I mean, it’s still there and all, but does it really mean anything?

And if it does mean something, what more can retailers do that they already haven’t?

WalMart Stores, Radio Shack, The Apple Store, Best Buy, KMart, Kohl’s, Toys “R” Us, and Target have already had their Black Friday ads “leaked.”   I can’t really believe that these leaks were anything but completely planned: orchestrated to create buzz.

Black Friday just doesn’t seem that special anymore. It’s gone from being a crowded, but otherwise lighthearted, shopping day to a spectacle.  People with time on their hands and a few extra layers of clothing stand out all night to grab a few loss leaders, many of them hoping only to ride the wave of hype to sell them on eBay for profit.

Then there are people who just stay out of Black Friday completely, waiting for post-holiday sales or maybe regifting instead.

Retailers need us a lot more than we need them, frankly.  It’s their bottom line that suffers if we don’t go out the day after Thanksgiving.  We, on the other hand, risk blowing our spending plan for indulgence in frenzy and a New Year’s credit hangover.

As Black Friday gets crazier, just picture Happy Days.  And change the channel.

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This article on MSN Money misses a bit in the title:

Banks punish perfect customers

The article is another one on how credit card companies are hitting otherwise conscientious users with annual fees.  The users that are being targeted now are those who pay their bills on time and don’t carry a balance.

These are not perfect customers as far as the bank is concerned.  They are close to the worst, actually: just one step above those customers that declare bankruptcy and discharge their debts.  Convenience users are not very profitable for the credit card companies, and could well cost the companies money.

Who are the best customers?  Customers that pay the minimum balance each month for years and years.  Even better are ones that do so while going over their credit limit and occasionally are slightly late on a payment, triggering more fees.  They’re the profitable ones for the banks.  If it weren’t for the profitable customers, the credit card companies couldn’t afford to hold onto the unprofitable ones.  But what’s happening now is that the CARD Act is clamping down on a number of these very profitable practices, and everyone suffers.

The tone of the article is interesting, in that it suggests that credit card companies exist to make the lives of responsible people easier.  That’s just not true.  They exist to make money.  They don’t make money by letting people like me get three weeks’ use of their money, interest-free, and a rebate to boot.  They tolerate people like me because I might fall on hard times, carry a balance, and then they’ll make money off of me.  They’ve kept me around only because I’ll go elsewhere if they make life too difficult for me.  (Perhaps they already want me to go elsewhere.  I don’t really know.)

If most people are responsible with credit and pay their bills in full, then we’ll mostly be convenience users and will have no choice but to pay fees.   But the convenience users are starting to pay fees now because banks are needing to look for sources of income, as it’s been made clear that credit card users shouldn’t have to face the full consequences of their misdeeds.

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I got suckered into reading this article on MSN from the title:

A $10,000 Social Security hit

There was a stock photo of two obviously very depressed seniors right next to that headline.  At first I thought, “Man, the other shoe dropped fast!” but the article revealed the context of the $10,000:  no cost-of-living adjustment for 2010.

Here’s the math on how “no adjustment for inflation next year” translates to “$10,000.”  The average monthly Social Security check is $1,161, according to the article.  The 3% cost-of-living adjustment they won’t get means $35 extra per month, from now on, that they won’t get.

Compound this $35 per month deficit at a 2% annual rate (a savings account-ish rate), for twenty years, and you arrive at a little over $10,000.

Yes, the headline “A $10,000 Social Security hit” is a lot more sensational than something that mentions cost of living.  I may have read through the headline had it been like that.  What the headline did do, though, is call to attention that this isn’t jut a loss for next year, but for every year after that.

One of my colleagues said that if given the choice between a raise and a bonus, you should always go for the raise.  Why?  Because the bonus is one-time, and the raise is ongoing.  The same is true in the other direction:  the $250 that President Obama would like to give to seniors in order to make things hurt less is one-time, but the lack of a raise is ongoing.  It’s compounding in reverse.

This lack of COLA increases the disparity between rising prices and benefits, and accentuates that inflation makes us poorer.  Benefits don’t need to be cut directly to reduce the real cost of the program.

The benefits just need to be held where they are to reduce the real cost.

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Caught this in a tweet from Wise Bread:

Latest bank fee is for paying off credit card on time every month

The target of new fees for credit card issuers is people who haven’t paid them yet, among others. I mean, why should people who carry a balance, miss payments, or go over their limit have all the fee-paying fun?

