While driving home the other day, I heard the Bon Jovi song “Wanted Dead or Alive” and somehow became inspired to write a version of the song that would be good for The Personal Finance Program.

On that note (no pun intended) I came up with the following lyrics to “Wanted Debt or Alive,” which is about how many of us over spend using money that isn’t even ours to begin with.

Enjoy!

It’s all the same
Only the stores will change
Everyday
It seems I’m spendin’ away

Another store
Where the sales are so bold
I shop all night
Because I’m easily sold

I’m a spender
On a Visa I ride
I’m wanted
Debt or alive
Wanted
Debt or alive

Sometimes I’m cheap
Sometimes it’s not for days
To the cashiers I meet
I’m glad to hand my pay

Sometimes you tell the day
By the bill that’s on the brink
And times when you’re alone
You buy everything but the kitchen sink

I’m a spender
On a Visa I ride
I’m wanted
Debt or alive
Wanted
Debt or alive

I’m a spender
On a Visa I ride
I’m wanted
Debt or alive

When I walk these streets
A loaded AMEX string on my back
I buy for keeps
‘Cause I might have to pay it back

I’ve spent everywhere
Still I’m spendin’ it all
I’ve seen a million offers
And I’ve bought them all

‘Cause I’m a spender
On a Visa I ride
I’m wanted
Debt or alive

I’m a spender
FICO’s not on my side
And I’m wanted
Debt or alive
And I’m wrong
Debt or alive
I still spend
Debt or alive

Debt or alive

What did you think?  Any good?  Worth putting together a YouTube video over?  Leave your comments below.

Per FTC regulations, please note that the above link to Amazon.com is an affiliate link.  Should you purchase anything from Amazon.com after clicking the link, I may receive a commission.

Remember the days when your liquor cabinet was filled with cheap brands like Aristocrat Vodka, Bowman’s Run, and Virginia Gentleman Bourbon, and how you swore that once you made a little more money, you’d stick to nothing but top-shelf fire water?

Turns out, The Great Recession has thrown cold water and a dash of sobriety on those plans.

According to an industry report by the Distilled Spirits Council, released as part of an Associated Press article, the amount of liquor sold increased over the past year, however, drinkers turned away from name brands and to less expensive, “value” brands.

Considering the economic climate over the past year, it’s pretty obvious why both of the aforementioned points are no-brainers.

Increased Liquor Consumption: We’re in the worst recession since WWII. Economic downturns, in general, tend to make people grouchy and want to drink more. Seems to me the worse the economic situation, the grouchier people are and the more they want to self-medicate with booze.

Buying Cheaper Brands: Again, we’re in the worst recession since WWII. Unemployment is the highest it has been in nearly 30 years. When people don’t have jobs or are worried about losing the one they have, they tend to spend less money. Since drinking alcohol is a discretionary expense, it is likely one of the first places people look to rein in their spending.

So, what are your thoughts? Has The Great Recession caused you to change your drinking habits? Where else have you made subtle cuts to save money? Leave your comments below.

Is it just me, or does it seem like every other commercial on the TV or radio is for some sort of debt relief or debt consolidation company?

I know things are very tough right now with the economy. Unemployment is at the highest levels since the early 1980s, it’s still very hard for small businesses and consumers to get access to credit, and the housing market – the single largest source of personal wealth in this country – will probably never rebound to its 2005/2006 peak.

But, are things so bad and were we collectively such terrible money managers that we need to be completely inundated with companies offering to help us settle our credit card debt for pennies on the dollar?

Considering much of our (fake) economic prosperity over the past 20 to 25 years has been fueled by debt spending – both by our government and by the general public – it makes sense that we’re in a world of hurt. After all, it’s easy to spend on debt when all you have to do is do a quick cash-out refinance of your always-increasing-in-value home.

But now that the refinance and home-equity loan spigot has been all but turned off thanks to rapidly falling home values – nearly one in four borrowers is underwater – we actually have to pay down our acquired debt with our savings – which, for a while, was either negative or right around zero percent.

Couple this with the fact that the number of Americans who filed for personal bankruptcy surged by almost 33% in 2009, it’s easy to see why there is such a demand for debt consolidation and credit counseling services. After all, we wouldn’t be surrounded by these advertisements if they were falling on deaf ears.

