ICFE eNEWS #07-20 - November 8th 2007
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San Diego, CA. - Regularly making prudent spending decisions which result in consumers obtaining a greater value for their money is one of the main educational objectives of the ICFE. One of the most compelling reasons why is that everyday spending decisions, especially the credit based ones, will do far more harm to one's financial future than any investment decision a consumer is likely to ever make.

The biggest culprit for many consumers is impulse spending and the convenience effect. Sighting convenience as a main reason, people say it prompts more spending without much forethought and research on whether or not the purchase is a good value, whether or not the purchase is even necessary and whether or not the purchase takes money away from debt payments which may become due and/or eliminates any money being put aside to accumulate.

A question to ask yourself is: "Are your spending habits and Practices doing something to you or for you?" It is a question that makes many people cringe. Sometimes questions about how and where money is spent makes some people more uncomfortable than asking them about the role religion may play in their lives.

If your spending Practices are doing something to you, it may reflect a number of symptoms including there being too much month left at the end of your money. Other common symptoms of over-spending that far too many Americans are experiencing is living their lives from paycheck-to-paycheck. For others, all the bills may be paid but there is nothing left over for savings and retirement planning or planned discretionary spending, like a vacation, for instance.

If your spending Practices are doing something for you, chances are your savings and investments are still growing, your retirement is being fully funded, equity might growing in a home, and there is no credit card debt.

Hurtful spending Practices (the ones that do things to you) - especially the credit-based ones - are often reflected negatively on credit reports. This is common among the John and Sue Workhards of America.

A typical American family may be taking in some $2,500 a-month, for example, and they are spending $3,000 a-month. The difference is being made up using credit cards, other loan proceeds and in the worse-case scenarios, where all available credit is exhausted, current spending often borrows from the next month's scheduled payments, which is more commonly known as "the money merry-go-round."

Sharpening spending skills and transforming bad money handling habits and Practices is relatively easy especially compared to dieting and quitting some other things like nail biting or smoking. It begins with some simple planning. Some folks refer to it as budgeting, a somewhat negative term that implies one has to do without. A lot of people and financial planning professionals prefer to call it a spending-plan.

A simple monthly spending plan includes a listing of income received and also a list of anticipated expenditures, some reoccurring every week or month and others maybe every three, six or 12 months. Setting money aside each income period to meet a portion of the annual and semi-annual expenses is good planning and allows one to avoid getting into the paycheck to paycheck routine. Unplanned spending results in wasted money. Many times consumers find themselves owning things others wanted them to have instead of buying things they needed or really wanted to buy.

Household and grocery items, for instance, account for about 30 cents of every take-home dollar according to government statistics. Convenience spending at the grocery store is rampant and the grocers do everything they can to promote it too. Other purchases, such as home entertainment, electronics, computers and the like are also taking up a large portion of discretionary spending. Research and planning will enable consumers to get a good value and spend less overall.

One way to extend the value of the dollars spent is to take advantage of those ubiquitous coupons. The Promotion Marketing Association (PMA) Coupon Council unveiled data recently that shows 71 percent of people between ages of 18-24 use coupons when purchasing a product or service. Coupon clipping is a time-honored ritual that saves Americans billions of dollars annually on grocery, healthcare and household items. The PMA says "coupon clippers" represent 86 percent of the overall U.S. population, up ten percent from 2006.

Some remarkable data on coupon usage of 18-24 year olds from BIGresearch's July 2007 Simultaneous Media Survey (SIMM10) include:

Coupons are more influential in purchase decisions to 18-24 year olds in four out of the eight retail categories measured than the general population, including:
Electronics (37% vs. 23%)
Apparel/Clothing (31% vs. 24%)
Car/Truck (11% vs. 8%)
Telecom Services (9% vs. 7%)
54% of 18-24 year olds were influenced to purchase a grocery product (food/cleaning/ beauty) because of a coupon.
46% of 18-24 year olds were influenced to eat a particular restaurant because of a coupon.
37% of 18-24 year olds were influenced to purchase a particular electronics product as a result of a coupon.
Basic Coupon Facts
86% of the United States population uses coupons.
Shoppers saved approximately $2.6 billion last year by using manufacturer's coupons.
The typical manufacturer's coupon was worth $1.15 savings in 2006.
Coupon users report an average of 11.5% savings on their grocery bill with coupons.
Manufacturers offered approximately $330 billion in coupon savings in 2006.
Some tips that the PMA Coupon Council suggests to help young adults and all ages maximize coupon usage include registering on rewards and coupon program web sites to access exclusive "members-only" coupons; look for coupons in the Sunday newspaper, coupon books, in magazines, in your mailbox, at the grocery store shelf, on the Internet and with your cash register receipts; and organize your coupons in the order that you shop the store for quicker savings trips. For more coupon clipping tips visit: CouponMonth.com.
By the way, this writer enjoyed rebates and coupon savings of $749.10 from Jan-Oct 2007 and $1,127.41 for all of 2006.


About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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