Sunday, November 23, 2008

Ha! You Got (Tax) Shifted!

It’s what happens when state governments get real smart at taking your money away. Let’s say that you really don’t like taxes (that would probably be all of you). Well, because taxes are really unpopular politically, some state governments have engaged in long-practiced method of collecting needed revenue when times are tough (and sometimes when times aren’t so bad). Let’s call it… You Got (Tax) Shifted!

Here’s how it works.

You want low income taxes despite the fact that the cost of running the state/federal government gets more expensive? OK, lawmakers say. We won’t raise your income taxes. So they appeal to the federal government for “relief” (that means cash). However, people across the country don’t want that to happen either. Thus, local governments will increase their sales taxes. But then if that fails, what happens next? Something has to go to be cut, (or go up to bring in more revenue) So what will go up are...other things you don’t really get as upset about. Like:

- Bridge and Road Tolls
- Mass Transit Fares
- License Vehicle Registration/Tag Fees
- Monthly/Yearly Parking fees
- Parking Ticket fees/Speeding Ticket fees


And/or they start cutting back on services. Libraries and other public-service entities close earlier and shut off lights. Small businesses raise fees and cut back on hours as well. People work less. Here in NYC they are talking about eliminating entire lines of subway service and raising fares...again. These consumption fees are not “taxes” per se, but they still work in the same way by bringing in revenue to keep businesses are state-run services afloat. Of course, you can avoid many of these by not consuming these services, but it’s unlikely that you will stop driving, stop parking, flying, riding, etc. Otherwise, our economy, which depends on you spending money, will continue to tank.

Monday, November 17, 2008

Americans Are Going Generic

Welcome back readers. I'm slowly getting the site back, but let's talk personal finance. It took a recession, but Americans appear to becoming more generic consumers:




Many Americans are changing their everyday purchases and abandoning brand loyalty, prompted by the persistent financial pressure of rising food, gasoline and electricity prices.




It didn't seem like it was too far off. Most consumers don't buy brand-name basics like butter, milk, and eggs. But consumers appear to be branching out into private-label brands over their national counterparts, and not just on basic items like milk, eggs, and butter:





From coloring hair at home instead of at the salon to trying cheaper laundry detergents, new evidence indicates that Americans are modifying even minor household habits to save money.





I get to see the result of these consumer decisions while working for a consumer-products company. But even outside of the private-label and store-brand products, consumers are eating out less, buying fewer prepared foods, and stretching our cleaning products.



These small-ticket, everyday purchases can secretly eat into your budget before you realize it. If the price of your cleaner increases 30 cents, milk goes up 50 cents, cereal goes up 50 cents, butter goes up 40 cents, and so on, you'll easily find yourself spending $20-$30 more per month than you realize. I remember when I first moved to New York I could buy 2 movie tickets for $17. Now they are $22. All these little costs add up, leaving you wondering where the money went.



The lingering question many of you may ask is whether the private-label substitutes are of the same quality despite their significantly lower costs. In many cases, the answer is yes! Note how private-label manufacturers are printing "Compare to XXXX Brand" on the package while placing their products right next to the national leader. The ingredients are very often the same—except they don't have to pass advertising costs on to you.



But as I always encourage you to do with these product types, try them out on a case-by-case basis. Some will be better than others—you may even find yourself converted (as I have with many products). You'll save yourself a bundle—that you can use to close holes in your budget and invest in this fire sale going on in the stock market right now.

Friday, November 07, 2008

Site Repair

So I take a short hiatus and come to find the formatting of this site is...well..very weird. I will be taking a short break to fix whatever is going on here. Excuse my progress.