The CARD act hurts just about everyone with regard to the price they pay for credit, including people who use it responsibly.  The extra regulations restrict how credit card issuers conduct business, and add non-productive cost to doing business.  This raises the cost that issuers must bear, meaning that consumers, on average, get less of a good deal than they did before.

The article mentions that people with good credit have the opportunity to negotiate with the issuer, as well as to look for greener pastures.  Canceling the newly-non-free card could hurt that person’s credit rating though, as it affects the extent of credit history.

Though I don’t like that I, and others, could end up paying for credit even without carrying a balance, I can’t say that I really blame the issuers.  People who don’t carry balances are the least profitable for the credit card companies. They get a free ride, and the merchant’s fees that are triggered by the purchases they make probably barely cover the administrative costs.  It’s difficult to argue that convenience users of credit cards, after having gotten the convenience for free for so long, should continue to get the convenience for free as the issuers’ costs rise.

I haven’t been notified yet of any new fee action on my account, but at least I won’t be as shocked if it happens.

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I tell you:  It just doesn’t pay to be human anymore.  Big or small.

I’m well aware of how being fat costs money.  But there are now rumblings on the possibility of the following:  If an individual, or family, can reasonably afford health insurance, but does not get it, they face the possibility of being fined: $950 for an individual, and up to $3,800 for a family.  (These are the current numbers as of 9/9/09.)

Presumably the people that would opt out of health coverage would be healthy people, right?  Those that take care of themselves and go to doctors for maintenance visits only?  Either that, or people who are rich enough that they not only don’t need health insurance, but can also pay out of pocket to get treated correctly, and immediately?

You’re fined if you do, and you’re fined if you don’t. You pay to play the game, and you pay to not play the game.  “Make your choice.”

Just in case this appears too lucrative for the insurance companies, with all of the extra business driven to them because consumers were made offers they couldn’t refuse, they’re not off the hook.  As of now (9/9/09), there’s a $6 billion tax that’s in the works for them.

When you hear “health care reform,” think of stuff like this.  Think about whether this is going to help things or hurt things, and for whom.  Think about who’s going to get soaked in the process.

Then, plan accordingly.

Hot hot hot money questions at Cash Commons

We drove up to my parents this weekend.  On the way through central PA my wife saw a sign in someone’s lawn:

Cash for Clunkers is War on the Middle Class

There was an interesting discussion over at Money Quantum (request a pre-launch invitation) on the topic of economic stimulus.  Flexo posed the question:

Do you think the measures the government has taken to stimulate the economy has been worthwhile?

Furthermore, should those who disagree with the economic stimulus, in order to show that they stand by their convictions, reject all the benefits personally? Can someone who takes advantage of Cash for Clunkers, for example, truly reject the concept of economic stimulus?

Basically, is it hypocritical to oppose economic stimulus and take advantage of economic stimulus at the same time?

We weren’t in a position to take advantage of C4C but I don’t see any problem with doing so if it makes economic sense for my family.  I also see that economic stimulus (a fancy word for bailout) is invariably going to make us poorer as a whole.  Over the course of my life there will be a handful of such economic stimuli that I’ll be able to take advantage of.  There will be far more that I can’t take advantage of, yet will pay for indirectly through rising deficits, rising federal debt, devauled currency, higher taxes, and less choice in what I can buy.

My recent jazz concert was another great example.  Everyone in this country pays to maintain all of these (awesome) military musicians, but only a few people take advantage of it.  I mean, heck, the concert is already put on, the jazz is some of the best most people will hear anyway, so why not?

“Wait a minute,” you might say.  “Isn’t the military just subsidizing an art form that just isn’t economically viable anymore?  Why can’t these guys get jobs in the real world?”  Well, it is harder than it used to be to support a big band, and gas is getting atrocious, but hey, it’s still really cool!  So why not?

But it goes beyond taking advantage of your own personal favorite government freebies.  I contend that it’s just about impossible to avoid stimulus altogether.  Do you take deductions for your charitable donations?  Did you take advantage of that $8,000 homebuyers’ credit?  Tax credits for adoptions?  Deduct your mortgage interest?  These are all stimuli designed to encourage consumer spending in one particular area.  If you didn’t take advantage of these, there are probably others that you did take advanage of.

