Are a you a fan of just charging it all and then paying the bill when it comes? According to CreditCards.com that may be damaging your credit score. Not only where you buy but what you buy seems to have an impact on a credit card company’s profile of spenders. Prior to the new credit card law, companies would use the information about your purchases to lower your spending limit.
This made me reflect on two young ladies I saw making purchases of less than $15 at a thrift store. Would that purchase reflect on their credit score or spending habits? The only time I spend less than $15 on a credit card happens when a large department store has a special sale and you get an additional percentage off of any purchase made with the store’s credit card.
Cash on the other hand for certain purchases is hard to trace. Granted, if you are making a small purchase and you have a problem with an item, you would be less likely to be upset about a faulty $15 dollar item than you would for a faulty $150 or $1500 dollar item.
Where and how much you spend with your credit card, gives credit card companies an accurate picture of who you are – at least through your purchases. If you only use your purchases for certain items, then they have a flawed picture. But if you use cash for many of your purchasesthen credit card companies will have a skewed picture of you.
For an example of what types of purchases will affect your credit score, try the interactive shopping cart. Certain purchases decrease your score considerably, while other seemingly innocuous purchases will raise your score considerably.
You can’t always pay for items with cash, especially online purchases but if you are prudent in your spending with your credit card, then your score and credit limit may suffer less.
Trolling the shelves.
This past weekend I spent a whopping $3.72 on things at a thrift store. I bought an Effanbee doll from 1967, two bags of yarn, and two books. I like buying books at thrift stores because you find books that are old and possibly out of print or you can get a hard cover copy of a recently popular book that people have cast off. I saw several copies of David Brown’s “The DaVinci Code” in hardcover available for 70 cents with dust cover. Softcover books from the Mary Poppins series in very good condition were a mere 35 cents. Romance novels abound as a well as other paperback books. Blank journals – they are there too. Considering that you may buy a book for yourself for about the cost of two or three day’s worth of fines owing your own book is more satisfying.
For the hobbyists who like records – more and more people have been getting rid of records. I haven’t looked at the condition of the albums themselves, but there are many that are in great shape. The thrill of the hunt at a thrift store is also interesting. Searching for nice dinnerware, a silver plated tray or a bag of wooden name key chains – you can find them in a thrift store – CHEAP!
Yesterday I went with my mother to a couple of thrift stores. I gave up on the book section because, this was a last stop after shopping at a few places and the books were shelved three deep, behind boxes of other books and records.
Even if you are just looking for one type of item, say fat quarters for quilting, or 11 inch fashion dolls for an art project you can get better quality and often cheaper ones than if you bought brand new ones from the dollar store.
There are clothes, bric-a-brac and other goodies that can be found, but you have to look. Actually, the amount of time spent looking for an item is in direct proportion to the price. You have to search but then make a decision what you want because there will be other people who may want the same thing that you do.
Thrift stores provide inexpensive entertainment and allow you to pursue a hobby for very little money. The cost of entry is free into a thrift store but you can definitely find some valuable treasures for very little money.
Easter is Sunday. For people still scrambling to do some last minute preparations here are some tips.
Making Easter Baskets?
Do you remember what happened to last year’s basket? If you can find it, use the basket or buy an inexpensive basket from a thrift store, and spray paint it with floral paint – it dries more quickly than regular paint. Don’t fill the basket entirely with grass or filler. Put some newspaper beneath the filler and then you wont’ need to use as much. Since Easter “grass” is generally plastic, you can save it and reuse it.
If you are interested crafts during the year, buy some Easter egg dye for later in the year. You can use it to make some type dyed shirts or natural fiber yarn.
Dyeing eggs? Buy the kit which has everything in it, but use the wax crayon to make designs on the eggs. Or try this tip from Martha Stewart for decorating the eggs: wrap them in lace you will get a unique design.
Even if you are running low on time, don’t buy the preassembled baskets, they are filled with items that the recipients generally don’t like or want. Look at what is in the baskets that stores are selling. If you buy a large toy or central item (for an older person) and surround it with small items the recipient would like. It’s the thought that counts, A smaller basket with lots of items in it will look more luxurious than a large basket with the same amount of items in it.
Don’t overlook the dollar store for shrink wrap, flowers or plastic fillable eggs.
Rather spend the money on one useful item instead of small items for an Easter basket. Choose wisely and don’t worry about price. It’s the thought that counts. Plastic eggs can also be filled with a few coins or a crumpled up dollar bill or two.
Is your spending in line with your income?
Even though there are many people who are saving money and espousing frugality, there are also people who are spending – just fewer of them.
The Bureau of Labor Statistics indicates that the current rate of unemployment is 8.1% as of February, 2009. There are still many people who are employed and making purchases.
But are those purchases in line with their income? I heard a woman say that there are no secure jobs anymore. There are some jobs that are more secure than others, yet having job security does not mean that spending should go uncapped. We have all heard of recommended minimum amounts that people should save yet if everyone paid their bills and saved some with money left over is there a recommended amount that people should spend on discretionary purchases?
Convenience and cost have made many relatively happy to spend on small indulgences, like coffee, dining out and inexpensive clothing & accessories. Now that the cost is more of a factor when people want to save, convenience stores which offer snacks, drinks and other goodies on the go are suffering as well. Thrift stores are booming in the clothing and accessories sections. The other sections, such as books and housewares haven’t seen people bustling to buy as much in the used goods trade.
When people make more, they have more discretionary spending available: More money, more to spend, and more to buy.
Investopedia defines disrectionary spending as:
…an important part of a healthy economy – people will only spend money on things like travel, movies and consumer electronics if they have the funds to do so. Some people will use credit cards to purchase discretionary goods, but increasing personal debt is not the same as having discretionary income.
A healthy economy would mean spending within limits only if there is enough money there. How much is enough to have for discretionary purposes? And do you have to spend all of your discretionary funds?
Gas and food prices took a big chunk out of discretionary spending, but now that gas prices have almost halved off of their all time highs and managing at the grocery store what will this mean for the economy and unnecessary items?
Newsweek has a cover story that is titled “Stop Saving Now.” This is giving advice about spending some of the money that people have been saving to boost the economy by taking a risk through investing, starting a business or doing something that could put some zip back into the economy.
This may sound good in theory, but our country has never considered saving to be an important part of its financial lexicon in the past few decades, especially not in the last couple generations. Even speculators and venture capitalists are not investing the way they used to – they may not have the money either.
The last few market sessions the Dow has gone up instead of down which is a good thing. The paradox of thrift is making everyone save more than they possibly should but fear is a great motivator. Buying nothing and saving everything could make people swing the other way and start spending recklessly again when they feel more secure.