Price Wars: Good or Bad?

By Heather, CPA (Balance with Purpose)

What do all of the price wars on books and slashed prices on toys at our favorite retail superstores mean? Are these drops in prices good for the economy? Or are they simply good for consumers?

Well, I could rant about how I think Amazon is shooting themselves in the foot by trying to compete with Wal Mart on book sales or about how bad this price war between Amazon, Wal Mart and Target is for the book publishing industry, but that’s not the point I want to make here. If you want to read a detailed analysis of that subject, head over to Michael Hyatt’s blog for his complete opinion. It’s dark and discouraging, by no fault of his. He only tells the truth.

Then there’s the news that Target recently slashed the prices of many popular best-selling toys by 50%. This came after Wal-Mart decided to offer 100 of its toys for $10.

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The Recession Is Over? And Financial Principles To Live By

By Heather, CPA (Balance With Purpose)

We have all felt the down economy in one way or another, whether it’s through loss of a job, a pay freeze, drop in value of stock portfolios, or increased expenses.

According to a NY Times article dated October 16, 2009 titled, "By Some Reliable Measures, Recession is Over," the recession is in the past. Don’t you want to leap for joy at hearing that headline? No? Me neither. Why? Because I’m skeptical.

I actually heard the news of the recession being over while I rushed around the house one morning last week getting my family ready for the day and trying to get myself out the door for work. That very same day I learned that a dear friend of mine’s husband lost his job.

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More Debit, Less Credit (Finally!)

By MAD21

The Washington Post wrote an interesting article this week called, "For Gun-Shy Consumers, Debit is Replacing Credit." It's about how more and more people are using their debit cards instead of credit cards.

"The recession has cooled the American ardor for living on credit. After years of saying "Charge it," consumers are more often paying with their debit cards instead.

Worry about jobs, fear of fluctuating interest rates on credit cards and wariness about spending too much are contributing to the change."

Do you think people are finally learning the importance of living within their means? I sure hope so. There will be some industries that will hurt because of this, but honestly, we have too much 'stuff' out there to buy anyway and waaaay to many credit companies who are sucking our money away.

This is the first article I seen written about how "the system" is finally feeling the effects of people who are beginning to spend more wisely because of the state of the economy in the last few years. I hope it's a new trend.

Will Having More Money Make You Happy?

By MAD21

I stumbled on an old article at MintLife called, "Why Rich People Aren't Really Happier." In this article, a few experts talked about why those who are 'rich' are really no happier than those living paycheck-to-paycheck. In fact, they are almost more stressed because of the desire to spend. The experts state:

"The ability to imagine — to try to predict our future state of mind — is what sets us apart from less-evolved species. It’s also the very thing that stunts our shot at true happiness.

We assume that a sportier car, a bigger house, a better-paying job, or that dress will bring us joy because, well, they did in the past, right?

Not really, says Daniel Gilbert, a Harvard psychology professor and the author of Stumbling on Happiness....

What’s so wrong with relishing and embellishing the good? It’s costly. Faulty emotional recall makes us do dumb things with our money, like buying cool new stuff that never quite satisfies.

In so many areas, we know when enough is enough. When we’re healthy, we don’t strive for extreme health. After a good meal, we’re sated — we don’t order another filet mignon to augment our satisfaction.

Yet our “pause” button shorts out when it comes to money. The brief pick-me-up that accompanies a raise or windfall (think of it like a caffeine buzz) drives us to want more. We get a raise, spend it, adapt to our improved circumstances, and seek more money, working up a sweat on what University of Southern California economist Richard Easterlin calls the hedonic treadmill."

We all have to realize that happiness truly lives in being thankful for what we already have, with where we are. That doesn't mean we don't strive to be in a better place, but we need to watch our motives. Wanting the bigger house, the more expensive car, or the latest toys are all things that helped cause our economic state today. People living above their means. Looking for happiness in some thing, instead just being happy with what they already have.

So the next time you find yourself wanting to by the next newest thing, stop for a moment and ask yourself, "Can I afford it?" "Do I really need it?" "Why do I want to buy it?" and "Will it still be important to have it in a few months?"

Why Should Christians Care About Economics, Part 3

By Jason, M.Ed., M.A.R., Headmaster

Government Spending = Government Control

At the end of August, the White House Office of Management and Budget (OMB) released revised estimates of government spending for the current fiscal year. The numbers show that the federal government will spend $30,958 per household. Where will they get this kind of money? $17,576 per household will come in taxes (paid mostly by the top 10% of US households) $13,392 per household will be borrowed, adding over $1.6 trillion to our national debt.

Looking at these same numbers another way, the federal government will increase spending by 22 percent this year. Isn’t everyone else cutting spending because we’re in a recession? Even more significantly, federal government spending will reach a peacetime-record 26 percent of the gross domestic product (GDP). Our federal government is spending more than ¼ of all of the wealth in America on its programs. This spending is not just temporary surge due to the recession, a “stimulus” for a troubled economy. President Obama has plans to keep annual spending $5,000 and $8,000 per household higher than it had been under President George W. Bush.

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