It’s exciting news, but it remains to be seen if consumers kept up these good habits on Black Friday. US retail sales hit $11.4 billion to kick off the holiday shopping season, which is exciting for retailers—but not exciting if it means people are spending beyond their means.

A recent study by the Western Union Co. shows the number one consumer worry this holiday season is overspending. To prevent holiday-induced debt, create a budget before you hit the mall (or click your mouse) and stick to it. Going cold turkey on using credit cards for the holiday season is another smart move to avoid debt.

Can’t break the credit card habit? Counting on only making the minimum payment each month on a holiday credit card bill? Think again. Only paying the minimum will cost you more in the long run. For instance, if you rack up a $3,000 shopping bill on a credit card with an 18 percent interest rate, it will take 10 years to pay it off if you’re just making the minimum payment. That includes $1,700 in extra interest payments!

Instead of racking up debt this holiday season make a list- check it twice, budget wisely, and when you find that perfect present for Mom or Uncle Mike, be nice to your budget and resist the urge to splurge on “just one more” for yourself. Check out this BetterBudgeting.com article for 63 great gift ideas under $10!

The retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year…the average cost of this year’s feast for 10 is $49.20.

Don’t fret too much: While the price for Thanksgiving may have gone up this year, it is still a bargain at only $5.00 per person. Additionally, you can follow the tips below to avoid breaking the bank on this year’s turkey feast:

Beware the “Organic” Label

If you plan to buy organic this Thanksgiving, it is going to cost you dearly. We found a prepared dinner at Whole Foods with an organic turkey for $189.99—nearly 4x the non-organic price! If you want to eat local on top of that, it’s going to cost you even more. A 16lb local organic turkey from localharvest.org will run you around $180 for just the bird!

Take a Pass on Your Favorite Brand

Those name brands we all know and love can cost more than you would think at the checkout line. Save money by opting for the store brand version which typically costs 30 percent less. Turkey is turkey, after all. Your taste buds won’t know the difference, but your wallet will!

Stick With Tradition

Steer clear of less traditional options like a boneless rib roast or a pork roast. They might be tempting, but these options are usually much more expensive than a classic turkey.

No matter what you plan to do this Thanksgiving, remember to stick to your pre-planned budget. Those discounted items can be tempting, but consider if the item is something you actually need or just another impulse buy only to be remembered after it expires.

FirstJobs.org

If you’ve read a newspaper in the past 3 years, you may have been alarmed at reports of a volatile stock market, high unemployment, and retirement plans in jeopardy. Ever wonder if there’s anything you can do to protect yourself during troubling financial times? There is. And the more you can do to protect yourself from the economic factors outside your control, the better off you’ll be — not only now, but also when the Great Recession is officially behind us.

1. Finish your college degree. What do most people who have survived the recession financially intact have in common? A college degree. According to the Bureau of Labor Statistics, the unemployment rate for people without them (10.7%) is more than double that for those with a bachelor’s or better (4.4%). If you haven’t completed your undergraduate coursework, get it finished now to improve your employment prospects.
2. Cut your living expenses. The more you can do to reduce your monthly living expenses, the better. That might mean carpooling to save on commuter costs, trading in your vehicle for an older model to cut down on your car payments, or even moving to a cheaper apartment. Sounds painful, but once you make a few cuts on your monthly expenditures, the savings add up fast. Just be sure to put it into an emergency fund in an interest-bearing account.
3. Stay employed while job hunting. This one isn’t entirely under your control, but if you’ve contemplated quitting your job — don’t. More hiring managers are enacting “unemployed need not apply” policies. It’s not illegal, even if it doesn’t seem fair. Bottom line: Having a job while job hunting makes you seem more desirable in a competitive applicant pool, so don’t give up on yours, even if you can’t wait to leave.
4. Pay off debt ASAP. If you have any debt with unfixed interest rates — like student loans, credit cards, or a mortgage — refinance to secure the best terms you can. Then pay that debt down as quickly as you can. If interest rates rise, you’ll save a bundle in the long term and you’ll feel the freedom of being debt free.
5. Network when times are good. Having a group of people concerned about your wellbeing means you’ve got a list of people to call if you’re ever out of a job. To take one personal example: A friend of mine was laid off at the beginning of this year. She got home that night and starting calling people she knew in her industry — and one of those calls quickly led to a job offer. You never know until you ask.

The news can seem bleak, but the economy has weathered worse dips before. At the end of the day, economic indicators simply reveal trends by individual consumers. Make the right choices to protect yourself and your family and sooner or later, the economy will recover. It always has.

