Category: Debt Management

Even for families who had committed to consolidating debt this holiday season, the end of the shopping season may also bring some type of "sticker shock" during the first run-through of finances for the new year.

Because of that Kristy Archuleta of Kansas State University’s Institute of Personal Financial Planning Clinic has compiled some tips that consumers can begin doing immediately to prepare for a financially smoother holiday season in 2010.

While many families do not take enough time to put money away in preparation for the holidays, Archuleta suggested that a portion of every paycheck be committed into savings in order to have a financial cushion that prevents even a mildly extravagant expense from plunging them into debt.

Additionally, as many consumers learned this holiday season, Archuleta urged families to begin their shopping for the holidays as early as possible in order to shop around for the best prices before making a purchase.

"Another way to save is start your holiday shopping early, watching for sales and doing comparison shopping to get the best quality and best price for your money. Be sure to check sales prices at the store to make sure you are actually buying the item on sale," she said.

Numerous surveys taken this holiday season found that consumers had taken to online shopping in order to property compare prices against one another before making a purchase.

With cash at a premium for many families looking to consolidate debt, Tennessee Attorney General Bob Cooper is making a point to warn consumers to be careful and not fall victim to expiring gift cards and rebates that could ruin a holiday gift.

Cooper warned that, in an attempt to lure customers to their shops, many retailers may offer discounted prices on numerous items, but require consumers to send mail-in rebates to third parties in order to get their refund.

However, he added that some refunds – or gift cards that may either be awarded by some retailers as a discount or purchased outright as a holiday gift – may expire unbeknownst to the consumer and render it useless.

"That’s money and time wasted if you don’t pay attention to the details or don’t follow through to see why the company never mailed the rebate," Attorney General Cooper said. "A little research can go a long way toward collecting what you’re due."

While Tennessee has a gift certificate law which prohibits gift certificates from having n expiration date of less than two years, Cooper added that there were still exceptions to the rule that must be looked for and considered by consumers before making any decisions on a gift card or rebate offer.

According to a recent survey conducted by the Retail Council of New York, gift cards/certificates were singled out as one of the more popular gifts for adults this holiday season, WIBV.com recently reported.

A newly released survey from Consumer Reports has found that Americans are holding out for good deals and intend to spend less this holiday season than in years’ past.

According to a spending survey released by the organization last week, 40 percent of Americans stated that they had not yet started their holiday shopping as of December 6.

The survey also found that – for the third straight year – the average amount of money consumers planned to spend during the season decreased. After dropping $23 to $740 in 2008, the average amount spent declined another $41 to $699.

Despite consumers’ increased attempts at debt management, survey respondents said they planned to purchase an average of 15 gifts, the same as in 2008.

"The findings clearly show that Americans are taking a pragmatic approach to the holidays. And that’s a good thing," said Tod Marks, senior editor for Consumer Reports. "Consumers are spending a bit less, focusing on more practical gifts, and vowing to take on less debt and pay it off sooner."

For those who had begun shopping, 41 percent said they had found the best holiday deals at brick-and-mortar retailers such as Walmart and Target. Thirty-nine percent said they had found the best deals via online retailers, while 16 percent favored discount stores such as TJ Maxx and Marshalls.

A new study is suggesting that the Great Recession may be acting as a marriage counselor for couples whose relationship are on the rocks and, in some cases, even save the relationship – albeit for financial reasons.

According to a recent study released by W. Bradford Wilcox, the director ofthe National Marriage Project at the University of Virginia, the divorce rate in 2008 fell to 16.9 per 1,000 married women in 2008 from 17.5 per 1,000 married women in 2007.

Wilcox predicted many couples had probably committed to stay together as a means of debt consolidation and to avoid financial troubles that would occur if they separated.

"This divorce decline suggests that most married couples have not responded to the economic crisis of the moment by heading for divorce court," the report read, "Instead, judging by divorce trends, many couples appear to be developing a new appreciation for the economic and social support that marriage can provide in tough times."

Couples who do decide to separate may also have different priorities in divorce court than the may have had previously. Based on a recent study by University of Arizona professor Brent White, who recommended homeowners walk away from houses with mortgages that had more owed to them than they were worth, couples may be less likely to debate the ownership of a shared home that is losing value and decide to simply get rid of it instead.

As people of all ages deal with consumer credit counseling as they wait for the economy to improve, a new study has found that the recovery may be led by, of all people, the Generation X and Y-ers.

According to a new report published by Performonics, consumers between the ages of 18 and 44 overcame one of the worst economic years in decades and spent money in excess more than any other age group.

The results found that 76 percent of Americans in that age group had "splurged" on shopping sprees throughout 2009, and outspend those older than them in 11 separate categories.

"We hoped we would see this positive shift in consumer confidence months ago," said Michael Kahn, senior vice president of marketing for Performics. "The study’s November findings indicate a substantial uptick in positive attitudes, shopping behavior and buying intentions, with younger generations, Gen Y and Gen X, fueling the optimism behind this uptick."

The study’s results also found reason to believe that the Gen X and Y-ers would continue their "splurging" ways into 2010 and continue to lead a gradual rebound in the economy. Eighteen percent of those ages 18-44 expected to spend more overall in the next 60 days than they had one year earlier. Compared to only 13 percent of those surveyed who were over the age of 45.

In an attempt to get shoppers to purchase gifts online that will be delivered by the Christmas holiday, many online retailers are cutting shipping costs today and guaranteeing on-time delivery for shoppers who looking for deals and consolidating debt this season.