Hopefully The Great Recession has reminded us that frugality is good, make sure we live within our means, and save for a rainy day – or in this case a rainy two years.

What are your thoughts? Please leave your comments below.

First, let me state that I’m not entirely proud of what I’m about to say, but at the same time I hope that you’ll learn from what I’m about to say.

Early this morning, when I couldn’t stand to watch ESPN any longer due to the Tiger Woods “news,” I flipped to one of my free movie channels and started watching Confessions of a Shopaholic, staring Isla Fisher, the crazy sister in Wedding Crashers.

Anyway, Confessions centers around a woman, Rebecca Bloomwood, who as you’ve probably already guessed, is a shopaholic.  She is in massive consumer debt and has a collection agency hounding her, and to make matters worse, she doles out advice consumers while writing for a financial magazine.

Ok, I’ll confess, I thought it was a cute movie and was worth watching purely for entertainment purposes (not to mention Isla Fisher is very nice to look at).

Despite the entertainment factor, I thought there were actually some pretty good financial lessons to be learned from the movie.

1) Know the differences between needs and wants. For those of you who are regular readers of The Personal Finance Program, you know this is something I talk about regularly, and is critically important to getting your finances in order.

In Confessions, Bloomwood is constantly buying new clothes and fashion accessories, despite having closets full of clothes, scarves, purses and shoes.  Whenever she sees something she wants, she gets it, even though it’s certainly not something she needs.  Over time, these purchases put her tens of thousands of dollars in credit card debt.

2) If you’re in consumer debt, you should make paying it down as quickly as possible a high priority. One of the things that gets Bloomwood into such a huge financial hole is doesn’t make paying down her debt a priority.  While the movie never talks about what sort of interest rate she’s paying, we can assume that because she’s in deep credit card debt, the interest is at least 18%, if not more.

Over time, the interest continues to accrue, and eventually snowballs into such a giant number that it’s very hard to get out of.

Obviously, the best thing to do is avoid getting into this debt in the first place.  If you weren’t able to avoid it, try your best to make more than the monthly minimum payments.  This will allow you to pay off your debt much faster, and could ultimately save you thousands of dollars in interest costs.

3) Don’t delude yourself into thinking you don’t have a problem. The final thing that ends up hurting Bloomwood is the fact she refuses to admit that she has a serious problem.  Instead of admitting her issues, she continues to avoid the debt collection agency all while continuing to spend money she doesn’t have on things she doesn’t need.

Had Bloomwood admitted her shopping and spending issues and put together a plan to pay off the debt, she would have been in a much better situation.

Just remember, lying to yourself won’t make your debt go away.

Anyway, if you’re looking for a cute movie that actually has some worthwhile advice, by all means, check out Confessions of a Shopaholic.

Can you think of any other movies that have good financial advice?  Leave a comment below and share your thoughts.

Per the new FTC regulations, the above links are affiliate links (via Amazon.com), and should you purchase anything after clicking the above links, I will receive a small commission.

The other day while I was driving home from work, I heard a radio ad for a debt consolidation company that, for lack of a better term, made my blood boil.

I don’t remember the exact wording of the commercial, but the basic gist of it was there’s a vast conspiracy by the banks and credit card companies of the world to punish you and ultimately keep you and your family in debt for time and eternity.

In short, the ad made it seem like your debt wasn’t your fault.

Don’t get me wrong, for people who are in debt because they’ve had to charge basic living expenses due to their own or family health issues, being out of a job for a prolonged period of time, or anything like what I’ve just mentioned, the debt is certainly understandable, and I completely sympathize with your situation.

However, if you are in credit card debt due to nothing more than imprudent spending,  I’d like you to click on the video below to watch a Saturday Night Live skit that should be able to help solve your money problems.

DON’T BUY STUFF YOU CAN’T AFFORD

I know that because the video above is from SNL, it probably won’t be taken seriously.  That being said, the skit’s message is something that any good consumer – or someone who strives to be a good consumer – should live by.

In fact, these words should be expanded to say don’t buy stuff you can’t afford or don’t really need.

