According to the Forbes website, car sales in August were up 26.5% from July, and there were a reported 700,000 new car deals made across the country in direct response to Cash for Clunkers.  While those numbers are impressive, we should look a little deeper.  Will the effects be lasting?  What were the other consequences?

The Shredding of the Clunkers

Encouraging people to drive more fuel-efficient cars is an excellent idea.  Getting them out of their so-called gas-guzzlers will save them money in the long run and have a positive effect on the environment.  However, there has been a lot of debate surrounding the way the cars that were turned in for the program were taken off of the road: they were required to be shredded.  No donation to charities or countries in need, no spare parts or scrap metal saved—the whole thing had to be shredded.

True—this does ensure that the turned-in cars remain off of the road.  But the program turned away cars made prior to 1989, which eliminated many of the cars that are true gas-guzzlers.  And while there were different requirements for different types of cars to qualify (i.e., sedans vs. pick-up trucks), many people could qualify just by getting a new car that got only 2 miles per gallon better than their current one.  This leads to perfectly good cars with at least decent gas mileage being completely destroyed.

Who Really Used Cash for Clunkers?

Used cars did not qualify for this program; you had to buy new.  That’s not necessarily bad by itself—who doesn’t love that new car smell?  But new cars are always more expensive than used cars.  Even with the $4500 tax credit, this leaves out the people with limited funds who may truly have been in need of a better car, new or not.

It has been argued that the people who took advantage of Cash for Clunkers were the ones that were already in the market for a new car, the same people that already had enough money and a good credit score.  The only real difference could be that it may have enabled them to make their purchase sooner than they were anticipating.  So in this case, purchases that would have been made during the remainder of the year were simply crammed into the month of August due to a limited-time offer.

The overall idea was definitely a positive one, fueled by good intentions.  Yes, it did spark sales, but the numbers are still not in the range they used to be in past years before the recession.  With Cash for Clunkers over (and many dealerships still waiting to be reimbursed from the government…), it most likely will not create any long-term effects in the way of auto sales, and people who really needed a new car in exchange for their 1988 model are still waiting for their stimulus offer.

For many people, their job is closely tied with their identity and their sense of self-worth, so it can be difficult to adjust to the idea of no longer having that job.  Reality needs to be considered, though.  Do the positions in your field seem likely to open up and expand again after the recession?  If so, update your resume, hone your skills, and never stop looking for new job opportunities.  Right now, you do have a full-time job—looking for a job.

If it seems like your field may never recover, it might be time to consider a career change.  Is there something else you’ve always wanted to do?  Now can be the best time to go for it.  Or maybe there’s another field closely related to yours where your skills would be welcomed.  Try your job search using different position titles or job descriptions.

Of course, you need to analyze your financial situation.  Don’t hesitate to apply for unemployment assistance.  It can be a long process, so start soon and stay on top of it.  The amount your receive might not be much considering your previous income, but something is better than nothing.  If you have a savings account, you may have to dip into it in order to get by.  Be sure to figure out how long you can get by with your current finances.  As somber as it is, this may be a good motivator to continue your job search even when it seems bleak.

Finally, don’t let your emotions get the best of you.  A good way to keep up your self esteem and happiness level is to continue your hobbies.  Of course, you might have to give up expensive ones, but keep up with the ones you can.  Consider volunteering.  You’ll get a boost knowing you’re helping others, and you might even learn new skills for your resume or find a job connection.

And don’t underestimate the positive effects of exercise and keeping yourself healthy.  Exercise releases endorphins, kicks your metabolism into gear, and just makes you feel better overall.  You’ll need a positive outlook to survive this period, as well as to ace your next job interview.  It will come; be patient, and stay focused.  And don’t be afraid to ask for help.

You know how scammers send “phishing” emails to try to get your personal information, right? They send you an email that looks like it is from PayPal or Bank of America about how there is suspicious activity on your account and you must log in immediately. You click the link and it takes to you a site that looks identical to PayPal, so you proceed to log in and the next day you realize you’ve just fallen victim to a scam.

The email you received was not from PayPal and either was the website you submitted your information. If you username and password is the same as your other accounts, the scammer now not only can deplete your PayPal account, but they now have access to your email, any personal information you may have in there, and other private/financial accounts.

Once they’re in your email, they change the password so you’re locked out, but they have full access to your account. So they figure they’ll have some fun and email all your friends and tell them you’re in desperate need for $500 and to send it to X PayPal account. So now they’ve stolen your money as well as your friends and family.

That’s nothing new… but what I just experienced caught me off guard.

I received a text message that read:

From: Name of my bank
Message: Due to unusual activity, your account has been closed. Please call us at 555-555-5555

Without hesitation, I clicked the button on my phone that automatically dials the number listed in the text message. It’s a nice, one-click feature that makes it easy for people to mindlessly make a phone call. But what I heard was quite an interesting message:

This is a message from the Federal Trade Commission. This number has been disconnected because it may be involved in a scam. You may have  received a message by email or text message to call this number about your account. No matter how real it seems, that message was a trick.

Yikes! I’m curious what would have happened before the FTC shut these guys down. Would someone have answered asking for my Social Security Number and bank information to verify my account?

It’s quite scary how creative and smart these scammers can get, but it’s good to know that it doesn’t take long for them to get caught. Unfortunately, they’ll probably be right at it again.