 Might as well funnel some of your own money back into your own pocket.  It’s leaving it ever faster.

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Businesses need to do everything in their power to weather this downturn.  It should be a great time for customers to get great deals because of this: they need to keep the cash flowing in.  Customers should expect deals, and they should be treated with respect, because customers can go to a competitor.

Some businesses just don’t get it, though.  It’s as if they are in the business of chasing their customers away.  I fully support their right to do so, but I also fully expect to be able to exercise my rights not to be a patron.  Here are six things I’ve experienced that make me wonder about people’s business acumen:

• Don’t honor your coupons. Or change the rules when it suits you.  One Sunday we were going to have lunch at Sunset Thai.  We had an Attractions Book and Sunset Thai had a coupon available that had no restrictions for Sunday.  When we got there, there was a sign on the front door saying that they weren’t accepting coupons today.  Bad move.  Fortunately Camille’s Sidewalk Café did accept our coupon, and not only that, printed out another one good on our next visit later in the month.  One guess which one did a better job of keeping us around.
• Don’t honor advance purchases made when the store was under previous management. Taking over a business means taking over the entire business, including the customers.  We had some tickets from a while back for Fun-Land, and I had intended to use them for miniature golf with my daughter and a friend, and thought that I could, because I was told they didn’t expire.  Well, those tickets were no longer any good.  Apparently, coupons that never expire actually can expire if management deems it convenient.  The guy at the ticket counter just shrugged his shoulders.  Well, I paid for the new tickets because I had promised my daughter, but I probably won’t be back there again.  Fun-Land blew it.  Had they let me change in my tickets, I would have told other people that they honored the old tickets.  But they didn’t.  Their loss.
• Actively show disinterest in what your customers are saying. A while back I went to Advance Auto Parts to get oil filters for one of our cars.  I had just found out that you have to check to see that the rubber gasket didn’t stick to the car when you removed the old oil filter.  When I went to buy the new filter I started chatting to the guy at check-out about it as he rang it up.  No one was behind me in line.  He made it really clear to me that he didn’t care, and cut me off mid-sentence.  Regardless of whether my story was interesting or not (I at least thought it might be helpful to someone), it’s a really bad idea to essentially tell a customer to shut up when there’s no one else in line.  Sorry for wasting your valuable time, buddy!  I’ll just crawl back into my hole now.
• Make it a chore for people to spend money. I used to be a big arcade fiend.  One time when I was home visiting my parents, I went to the mall and had about 30 minutes or so before I met up with my family to go back to their house.  The arcade was still up and running, so I went in to play a game or maybe two.  I didn’t have any change, and the guy changing out the tokens wouldn’t just give me two tokens and two quarters back for my dollar.  (This was after he tried to kick me out because he thought I was still in high school, and it was during school hours.)  So, I bought a soda (to get some quarters) and then the guy chased me out because I had a soda.  I was the only customer in the place at that time.  How hard did he really want me to work to spend money there?
• Charge them whatever the heck you want, and don’t fix the error when they point it out. One time, before Borders Books and Music outsourced its food and drink services, the cashier rang up a drink with the wrong price.  I pointed out the error.  The cashier just looked at me, and continued to hold her hand out to take my credit card.  Since there were people behind me, and the price difference was insignificant, I paid her price for it.  I overheard the cashier say that she charged different prices for the drinks all the time.  I later told the manager about it, and she ended up giving me the drink for free, but I still shake my head at what that cashier did.
• Slam the door on them.  Literally. I was about to enter a Ritz Camera, near closing time, just to check a price on something.  As I approached the door, I saw one of the employees pick up her pace to lock the door before I opened it!  And she looked me in the eye as she did it!  Oh well.  Apparently I’m not the only one who chose other places over Ritz Camera, as they’re now bankrupt.  That location and another one in our area are gone.

It might be easy to say that this is the employees’ doing and not the owners’ doing.  Not true.  Business owners are responsible, and accountable, for how their employees treat customers. Owners should not keep employees that pull these maneuvers.  With unemployment pushing 10% now, they shouldn’t have to.

It also might be easy to say that I’m just asking too much and that I’m not worth keeping around anyway.  In better times, maybe.  There are certainly bigger spenders than myself.  But people on average have less disposable income available than they did a few years ago.  Things are tighter.  There will be more people with my kind of spending levels than with higher spending levels.