Today’s expert is Steven Horwitz, the Charles A. Dana professor of economics at St. Lawrence University in Canton, NY. At Econ4U, we talk a lot about how you spend your money. But how much is that money worth—and who controls it? We asked Horwitz for three things you should know about inflation.

1. Inflation is caused by central banks creating too much money.

People tend to think that inflation is a rise in prices caused by greedy businesses. It’s not. Inflation refers to an increase in the overall level of prices, caused by an overactive central bank that’s creating (or “printing”) too much money and causing prices to rise for all the wrong reasons

For instance, when your local ice cream store slightly raises the price of a single-scoop cone after a record-breaking summer, they’re responding as any business would to an increase in demand for their product. That’s healthy. But if there’s an excess of money in the economy, prices don’t just rise at one store—they rise everywhere, as business owners mistake an excess of money for a change in demand.

2. Inflation harms the entire economy.

Because the excess money created by a central bank doesn’t appear in everyone’s bank accounts at once, some people get to spend it first.  One result is that not all prices change the same amount – some go up a lot, some a little, some can even fall.

This makes it hard for entrepreneurs (like the local ice cream store described above) to figure out whether the price changes are due to the inflation or due to longer-run changes in demand or supply.  Resources get misallocated, employees are hired or fired unnecessarily, and overall economic growth is reduced.

3. Inflation is often linked to large government deficits and debt.

When inflation is unexpected, it reduces the real burden of debt as borrowers pay back their loans in dollars that are less valuable than the ones they borrowed (because prices are now higher).  Of course, the largest borrowers these days are governments; our own is in debt to the tune of $14.5 trillion.

When governments run budget deficits and increase their debt, they face a large temptation to use their central banks to inflate and thereby reduce the real value of their debt.  We have seen this happen in other countries throughout history, with disastrous results for consumers as the value of their savings plummets.

Kaiser Family Foundation

The New York Times yesterday published a review of the Kaiser Family Foundation’s analysis of health-insurance premiums across the nation on its Prescriptions blog, which covers health-care issues. However, there is an economic fallacy lurking in its analysis worth pointing out.

The blog says:

If you live in Massachusetts or Vermont, the average monthly premium topped $400 a month in 2010, compared with just $136 a month in Alabama. The average across the country was $215 per month.

The authors of the analysis point out that some expensive states have higher insurance premiums because they make it easier for people with potentially expensive pre-existing conditions to get coverage.

The authors believe that the new federal health care law will probably reduce the variation in premiums, although they note that a state’s cost of living and overall cost of health care also contribute to the differences in premiums.

While it’s true that the Affordable Care Act will make premiums more uniform regardless of where you live, that idea is misleading. They’ll be more uniformly high — and covered up by subsidies for households between 133% and 400% of the poverty level, which puts the financial burden squarely on taxpayers. Additionally, the new law glosses over the reasons that certain states’ premiums are higher than average, like existing mandates for guaranteed coverage.

All of which leads us to question: “affordable care” for whom?

Today’s expert is Antony Davies, a professor at Duquesne University and a Mercatus-affiliated Senior Scholar at George Mason University. At Econ4U, we talk a lot about managing your own money—but what about the federal government’s money management skills? We asked Davies for three things you should know about the national debt.

1. The debt is yours. It is tempting to think of the government’s debt as the government’s problem. But remember that every dollar the government receives comes from taxpayers or is borrowed and must be paid back by taxpayers. That means that children today will be paying for today’s debt in the form of future higher tax rates. It’s the same as if your parents took out a credit card in your name and went on a spending spree. It doesn’t matter that your parents are doing the buying — you’re the one on the hook for the bill.

2. Don’t expect the rich to pay the debt. Even if the government taxed earnings over $250,000 at one-hundred percent, it wouldn’t raise enough money to fund its operations — let alone pay down the debt. The debt is so large that the only way to pay it down without cutting spending is to raise taxes at all income levels.

3. It isn’t going to get better. Even if the government pursued the politically unpopular course of raising taxes on the middle class, it wouldn’t raise enough money to pay down the debt and continue operating at its current level. If the government were a household earning $50,000 a year, it would be spending $85,000 a year and (so far) have racked up $320,000 on its credit card. The only way the government can hope to tackle its debt is to dramatically reduce spending –by dramatic, I mean cuts close to one-trillion dollars per year.

Note to Readers: Curious about just how big a trillion is? Click here to find out more.

