This  woman has done a great thing for her wallet. She has saved over $300 a month by making some changes that were not huge but they added up to something greater.

It isn’t always easy to chop things out of your budget, but none of the changes that this lady made seemed as though she was going to have to start eating noodles or cheap food in order to save money. She made cuts in some areas and kept other things  to make up for the slack. She got rid of her home phone but kept her internet as a means of communication  (plus Skype).

Kudos!

If other people made cuts like she did, this could affect their wallets. I know a lot of people who will not cut their cable, because it may be the  ”only free entertainment” that they had. Not everyone needs what they have been spending on. She didn’t cut out everything just the things that she could live without. Thinking about what you spend your money on is imperative.

There are naysayers who say that people who are saving more and buying less are contributing to the poor economy. Though people spending less does have an effect, were we, as a nation, spending money we really had or were we robbing ourselves?

If you’ve got a decent income, changing your brand of coffee or being the last person in your zip code to buy an iPod just isn’t going to get you very far. To make a real difference, you are going to have to cross out a major line item. The private school. The house with the great address. A parent staying at home with the kids. Or the plan to retire early. These are not frivolous, spendthrift things. Responsible grown-ups can choose among them. It’s just that most of us can’t choose every single one of them. 

The columnist makes a good point about making choices. Although certain incomes cannot afford private schools. Though the salary may be covered, there are also other extras, such as fund raising events, and other expectations from the school. Buying a home in an area you cannot afford is what happened to many people. Though a person might be able to pay the mortgage; it’s the extras that make a difference. In the case of a home, taxes, maintenance, and utilities add up to large extras. Other choices, require big changes and additional strains on your wallet that you may or may not be able to make. 

If people are truly living within their means and make changes to their daily living they can do things. A parent staying home with the kids if both parents are making minimum wage is very difficult. Early retirement, without a sizeable nest egg is not easy to do.

The private school. The house with the great address. A parent staying at home with the kids. Or the plan to retire early. 

All of these items seem like luxuries, because having a house with a great address does not mean that there is a less expensive house, in a safe neighborhood with an address that is less chic. Private school is more costly than public school because of tuition and even with public school there are fees to be paid, fundraisers, field trips and other expenses. If some of the people were responsible and honest with themselves about money and what they couldn’t afford, then they might not have to make those decisions after they have become entrenched in a certain lifestyle.

Making reasonable choices that do not affect the quality of life for people is a personal decision. Taking a child out of a private school to make new friends, depending on the age of the child can be traumatic. Changing schools can be stressful depending on the child. 

Balancing your budget realistically means that when you buy a home, utilities increase, taxes increase even if you have a fixed mortgage, tuition increases just as cost of living if you decide to retire early.

I disagree with the author, little changes really will make a difference. Yet, sometimes you have to make the hard decisions up front.

The president’s speech about the economy spoke volumes to regular Americans but did nothing for Wall Street. The markets are still down though people are anxious and ready for improvement.

“There’s a lot of nervousness,” said Terry L. Morris, senior equity manager at National Penn Investors Trust. “It’s a tug-of-war between the news that’s out there and the fact that the market has already gotten pounded.”

“I think the market is cheap where it is, but it seems to want to get cheaper,” he said. 

There is a shakeup going on in the market. People are doing what they want to do by spending less, not making major purchases, because they are scared. Scared that they will not have a job, and unable to get the credit they formerly did. It is not easy to do what you wanted to do without money or dwindling assets.

Ben Bernanke suggests that bad borrowers should be bailed out as well. Though I disagree with his suggestion that those who took out loans that they couldn’t afford, though they are a drain on the economy, should be assisted.

“Some borrowers presumably knew what they were getting into,” Bernanke said before the House Financial Services Committee. “But from a public policy point of view, the large amount of foreclosures are detrimental not just to the borrower and lender but to the broader system.”

On the other hand, those who could afford to repay a loan but faced some sort of difficulty along the way, such as a job loss or health issue then definitely help those who want to repay their loans. The people who were unable to repay and were high risk  borrowers should not have received loans in the first place.