Any other ways that a store has slammed the door on you?

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Caught this article from a carnival on Earn What You Spend:

The End of Personal Finance: Decades of advice turn out to be so much garbage

As Ring Lardner said, “Them’s fighting words.”

Personal finance is far from throwing in the towel, and if anything, will be more important in the coming years.

Author Helaine Owen happily assumes the role of Monday-morning quarterback to call into question the advice of MSM gurus such as Suze Orman, Jim Cramer, and Jean Chatzky after seeing it fall apart before everyone’s eyes in the past months.  It’s not especially difficult to see that stocks were not the place to be recently.  Owen finds it distasteful that the Giant Personal Finance Advice Machine promotes individual empowerment for tackling finances, with the (reasonable) flip-side that if you don’t tackle them, and instead get into trouble, that it’s your fault.  Clearly seeing that the advice being fed to us is of little profit to us, she admits that personal finance is not likely “to crawl away and die anytime soon for a simple reason: We think we need it.”  She then gives a hat tip to those calling for change at a federal level.

Personal finance is personal. Suze Orman gives advice — some of it reasonable, some of it otherwise — but the way she takes care of her finances is different than the way she recommends we take care of ours (whoever “we” are).  As she should: Suze Orman’s finances are hers, and hers alone, just like our finances are ours, and ours alone.  Suze Orman has become very successful helping people to wake up to their problems and dig themselves out of them, and I’m not taking away any credit she should get for helping those people.  But she cannot possibly know, or care, about those people’s finances as much as is necessary.  It is our job to take care of our finances.  It can’t be anyone else’s job.

The real problem that’s coming up has nothing to do with whether Jim Cramer or Suze Orman or Jean Chatzky or Liz Weston or even Larry Winget are right.  The real problem is the notion that it can’t be we that are responsible.  That’s wrong.  We are responsible for processing the advice we receive, getting enough of it, and, above all, thinking for ourselves.  Don’t just write down the stocks that Jim Cramer yells out in between sound effects.  Don’t just dollar-cost-average because it’s what your financial planner recommends.  And don’t even do what they do: If Suze Orman has municipal bonds, I hope they’re not CA state munis.  Think about your own finances, because no one else really will.  They’re thinking about their own finances.

We do what we can, and we live with what happens.  We don’t sue, we don’t blame, we don’t open our hands for a bailout.  Personal finance is here to stay, but we need to take it personally.

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It seems like every week I get an e-mail from Classmates.com. I signed up for it years ago but never really was curious enough about finding my own classmates to pay. This week, somebody stopped by and signed my guestbook.

Who could it be, I wonder?  I click on the link to get this:

Uhh, no, sorry.  There’s a fair chance that this person’s already friended me on Facebook!  Why would I want to pay just to get friended again?

This is kind of like searching for the answer to a programming question and forgetting that experts-exchange.com doesn’t actually give you the answer for free … but you can get the answer if you join! Other sites like Code Project and Stack Overflow give you the answers for free.  And you can even ask for free!

Free stuff may be going away but, despite Rupert Murdoch disagreeing with me, free is not a flawed business model.  If done right, free can be successful.  Free rocks.  Free is fantastic.  Even if I have to look at ads, I’ll take that over paying almost all the time.

Now, if Classmates.com really offered something that different, maybe.  But they don’t.  It’s just Facebook Lite.

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Caught this yesterday via Slashdot:

News Corp will charge for newspaper websites, says Rupert Murdoch

In August I wrote about this, and it looks like it’s happening. So, is Rupert Murdoch going to roll out subscription fees for his companies’ news sites just because he’s a greedy capitalist? Well, yeah, sure, but it’s also because earnings have dropped like a stone: quarterly profits went from $216 million to a miniscule $7 million, year on year. And if the Wall Street Journal can thrive under a subscription model, why not his?

Advertising budgets are being slashed all over the place, which includes, increasingly, online advertising budgets. The model of “give away valuable stuff to get eyeballs, clicks, and conversions on the adjacent ads” that works so well when money is flowing becomes a liability when the money isn’t flowing. It’s more than a little challenge to convince people to pay for stuff that they’ve come to expect for free. (Pay per tweet, anyone? Yah right.)

But it’s a real issue: How do online services make money if the advertising goes away? If they know, then they survive. If not, they don’t. They can’t.

Hot hot hot money questions at Cash Commons