Consumer confidence increased last month. On this news, the stock market has soared.

Stocks are fickle. So are people. Just by saying that consumer confidence has increased, then people will definitely feel better about some things. Some people. Those who have more difficult paying their bills regardless of the economic situation they will have not feel as confident about their situation because they are less likely to consume things. 

Saturday, I as in a grocery store and I overheard more than one person complaining about the price of food. No matter what, food items are definitely what people need to purchase. Making your own meals at home, especially if you are preparing food for more than one person is more economical but it is important. Increases in food prices do not make consumers confident.

Proclaiming it in the headlines doesn’t make it so. If you are working and have a relatively secure job, this doesn’t mean that you are free from financial woes. Nor does it mean that you are an optimistic person in general. The Consumer Confidence Index is a survey of 5,000 homes, polling a few people to represent a group. If you polled an overly pessimistic group or an overly optimistic group, the numbers might be skewed.

If you have any money – 401k, investment, mutual fund, etc.  - in the market now, the increase is good for you. Even though it may not change your day to day living as much.

Remember to be diligent about checking your credit card bills and other statements. Additional charges may be added to your bill by either human error or just as a test by scammers to see if the charges go unnoticed then you r account may be charged for a larger amount at a later date.

Double billing and errors happen. Check your bill often, even between payments to see what charges are being added to your bill. If you believe that you are charged twice for something that you ordered, contact the merchant to try to straighten out the situation. Generally, reputable places can check their records. If this does not work, then go to the credit card company.

Notice a charge that you did not make? Directly contact your credit card company.

Phishing scams are on the rise, because of the economy but some crimes are either not reported or not detected for a while. Even additional charges may be added to your cell or home phone bill. Always check to see if additional services are added mistakenly. This is especially true if you have automatic payments charged to a credit card or deducted from a checking account. I had an automatic deduction made from an account for a mortgage before and more money was being taken from y account than it should have been. The amount was very small and was added to my mortgage as additional principal. Sometimes the amount deducted may be keyed in incorrectly and could make you have to pay additional late charges. If you have proof that you have automatic payment and that it was an error on their end, then you may have to go through the hassle of straightening it out, but you will receive a credit.

 Be diligent in your own finances.

Credit card reform has passed in the Senate and will return to the House for a vote.

One interesting area that the separate bills provide for are credit cards for minors. The House bill states that (unemancipated) minors can’t have more than one card, and limits college students to one card. The Senate bill eliminates credit cards for anyone younger than 21 without proof of income or adult co-signer.

Universal default is also eliminated so if you make a late payment your rate isn’t automatically increased on you other credit cards.

Though the other parts of either the House’s or Senate’s bill would be beneficial to cardholders, the provision for minors and college age students is important. Having one card will still allow a student to do some damage but not so much as having several cards and accruing thousands of dollars in non-tuition debt before graduating from college.

Debt is a big issue for many people. Starting your life with excessive credit card debt doesn’t help a college student make his/her way in the world. This legislation if passed by the House will make a difference when students arrive on campus and have to walk through a gauntlet of credit card companies’ tables offering free gifts and generous credit limits for those who have no employment. Proof of income or a co-signer would make it more difficult to completely ruin your credit. [A provision for a reasonable credit limit, depending on the student’s income would have been a great addition as well.]

…Nicholas Souleles of the University of Pennsylvania and David Gross of the consultancy Compass Lexecon calculated that the typical consumer unnecessarily spends $200 a year in interest payments by keeping a sizable stash of cash in savings or checking while at the same time carrying a credit-card balance. In our heads, the two don’t line up.

Time recently posted an article about the problem with credit cards – “The Real Problem with Credit Cards: The Cardholders.” This is true, spending is not the same for any two people. My credit card usage leans toward using my cards as cash. In my mind – paying interest is bad, earning interest is good.  I may not have the cash today but I will before the bill comes or I just don’t want to carry around a lot of cash. No problem. I can do a quick calculation and determine whether or not I have enough to buy what I want. For larger purchases, they are generally not spur of the moment purchases. Even so, making several purchases for $50-$100 can soon throw a budget out of whack – great interest rate or not.

The credit card problem debate is like the gun debate. Guns aren’t bad if you are using them correctly. Some people should never have guns and do not use them wisely. Even people who hunt for food with guns know that these instruments can do great damage. Credit cards are the same way – these are financial instruments that should be used wisely. Some people should have never ever, ever had a credit card in the first place.

Bear in mind that when you use onetime income to meet recurring expenses, you’re likely headed for trouble down the road. And if you’re splurging out of frustration or some misguided notion that you will help rescue the economy, think again. Spending to feel better is a temporary fix and usually just buries you further and makes you feel all the worse later on. Think about how you spent your refund last year. 

This article from Time is on the right track. Spending your tax refund unwisely could pose problems in the future, but using a tax refund to add to your mortgage principal or add to your savings would be a great deal. Splurging our of frustration – we’ve all been there before. Thinking that it will help rescue the economy maybe not but we have been in the  position to think that if we just buy one more thing it can’t hurt.  Splurging without the finances to back the purchases creates havoc on your budget.

How did I spend my refund last year? Symphony tickets. The year before that I used money to go on a cruise and digital camera

These were things I was planning anyway, so there was no harm in using the money for those purposes. In previous years, I invested some of the money that I received from my tax refund. 

Using a tax refund to buy a used car or to pay your rent or something else might be problematic, because where would you get the money otherwise to make the paying and there is always maintenance and upkeep of certain items that you buy.

There are recommendations to spend the money on classes, paying off a loan, donating money, purchasing something that will save you money in the long run or investing. All good ideas but what is really important and impressive is using money wisely. If you need to use your tax refund to pay off your heating bill from the winter or to reduce your credit card debt then do it.

A tax refund is still your money. Getting a large refund may be considered a bad thing by tax professionals but getting a refund rather than having to pay taxes is better, especially if you don’t want to raid your savings. Also, if you have investments in previous years when you earned more in interest and capital gains your taxes may have been higher.

Even with a tax refund, it is important to spend wisely.