Whether we don’t know a need vs. a want, make a lot of impulse purchases, or buy things to impress people we don’t even like (i.e. keeping up with the Jones), far too often we waste our money, having nothing to show for it, and end up in a financial bind.

So, the next time you go shopping – whether or not you’re in debt – really think about both whether you can afford and need what you’re about to buy.

If the answer is no for either, put your wallet back in your pocket and walk away!

I’ll be the first to admit, when lottery jackpot hits a hundred million dollars, I catch myself daydreaming about what it would be like to win and have all that money.  I’d probably buy a giant house with a lot of land, get a bunch of nice cars, take my family on a nice vacation, you know, all that stuff you’d probably want to do.

But, somewhere in the middle of my daydream reality smacks me in the face and sends me back to the real world.

Winning the lotto isn’t ever going to happen for me, and, I hate to be the bearer of bad news, but it’s never going to happen for you either.  Sorry to burst your bubble, but it’s the truth.

For example, let’s look at the odds of winning Powerball, one of the largest lotteries in the United States.  According to the Powerball website, the chances of you hitting the jackpot and becoming an instant multi-millionaire are 1 in 146,107,962.  Going by these statistics, if you played $20 per week, it would take you about 7,305,398 weeks – or 140,488 years – to hit the jackpot.

In looking at these odds, if you spend $20 per week on the lotto, you’re essentially wasting $1,040 per year.  Even if you win a couple of bucks here and there, you’re still probably going to be in the hole over $1,000 each year.

What would happen if you kept extra $1,000 each year and used it wisely?  You could pay down your debt debt, start and/or grow a retirement account, start a college fund, start a small business, take a vacation… I think you see where I’m going with this.

To further illustrate the point – what would happen if you took that $1,000 per year and invested it in a money market account that earned, on average, 4% annual interest?  Here’s a table that shows how much money you’d have after 25 years:

Thanks to your will power and the power of compounding interest, after 25 years of saving as opposed to playing the lotto, you would have just over $43,000.  If you had played $20 per week over those same 25 year, more than likely you would be out around $25,000.

That’s a swing of over $68,000 in your favor.

However, if for some reason you’ve decided that today is your lucky day and you absolutely feel like you have to play the lotto because the jackpot is $350 million – don’t worry, I’m in this boat – just play $1.  It’s not as if you’re going to have much better odds by spending $20, $50 or even $100.

Just remember, the odds of winning the lotto are nearly 150 million to 1 - take the sure thing and keep your hard earned money in your pocket.

Seeing as this is a finance website and not a health website, I’m not going to spend time writing about all of the physical health benefits of being a non-smoker. And I certainly won’t spend time reminding you that if you smoke, you’re increasing your risk for heart disease, stroke, cancer and that you’re likely to live 10 fewer years than a non-smoker.

(Sorry, guess I just sort of did.)

All health issues aside, what I’d really want to show you is the negative effect smoking has on your financial health.

According to TobaccoFreeKids.org, the average price for a pack of cigarettes in the United States is $4.80. That means that an average person who smokes one pack per day spends roughly $1,750 per year on cigarettes. That’s a lot of money to be spending on something that’s so bad for you and those around you.

So, what would happen if you took the money you would have spent on cigarettes and invested the money instead? Here are two scenarios that show how much money you could potentially lose out on by lighting up, based on smoking a pack a day for 25 years.

Scenario #1 – Investing in a money market account with an average annual yield of 4%:

Scenario #2 – Investing in a mutual fund with an average annual yield of 8%:

In the money market scenario, by investing the $1,750 that would have been spent on cigarettes, you would have about $76,000 (pre-tax), instead of being out $44,000 with nothing to show for it. That’s a swing of $120,000 in your favor.

In the mutual fund scenario, by investing the $1,750 you would have otherwise spent on cigarettes, you would have roughly $138,000 (pre-tax) instead of being out $44,000. That’s a swing of $182,000 in your favor. That’s some serious money!

Even if you decided not to invest the $1,750, but instead put it toward paying off credit card debt or increasing principal payments on your mortgage, you’ll be much better off financially than if you let all that money go up in smoke (pun intended).

So, if you can’t get yourself to quit smoking for the health benefits alone, at least try it for the financial benefits. Either way, down the road you’re going to be a lot better off if you kick the habit now.