This Week In Your Wallet – January 25, 2011
Hi and Brrrr…
As I am pulling this week’s newsletter together, it is somewhere around 4 degrees outside. I don’t remember feeling cold like this since I was a kid growing up in the Midwest. For those of you who have it all time: I feel for you (literally!) Here’s what’s happening in the world of your wallet.
The Cost Of Free Lunch. Have you noticed that your bank is putting out more in the way of snacks and munchies? It’s happening in my town. And it’s not the only one. Nibble at your own peril. No, I’m not accusing anyone of spiking the soda, but it’s important to know why stores – and banks fall into this category as they do have things to sell – cater to you in this way. Research has shown you buy more. Walk into a warehouse club, for instance, where you can taste everything from cheesecake to little hot dogs (yum) to quesadillas and creamed spinach. Tasting whets your appetite not just to purchase what you’ve sampled (although of course it does for that, too) but to purchase more of everything. This may be why my usually quite-rational husband (who doesn’t camp) once came out of a warehouse club with a tent. He overdid it on the guac and chips. Be similarly careful at your bank. Allowing them to ply you with Oreos may make you willing to accept a CD with a lower-than-average rate of interest or a credit card with a higher-than-average annual fee.
Love From The IRS. February 14 is the day the IRS will be ready to accept returns from taxpayers who itemize (you’ll recall from last newsletter they needed a little more time this year to get their forms prepared). That’ll put itemizers right in the thick of tax season. More people file in February than any other month year after year. If you’re chomping at the bit – whether or not you itemize – it’s likely because you’re due a refund. People who are on the receiving end file earlier simply because they want their money back. And the amount of money they’re getting keeps rising. Refunds averaged about $3,000 last year – up 5% from the year before. If you get a refund, what should you do with it? Stash it for emergencies if you don’t already have a cushion. Pay down high rate credit card debt if you’re dragging that ball and chain around. And if you’ve tackled both of those obstacles, then think about socking the money away for retirement or some other long-term goal. Then talk to your employer about changing your withholding so that you’re no longer giving Uncle Sam a bi-weekly interest free loan.
Groupons Galore? Among my New Years Resolutions was a promise to stop surfing (like Pavlov’s wired dog) to RueLaLa every day at 11 EST and Gilt.com every day at noon. These online sample sale sites can be downright addictive. So can the couponing ones like Groupon and LivingSocial. They all tap into our worst impulse buying instincts: We have to get whatever they’re peddling today – in fact right now – or risk losing it forever. On the sample sale sites, at least, you can often return, if not for credit to your charge card then for credit to the site. But once you buy a Groupon, it’s yours to keep… or you can sell it on Lifesta. The site, which launched in July, has also proven useful to coupon buyers who find they can’t use their vouchers before their expiration dates. Lifesta charges 99 cents for each listing plus 8 percent of whatever you get from the sale. Most coupons are selling for near what you paid for them to begin with.
Have a Great Week!
Jean
JeanChatzky.com
