
Food Network