Today’s expert is Mark C. Schug, a professor emeritus at the University of Wisconsin-Milwaukee and a national consultant on economic and financial education. The high price of a gas is a common complaint, but who’s responsible for those prices? And is that gas station boycott you heard about in a forwarded email really going to help matters?

1. Your local gas station isn’t responsible for rising gas prices. Most economists agree that gas prices are set by the laws of demand and supply.  Local gas stations are “price takers” and not ”price makers”—which means they’re paying the same high price you are. In fact, most retailers are only earning 1 to 3 cents in profit for each gallon sold.
2. High gas prices are painful for your wallet, but they do serve an important purpose. High gas prices are signals to oil producers that demand exceeds supply—which means they need to find more oil and come up new technologies.  Some oil companies are using new technologies in the old oil fields of the Texas Permian Basin; North Dakotans are aggressively developing oil deposits in the Bakken formation. Such new oil supplies may eventually bring oil prices back down.
3. Boycotting gas stations will not reduce the price of gas. Local gas stations are merely reflecting changes in the market—they have no more say over the price of gas that your local grocer or family doctor. What will reduce the price of gas is an increase in supply, which is why some elected representatives have discussed expanding supply by obtaining oil off the coast of Alaska, California, and Florida.

Consumerist.com

This week was the first Personal Finance Online Summit, held on Wednesday to give personal-finance experts the opportunity to discuss with the president the major financial issues affecting both the country at large and individual households on a smaller scale. At the end, President Obama shared the tenets he says he personally lives by. Here it is:

1. “Don’t spend all your money.” In other words: live within your means. Econ4U has a number of resources to help you on that path; click here for more info.
2. “Some folks say that investment is just another term for spending. There’s an important distinction.” We agree. For example, putting money away for retirement may feel like spending in the short term — after all, once that money is in your retirement account, you will no longer have easy access to it for a while. But making strategic investments and using debt wisely (like to buy a home to finance an education to qualify you for top-paying jobs) is the best way to guarantee a comfortable future.
3. “The general public does not have all the information they need [about] the federal budget.” This is a biggie. After all, it’s in the trillions, and most people find it pretty difficult to wrap their heads around that many zeroes. But making a point to educate yourself about how tax money is being collected and what it is spent on is the only way to develop informed opinions about how the country is doing and what can be done to improve the national financial outlook.

iStockPhoto.com

Ever wonder which industries are the most profitable? The answers may surprise you.

No shock here — finance is far and away the winner, with closed-end equity funds reporting a profit margin of 81%. That means that for every dollar an equity firm earns in revenue, it spends only 19 cents on the costs of doing business and selling that product. Other top industries include periodical publishing (with a profit margin of 32.8%) and internet service providers (at 28.7%).

Yet when it comes to where the Average Joe spends his money, the industries are not as profitable as consumers might think. For example, regional airlines report an annual profit margin of 6.1%. According to this chart, restaurants see gross profit margins of between 3-6%. Movie theaters, despite the ever-increasing price of admission and concessions, only net 5.4%. And the much-maligned health insurance industry has a profit margin of just 3.8%.

Take a look at the full Yahoo! chart here, sorted by profit margin in descending order. Are there any industries that surprise you by how profitable (or unprofitable) they are?

AgWired.com

Let’s talk turkey: Have you bought yours yet? If not, be prepared to spend a little bit more than you did last year, according to the American Farm Bureau Federation in its annual Thanksgiving survey of grocery stores.

The survey’s shopping list includes all the fixin’s for a classic Thanksgiving feast for 10 people (with requisite leftovers): a turkey, bread stuffing, sweet potatoes, rolls and butter, peas, cranberries, a crudité platter of carrots and celery, pumpkin pie topped with whipped cream, and coffee with milk. This year, such a feast runs an average of $43.47, up 56 cents from last year’s average of $42.91. However, the 2010 meal is actually more than a dollar cheaper than the $44.61 that Thanksgiving Day hosts paid in 2008.

Going organic this holiday season? Mint.com has an infographic revealing that the average price for an organic Thanksgiving meal could run as high as $179.22 or more if you do all your shopping at Whole Foods. (They don’t call it Whole Paycheck for nothing!)

Thanksgiving (and Black Friday the next day) always seems to bring out the bargain hunter in shoppers. This Houston blogger comparison shopped at three different food retailers to find the best price on turkey and sides. She found generic-brand turkey for $0.22/lb; compare that with the $4.79/lb organic bird that Mint.com found!

The best advice? Don’t be brand loyal and you’ll score some great deals — your guests will never know the difference.