According to FreeShippingDay.com, which compiles a list of retailers who are shedding their shipping costs for one day on December 17 this year, the purpose of the online shopping event is to reward consumers who ship online with "free shipping for doing their last minute Christmas shopping at home."

The event, which CBS News said first occurred last year, is also a chance for online retailers to increase their sales figures further into the shopping season. Traditionally, many online retailers experience a dive in sales as December progressed because of consumer fears that gifts won’t arrive in time for the holidays.

There are 741 online retailers offering no shipping charges on any of their products for this year’s iteration of Free Shipping Day, ranging from mainstream websites such as BrooksBrothers.com to independent shops such as MagellansToyShop.com

This year’s Free Shipping Day comes in the middle of a shopping season that has seen an increase in online sales. According to a recent comScore survey, retail e-commerce spending has hit $20.7 billion as of December 13 this holiday season, a 4 percent increase over 2008’s online spending figures.

In another sign the unemployment situation is affecting many Americans in the midst of consumer credit counseling as they look for work, a new study has found that employment at airline carriers is at its lowest level in nearly20 years.

According to the U.S. Bureau of Transportation Statistics, American scheduled passenger airlines had 3.7 percent fewer workers in October 2009 than they had at the same time one year earlier. The decline marked the 16th consecutive time that year-over-year levels of full-time employees for the airlines had declined.

Of the seven major airlines, all decreased their employment figures over that timespan except for Delta Airlines, which saw its employment rise by 7.3 percent. The major airlines also accounted for 68.2 percent of the workers hired in the industry, with the remaining workers being employed at either low-cost or regional carriers.

Additionally, the 379,800 workers that the BTS reported were employed in the industry in October was the lowest total amount since 1993.

The employment figures for the airline industry were released the same day that the International Air Transport Association issued grim news for the industry’s prospects in 2010. Revising previous data, the association broadened the expected global net losses in the airline industry from $3.8 to $5.6 billion. It maintained that net losses would total $11 billion.

While a majority of Americans chose to remain at home during the Thanksgiving holiday to save money, those who did venture out actually spent more than they did in 2008, according to a new survey.

According to Ipsos Marketing’s travel and tourism division, despite the reputation of Thanksgiving being the biggest travel day of the year, 79 percent of Americans said they had no plans to travel over the holiday weekend, one percent higher than data taken during the 2008 holiday.

Perhaps fittingly, only 19 percent of Americans said they planned on travelling out of town for the holiday, down slightly from 2008’s figures.

However, despite the supposed attempts by many to consolidate debt as the holiday season gets underway, the survey also found that those who did decide to travel were more willing to spend money than in previous years. Thirty-five percent of travelers said they were going to spend more money in 2009 than during the previous year. By comparison, only 13 percent said they planned on spending less while out on the road.

"In the current economic times Americans are finding ways to continue to connect with loved ones and in some cases the pull-out couch or long car ride is the necessary sacrifice," said Dave Pierzchala, the Vice President of Ipsos’ travel team.

In surveying those who traveled for the holiday, 17 percent said they planned on driving instead of paying for a flight, while 22 percent planned on staying with family or friends instead of a hotel.

A head of the Federal Reserve has come out with a somewhat lukewarm message regarding the U.S. economy, stating that while there has been improvement that it was still far from being fully recovered.

While speaking at a World Leaders Forum last Monday, president and CEO of the Fed’s New York branch William C. Dudley said that while the economy was working towards a recovery and the worst conditions were seemingly over, it was still weak and would take time to fully bounce back.

"The recession now appears to be over, but the economy is still weak and the unemployment rate is much too high," Dudley said. He added that because of that, the Fed would likely keep interest rates "exceptionally low for an extended period."

Dudley also admitted that, in retrospect, the Fed could have done more to help and limit the financial crisis than it actually did, and credited the Obama Administration’s federal stimulus package with helping to "ward off a total collapse of our financial system."

However, he added that the Fed would learn from its past mistakes. Noting that some of the bailouts provided to banks had angered many consumers as they struggled through debt counseling, he said that the Fed and other regulators had committed to move effectively in order to prevent the same oversights from leading to another crisis.

Economic experts are predicting that, even as the economy recovers as the year comes to an end, significant improvements in the unemployment rate will likely not come until at least the spring

Speaking to CNN’s State of the Union, National Economic Council director Lawrence Summers said those hoping for a significant decline in the unemployment rate to help their debt management practices would not see anything substantial until the second quarter of 2009.

"Most professional forecasters expect job growth by spring and I think that’s a reasonable judgment in an uncertain world," he said.

The slow recovery, he added, would occur despite the goal of lowering the unemployment rate being one of the Administration’s top priorities through the stimulus package.

"The number of projects under the program… is going to be about twice as great over the next six months as it was over the last six months," he added.

After hitting 10.2 percent – its highest point since March 1983 – in October, the unemployment rate declined slightly in November, dropping 0.02 percentage points to hit 10 percent, the U.S. Department of Labor reported.

Speaking to ABC’s This Week with George Stephanopoulos, Summers offered somewhat more positive news, stating that "everyone agrees the recession is over" after seeing Novembers figures. However, White House Economic Advisor Christina Romer disagreed, telling NBC’s Meet the Press she would not declare the recession over until the unemployment rate was closer to 5 percent.