December 2010 Archives

Will 2011 be the year of living frugally?

Or will the buy-it-now and get-the-latest-gadget trend continue? There is much disagreement about whether Americans have really changed their thinking about frugality and spending.

Of course, some people are being forced to change their ways -- because they lost their jobs or they've gotten in way over their heads in debt. Some economic watchers say once the economy roars back and unemployment declines, many of those who turned frugal will revert to their old spending habits. Others argue that the 2008 Wall Street crisis gave us such a wake-up call and created so much mistrust of the global financial system that we won't soon forget it.

There's evidence on both sides of the argument.

The holiday season is all about giving. We shop like crazy so we can give presents to our friends, family, and loved ones. We bake and serve food to others, sing songs for others, and travel to be with loved ones. But many of us also look at this as a time to give back and donate to charities and the needy.

I have walked past several Salvation Army bell-ringers dressed in red this holiday season, and sadly, I rarely have cash to give them. The good news is that we often don't need cold, hard cash in order to give back anymore. Most charities now accept donations via credit card on their websites or through PayPal. You can also find credit cards that donate a percent of spending to charities ranging from animal rescue to environmental conservation to breast cancer research. Some credit cards allow you to use your rewards for donations to charities or to offset your carbon footprint.

I hope you have happy holidays, regardless of whatever you celebrate. But before you go on break, be sure to check out my roundup of 10 of my favorite personal finance blog posts from the past week, including a few about donating and giving back.

While Christmas and Hannukah are obviously religious holidays, many nonreligious people such as myself still celebrate the annual gift-giving ritual. Hannukah was very early this month and has already passed, but if you are celebrating Christmas, I hope your shopping is well under way--Christmas Eve is one week from today! Luckily, you have some great last-minute options, like gift cards that can be printed out or delivered via email, or homemade crafts.

Each year, many of us go into credit card debt in order to buy hundreds of dollars of gifts (if not more) for our friends, family and loved ones each holiday season. If we would only start saving for the next Hannukah or Christmas as soon as this one is over, we could avoid this problem, but it's so hard to rationalize saving for them again when the winter season isn't even over yet. This New Year's, I think I'm going to resolve to start shoveling away a tiny amount of cash each month for the next holidays so that I'll be totally prepared when they arrive. Would you do the same?

Please read on for my roundup of some of the best personal finance blog posts from the past week, including several with great ideas for holiday gifts.

Are you saving enough for retirement? According to CNN Money, most Americans in their 50s will retire with only $120 a month in savings. Based on Wells Fargo's annual retirement survey of 2,000 middle-class Americans ranging from 20 to 60 years old, "Americans aren't saving enough, they are underestimating the amount of money they will need in retirement, and they are more likely to end up working through retirement."

I worry that Americans just don't think ahead. Just today I was talking to someone who was in their 30s but said they weren't interested in saving for retirement now because they are having fun and can always do it later. I tried to explain compounding interest and why it is so vital to start young, but I could tell I wasn't going to change any minds. Debt can be the same way. It is easy, yet detrimental, to think short-term and simple rather than long-term for a sustainable future. Why load up with credit card debt for unnecessary expenses when you could instead be contributing for your retirement?

Read on for my roundup of some of the best personal finance blog posts from the past week, several of which can help you start organizing and optimizing your fiances (and some that will help you avoid credit card debt during the holidays).

The huge news of the past week has been the release of classified documents through the site Wikileaks. The thousands of private diplomatic cables that were released reveal foreign policy strategies, military secrets, embarrassingly candid opinions of global leaders and more. Julian Assange, Wikileaks founder, is being pursued by numerous legal entities.

Some the leaks that made the biggest splash were requests from the State Department that diplomats should collect information from their foreign counterparts. They "show Secretary of State Hillary Clinton and her predecessor Condoleezza Rice asking diplomats to collect data ranging from Internet passwords to DNA and iris scans," according to USA Today. Other pieces of data that was encouraged to be collected was credit card numbers, frequent flier numbers, work schedules and fingerprints. Critics have come out and said that this borders on asking diplomats to be spies.

What do you think? Is it reasonable for diplomats to collect others' credit card numbers? Please read on for my roundup of my favorite personal finance blog posts from the past week, including several great ones about affordable holiday gift shopping.