As Bernanke says that foreclosures are detrimental to the broader system, this is true, but the system needs a shakeup and greater accountability on an individual lending level. If a person says they make a certain amount of money, can’t verify it and regardless of their poise, charm and wit, if they can’t repay, they shouldn’t receive a loan. Of course now we know that greed and common sense are diametrically opposed so it is a challenge for people to be responsible. If the government bails out people who took out loans that they knew they couldn’t repay or had no proof of being able to repay then this would just be rewarding bad behavior. Large corporations are being chastised for using government money unwisely, so why should individuals be held to a different standard?

The only people affected by plummeting real estate prices are the ones who bought a house that cost more than they could afford, hoping for a spike in value so they could sell at a profit or take out a new loan based on an increased value. Their home wasn’t just a place to live; it was an investment they thought they could liquefy at will. If we’re saving these poor souls from the 26.7% drop in their investment, we should give twice as much aid to everyone who has lost approximately 50% in the stock market since its peak.

If you have an American Express account, you might be offered $300 to close your account. American Express is offering $300 to some customers to close their accounts, in essence so that Amex can be at the front of the line to get their money back. Those given the offer must pay off their balance by April 30 and will forfeit bonuses such as Membership Rewards points.

“It’s a tool that has been used in the past to motivate borrowers to close off balances,” says Scott Valentin, an analyst at FBR Capital Markets. Valentin cited an instance some years ago where National City offered $200 to borrowers who would close their home equity lines of credit.

“It’s not necessarily cheap, but it is effective,” says Valentin. “The key is to identify the high-risk borrowers.”

If only a certain number of people are getting the offer,  those who are considered high risk borrowers, then if they were such high risk borrowers, why were they loaned money?

This move is an effort to stem the tide of future credit card delinquencies. Maybe people weren’t high risk borrowers initially, but then they had some problems paying off their debt. Credit cards are not evil but it is how you use them. If there is an individual with a large balance on their card who is given the offer, who says that the person would be able to pay off the bill?

Will the Recession Doom the Last Sunday Blue Laws? Interesting… I was just thinking over the weekend, that since Westfield mall is cutting back mall hours, that it might also work to go back to stores having limited hours on Sundays. I remember as a child that downtown stores were not open on Sundays generally, except once a month for a special sale. Reducing the number of hours that people work is one way to save. 

Sunday Blue laws are still in effect in some areas that ban the sale of liquor on Sundays. 

“States realize that consumers will migrate to a place where they can buy what they want. And whatever their reasons are for not wanting to sell on Sunday, these states realize they’re paying a price for it in foregone tax revenues. So once the economy goes bad, then the cost of their policies are apparent to them.” – David Laband

Being able to shop and buy what you want when you want is a great thing – otherwise there wouldn’t be 24 hour grocery stores, but if the post office wants to reduce the number of days it offers home delivery, then why stores reducing their hours could not be far behind. When business is good, hours increase. When it is bad – they decrease… Some restaurants do this – they may close early depending on how many customers they have at a certain hour.

Reducing the hours that stores are open will work in various ways. If a store doesn’t have much direct competition and closes because of lack of business then no one really suffers, except the odd customers or two who needs something during off peak hours. If there is more competition in the area and one store remains open because their competitor does, yet both don’t really reap profits, then they may both end up being losers and the stores could ultimately close.

France has some opposition to Sunday shopping. It would increase revenue, but much like the blue laws, French Sunday shopping opponents believe that having the shops open on Sundays would make a move toward the seven day workweek.

I don’t know many people who only have Sunday to do their shopping. Even when major stores like department stores were closed on Sundays there were still drug stores, grocery stores and restaurants open. Sunday was reserved for family time.

Actually who spends quality time shopping? Hardly anyone is going shopping anymore to buy things that they don’t need. In order to preserve the choices that we have as consumers, having a store with fewer hours would be a good thing because then that could mean that more stores will still be in business.