San Diego, CA. - It used to be, not that
long ago, the majority Americans were hooked on spending and
many were borrowing and spending. When Americans used to hear
their money talk, it screamed spend, spend, spend.
What a turn around after six months of
economic downturn and uncertainty. Now, when people hear their
money talk the urgent new message they are hearing is save,
American consumers have dramatically cut
their spending as they worry about losing their jobs and earning
less in a deteriorating economy. The personal saving rate in the
last three months of 2008 rose to its highest level in six
years, according to Vengroff, Williams & Associates Inc, an
Orange County, CA receivables consulting firm. The personal
saving rate of 2.9% in the fourth quarter of 2008 was the
highest since early 2002 when the country was recovering from
the dot-com recession and the shock of the attacks on Sept. 11,
2001. The savings rate rose to 3.6% in December, from 2.8% in
November. VWA expects this significant increase to continue
longer term, at least thru the tax season, as consumers
typically use refunds to pay down debt.
There are still many signs observed by
financial educators and credit counselors that consumers are
over-spending because many are still paying too much for things.
Over-extending was the number one form of consumer
BillShrink.com has developed the following
list of 15 things consumers commonly overpay for in today's
economy. This list includes costs that can easily be avoided, or
reduced if customers are willing to shop around or plan ahead.
- Pseudo Health
Products - Like the "protein bars" that are presented as
"low fat" or "all natural" even though can end up just as
unhealthy as candy bars (the sugar!), while costing up to
five times as much.
- Brand New
Technology - It is well documented that technology
prices come down considerably once new products have been on
the market for several months to a year. Additionally,
waiting allows time for other companies to release
competitive technology, presumably leading to better overall
products becoming available in the marketplace.
- Bottled Water
- This is probably the most overpriced of all regularly
consumed products. Over 2/3 of the world is covered in
water, and filters to covert 'tap water' into filtered water
are readily available for under twenty dollars. However,
millions of people choose to spend $1-$2 on this convenience
item each day.
Coffee Cups - Individual cups of coffee purchased
anywhere, whether from restaurants, gas stations, or coffee
shops, are invariably priced high. Especially when compared
to what one could buy and prepare coffee for in bulk at
- Prepackaged Food
- Buying prepackaged food items such as sandwiches, sliced
apples, or desert cups is one way of overspending on
products that are relatively easy to make, and less
expensive then when you buy the ingredients which can also
give you more servings.
accessories for computers - Computer manufacturers have
built a cult-following over the past decade, and they are
able to demand premium prices for many of their aftermarket
accessories. There are, however, a number of manufacturers
that make products that are compatible with mp3 players and
other products, available for a fraction of the cost.
- Sending a Fax
from a Business Center - There are a number of free
web-based fax services, for which you only need an email
address and a scanner. Sending faxes from placessuch as
Kinkos can cost $1 per page for local, and $2 per page for
- Car Maintenance
from the Dealership - Unless a car is under warranty,
going to a dealership for a repair is one sure way to
overspend. Car dealerships often promise that certain work
can only be done by authorized dealerships, and are
less-inclined to negotiate prices, something that should be
done with any type of auto maintenance.
- Music -
There is no longer the need to purchase an entire album, now
music fans can compartmentalize music purchases to the
individual song level with sites like
Warrantees on Electronics - The typical lifespan of
electronics products are 3-5 years. So if you think you will
upgrade the item within 5 years, or before you will repair
it, is the cost (can be up to 50% of the purchase price)
Fees/Overdraft Fees - Paying late fees on credit cards
and bills, and overdraft fees on bank accounts can be a
disheartening use of one's hard-earned money. Especially
when a minimum payment on a credit card of $15 is missed,
resulting in a late fee that can be as high as $39 (and
perhaps result in an APR% increase). Overdraft fees add up,
especially when they are made in quick succession, resulting
in fees for each transaction made while an account is
- Non Bank ATM
Fees - ATM Fees can add up. They can also be slightly
misleading; it's not unusual for ATM convenience fees to
cost $2.00, and for the card-issuing bank to charge up to an
additional $2.50 as a non-bank ATM Fee. As a result, it may
cost up $4.50 to withdraw $20.00.
- Gambling -
Most people gamble with a vague sense that they may one day
strike it rich. Others, play for entertainment. It cannot be
denied that - especially at a casino - the odds are stacked
against most gamblers. In any case, gambling is often the
source of grief and frustration - presumably, at the thought
that any money lost could have better been used by
depositing it into one's money market account.
- DVDs - Now
there are many alternatives for individuals to watch movies
without having to purchase them - Netflix offers unlimited
monthly rentals, and websites such as
Hulu.com, enable users to watch thousands of its titles
- Flowers from a
Florist - Flowers are often overpriced, especially at
florists, and always around the holidays, so your best bet
is go to your grocery store, they are often a fraction of
Remember please, everyday spending
decisions, especially credit based ones, will do far more harm
to your financial future than any investment decision you will
likely 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.
Improving spending techniques enables most
consumers to get a better value for their dollar. One of the
easiest steps is to comparison shop before spending. The
question when people are out spending should ask themselves "Is
the price right?"
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. The ICFE, along with lot of other people,
including financial planning professionals prefer to call it a
spending-plan. Get yours developed and implemented today or help
someone else to the same.
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.