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Maybe it’s the holiday season, but people seem to be more empathetic. Everyone in some way is touched by the economic recession, which makes us all more human and connected in some way. When we are able to directly relate to what other people are going through, we feel safe exposing our vulnerable side.  It allows each person to relate to their neighbor, their community and their family.  Topics, such as money, that were once taboo are now discussed out in the open.

And while the economy may have gone back 10 years in time financially, it’s as if our lives and habits have gone back 30 years. We are revisiting our parents’ and grandparents’ generations in regards to past-times and entertainment.  Think what it was like before the age of video games.
When siblings shared bedrooms in a “starter home” that fit the family budget.  And when Americans valued their time with their family, and overall were more conservative with their money–appreciating what they could afford and respecting what they could not.

We have operated for a long time with the idea that investing in the stock market and in real estate carried very little risk. We thought of how much money we could make and not how much money we could lose. We now know that it was fools’ gold, and a great lesson on how investments and risk actually works. It may be a tough lesson to learn, but it is a very valuable and necessary one.

As a result of the recessed economy and portfolios, people are learning what it really means to diversify and why it is important to keep your assets properly balanced. When the stock market is losing money, it forces you to explore and familiarize yourself with other places to put your money based upon your risk tolerance. In other words, we’re becoming more financially educated.

One of the best outcomes from these troubled times is that families are coming closer together. Families are actually eating dinner together as they are no longer eating out to save money.  As a result, parents are getting to know their children better and finding time to talk to them about the things going on in their daily lives.

I find it interesting that movie theaters get busier the worse the economy gets. Now that people are budgeting their money, families fall back on the entertainment they remember from their youth, which leads to more quality time spent together. People are not just throwing away money like they used to. For the first time in a long time, Americans are taking a good hard look at their income, their expenses, and preparing for “what if” scenarios.

All of this, are things we should have been doing all along, but now we are doing it out of necessity. That’s a good thing. We are modeling good behavior for our children and teaching them the value of a dollar — something that our youth for the most part had no previous concept of.

For those who have money to spend, there are some great opportunities all around. From rock bottom prices on laptops and TVs to unbelievably priced shares in the stock market. Your dollar can go a long way during an economic recession.

All in all, we may be facing some tough, stressful times, but we are becoming more human again and that as they say is priceless.

As we know, there are many creative ways to make money. You can invest in stocks, invest in real estate or start your own business. The list goes on. But in Illinois our politicians consider these concepts so outdated. They like to pride themselves for “thinking outside of the box.” Unfortunately that creativity generally leaves the truly creative within a box of another kind — a cold cell block.  They’re creative, just not too smart.

So yesterday was just another winter day in the Windy City. as our very own Governor Rod Blagojevich was led away by FBI agents from his home for corruption charges. While I try to avoid politics as much as possible and keep the discussions on the numerous ways to create wealth, I just can’t resist commenting on his creative thoughts on how to become a millionaire.

Living just two blocks away from the Chicago Blagojevic home, I’ve always wondered what goes on inside that house every day — now due to the convenient surveillance tapes I no longer have to wonder.

Today, our esteemed Governor Blagojevich is “upbeat” and back to work just one day after his arrest.  And you thought going to work after embarrassing behavior at an office Christmas party was uncomfortable. Lucky for him he has company in the FBI’s attention today. Our ever honorable Rep. Jesse Jackson Jr. confirmed that he is indeed Senate Candidate 5 — the individual Blagojevich was caught talking to on the FBI surveillance tapes about his willingness to pay money in exchange for Obama’s vacant Senate seat and $1 million in campaign contributions. Whoops.

So the FBI seems to be getting the best deal — 2 for the price of 1.  And who can say that anyone is truly shocked?  What would a political decision in Illinois be without handshakes full of money? What surprises most Illinois residents is not that Blagojevich was arrested. Everyone knows when you sign up for a political position in Illinois that corruption and eventual imprisonment is a job requirement. The shock value of this story is that the man was making deals when he knew his conversations were being monitored for another investigation he is currently under. We blame him not for his corruption but for his stupidity. We can tolerate the criminal politicians who run our state and city, just not the inept.

So it’s clear that Blagojevich is obviously just not cut out for the job.  If you haven’t mastered the Illinois way of “pay to play,” you don’t deserve to serve… yourself that is.

I wish I could credit the person who stated after Obama’s election win that, “Maybe now Illionis will be recognized for someone other than Al Capone.” Well, they got their wish. Although I imagine they are now wishing that the glory days of Capone’s corruption and swindling as a means to get the job done (St. Valentine’s Day Massacre) was back in Chicago visitor’s minds — at least Capone tourism pays. And you know how Illinois folks like to make a buck.

It’s not all bad news for Governor Blagojevich. Luckily he won’t have to decorate his cell all by himself. Illinois has a wonderful tradition of mentor/mentee partnering in the state prisons. He will be warmly greeted by his predecessor, former Illinois Governor George Ryan, who is getting the top bunk ready.

I’m sure they’ll have plenty to share. Maybe they can work together on Blagojevich’s presidential bid for the 2016 presidential race that he plans to run for. I’m sure the next Illinois Governor will have begged the President to pardon him by then — another fine Illinois tradition.

And poor Jess Jackson Jr.  He was so close to being able to buy himself the Christmas present that he always wanted.  Apparently he didn’t read the memo on proper instructions for how to “pay to play.”  Amateur.