Cushion. Wiggle Room. Splurge.

Bank of America has announced that they will end overdraft fees on debit purchases. It sounds like a good thing for consumers and it is, until you wait for the other shoe to drop. Where will B of A recoup the half billion dollars it will lose from this new proposal? When the company augmented their policy to waive the overdraft fee if the account holder was less than $10 in debt, they lost $160 million.

For the consumer, this is great! If you don’t have the money then you shouldn’t be allowed to make the purchase. If you don’t have enough cash and then try to make a purchase you have to put something back. Bounce a check and a business may no longer accept checks from you. Not enough in your bank account and you can’t make the purchase. Seems logical and sounds like a great concept. Yet there is still a nagging voice asking what will Bank of America get in return? If many people opt out of overdraft fees then the bank will lose money. Who is going to pay? What will the consumer have to give up or pay for in return for B of A’s largesse?

Confident about retirement? You may not be ready to retire for another 20 or 30 years or more. Even though that date is decades away saving a small amount that can accrue interest over a long period of time will give you something to live on in your golden years. Employee Benefit Research Institute found in the 2010 Retirement Confidence Survey that only 16% of workers feel that they will be able to have a comfortable retirement. This number has increased 3% over last year, yet most Americans haven’t saved enough money, and don’t know how to plan for retirement. Over half of Americans have $25,000 or less saved.

Retirement money has been cashed out and used prematurely because of joblessness. But too often retirement savings is often considered the annoying clingy friend you lost touch with. You know you need to call and keep in touch, you just don’t feel like it.

Retirement money should be treated like a piggy bank with no stopper. Keep adding to it until it is time to break it open. This doesn’t mean using it as a down payment for a home or for some other purpose. If there is no other choice like a job loss or medical emergency then use it, but retirement has a price.

Unless there is a revolution in the world of and a change in the way people think about long term money plans this could be a big problem.

I like things – nice things like other people do, but I know I don’t want to have to work after I’m 70 unless I want to. Many people come out of retirement or postpone retirement because they have to, not because they want to. Saving a little more and not investing all of the money in one place or type of asset there is a greater chance that there will be some money for retirement.

No calculator can give you the right amount you need to save for retirement. Use the guidelines of saving 10-15% of your annual salary and adjust it to your needs. For every person who has a lot of money to spend in the retirement there are dozens who are barely making ends meet.

Not adequately preparing for retirement seems like a gloom and doom story and it is for some people.

Does sticker shock prevent you from buying quality items?

Think about how much you spend on items you have to replace? A high price tag doesn’t mean quality but a low price tag doesn’t always mean that an item is of inferior quality either. There are some items that cost considerably more than others but when you figure out the cost per use and you can use the item for a considerable amount of time, then it’s a good buy.

Some sites that provide testimonials from other owners or users of products who are satisfied. Reviewers might even tell the length of time that they have owned a product and discuss the price that they paid was really worth it or negated the purchase of a similar item.

The quality of a product does not preclude outliers – where you might get a lemon or if there are people who might have different opinions. Yet if you buy a well-made bag for twice or three times the cost that you generally pay but the item will last for years then the price paid is well worth it.

I like bags and have some that I know will last for years yet I have some cute bags that I bought that are fashionable and will only last for a short while a couple of uses but they were souvenirs and I got my money’s worth out of them – under a dollar. For a bag that I expect to last for years I look for quality rather than a designer name. Designer labels attached to items don’t necessarily have quality to back up the name and subsequent price tag. Though a brand that has gained a following because of consistent quality may not be as popular or trendy as a brand that is the “flavor of the month,” if quality is what you are seeking then the name shouldn’t matter.

A small change in spending will not suddenly make everyone a millionaire but spending wisely will allow you to have enough of what’s needed. The bitterness that people have is because some were forced into being frugal due to job loss or decrease in income. As a person’s situation improves will the bad taste of frugality still linger on?

When you Google “Frugality Sucks” there are close to 400,00 results that return. Even though people are saving money and scrimping here and there they don’t like it. The backlash will happen. When people are feeling comfortable again. Not many people like money saving tips even though they are very general and can be put into place with little effort. Some of the more draconian tactics are like a crash diet such as wearing shoes or socks until you have a hole in them, using less of something you need like toilet paper or driving an extra 5 miles to save 10¢ a gallon on gas. Living within your means is a lifestyle – a healthy spending plan if you will. There is always something you will buy that will make you feel good and some things that you will use and paying top dollar is really an investment – a quality pair of shoes will last longer than poorly made ones. The higher the quality, the higher the cost, but the fewer times you will have to replace the item the more you save.

Not being able to go out and buy what you used to is a common theme on anti-frugality posts. There were some who spent money they didn’t have on items they didn’t need or couldn’t afford which is a hard pattern to break. Becoming a new or forced convert to living frugally or living within your means is like eating right – no crash diets no prepared meals for the rest of your life – it means finding a way to live that suits you. If that means avoiding using a credit card or not shopping without a list then do it.

Dieters look dour and sad because they are missing out on what they can’t have – frugal people don’t have to look that way. The only thing frugal people are giving up is debt and bills they can’t pay.