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!

TheBigLead.com

Broke professional sports stars are nothing new, but ever wonder why athletes — with their outsize salaries — seem so much more prone to bankruptcy than Average Joes?

The New York Times took a shot at answering that question in a recent “Your Money” column by interviewing Hall of Fame quarterback Steve Young:

Steve Young has done pretty well for himself. He laid the groundwork for fiscal sanity by majoring in finance at Brigham Young University, won the most valuable player award after leading the San Francisco 49ers to victory in Super Bowl XXIX and is now a managing director at Huntsman Gay Global Capital, a private equity firm.

So how well did he do with his money when he started his professional career? “I wasn’t ready to deal with it,” he said. “Just take the driving analogy. Very few people would be able to handle going zero to 100. Good luck. It’s a lot, and it’s very fast.”

His advice for rookies is to deliberately slow down, way down, something echoed by the National Football League’s Players Association, their union. “ ‘Give yourself a time out’ is what I tell them,” said Dana Hammonds, the director of player services and development for the association. “Focus on football, and after you go through the season, you’ll have time to figure it all out. There is absolutely no need to get involved in any kind of investments. The only thing they need to do is figure out cash flow in their first couple of years.”

While few of us will ever earn the kind of money that a rising sports star can expect right out of the gate, that same advice holds true for anyone who receives an unexpected windfall, whether it’s a sweet raise or an inheritance. If there’s one lesson that Econ4U tries to pound home, it’s not what you make, but what you keep that matters most.

AmericanExpress.com

In the good ol’ days, a gold or platinum credit card signaled that you had arrived. It meant lenders considered you a good credit risk with significant spending and a sterling payment history. With that came perks, most often a higher credit limit and cash back on purchases as a concession for a bank’s best customers (and typically accompanied by an annual fee).

However, these days even recent college graduates are carrying around prestige cards. (I’m one of them: I got my first platinum plastic when I was 23 with just five years of credit history to my name.)

The average American has four credit cards with an average balance of $15,799 among those with credit-card debt. (Only 25 percent of Americans do not have any credit cards, and 30 percent of Americans pay off their balances every month.)

There are still perks-paying cards for those who actually avail themselves of such services. Take the American Express Centurion, a.k.a. the “Black Card,” which remains invitation-only. Just to qualify, a consumer has to charge six figures on an American Express account annually (exactly how much, the company will not disclose). And once your application is accepted, you can expect to pay a whopping $2,500 annual fee in addition to a one-time $5,000 initiation fee. In return, customers receive top frequent-flyer status on several airlines, free nights at the world’s most exclusive hotels, personal shoppers at stores like Gucci and Neiman Marcus, and 24/7 international concierge services.

Still, smart consumers are more interested in talking turkey: What’s the annual fee? What’s the interest rate? And are those perks worth the money?

BravoTV.com

The Real Housewives reality-television franchise has spawned more bankruptcy filings than pro sports and celebrity accountant Kenneth Starr combined. We wondered why, so we reviewed the most notorious examples of the “real housewives” living beyond their means.

• Teresa Giudice is one of the most combative Real Housewives of New Jersey, and with this group, that’s quite a feat. A year ago, she and her husband Joe filed for bankruptcy with liabilities approaching $9 million while their income was reported as only $79,000 between them. Yet in the season that’s currently on air, Giudice continued to shop ’til she dropped (or more likely, until her credit limit is lowered).
• Sonja Morgan cried during last night’s episode of the Real Housewives of New York City while discussing her recent bankruptcy filing, which disclosed $19.8 million in debt and $13.5 million in assets following her bitter divorce from John Adams Morgan, the grandson of financier J.P. Morgan.
• Alexis Bellino of the Real Housewives of Orange County — the original show of the franchise — nearly lost her $6 million home to foreclosure proceedings in December after her husband Jim, a real-estate speculator, filed for Chapter 11 bankruptcy proceedings. You can view the waterfront mansion here, which was taken off the bank’s hands in a March short sale for $3 million.
• Michele Salahi only appeared in one season on Bravo — in the now-defunct Real Housewives of D.C. — but it was long enough to reveal the company she owns with her husband Tareq has gone bankrupt.
• Taylor Armstrong from the Real Housewives of Beverly Hills likely knows full well that her husband Russell filed for bankruptcy in 2005 with less than $50,000 in assets and millions in debt, but that didn’t seem to stop them from throwing a lavish $60,000 party to celebrate their daughter’s fourth birthday last year.
• NeNe Leakes, the breakout star of the Real Housewives of Atlanta, was evicted from her five-bedroom rental home in 2008, owing $6,240 in back rent. That’s not all she and her husband Gregg owed, either: The Leakes family reportedly also owes more than $100,000 in unpaid taxes.

The question must be asked: Can’t Bravo scratch up some real millionaires for the casts of these shows, rather than glamorize these pretenders to wealth? Or does starring on reality television cause the featured families to lose whatever financial sense made them rich in the first place?

Either way, it can be tempting to watch the lifestyles of the “rich and famous” on television and want to mimic their lifestyles or spending habits. But the bankruptcy track records show that isn’t the best idea.

It’s been a few years since Saturday Night Live produced this skit — and boy, has a lot changed in the global economy since 2007 — but its message will still make anyone interested in personal finance giggle.

Starring Steve Martin and Amy Poehler as a frustrated couple in debt, the video hawks a free one-page book titled Don’t Buy Stuff You Cannot Afford. (The sequel, Seriously If You Don’t Have the Money, Don’t Buy It, is offered as a special gift.)

And while its intent is humor, the advice is sound. For (more practical) tips on saving up for a major expense, check out our Top 5 list on planning for a big purchase.

MIT.edu

Should colleges disclose to undergraduates the expected future salaries for people with degrees in their field of study? That’s the major question (no pun intended) posed by Georgetown University’s Center on Education and the Workforce, which compared the median lifetime earnings for bachelor’s degrees in a range of disciplines, from engineering and computer science to English and psychology.

The Washington Post reports:

According to the study, the median annual earnings for someone with a bachelor’s degree in engineering was $75,000. The median wage was $47,000 in the humanities, $44,000 in the arts and $42,000 in education or in psychology.

The individual major with the highest median earnings was petroleum engineering, at $120,000, followed by pharmaceutical sciences at $105,000, and math and computer sciences at $98,000.

The lowest earnings median was for those majoring in counseling or psychology, at $29,000, and early childhood education, at $36,000. Workers with a bachelor’s degree in English language and literature, the most popular major within the humanities, have median earnings of $48,000.

That means that an average B.A. in engineering is worth, salary-wise, up to two or three times what a degree in the humanities is. Not only that, but a recent study by the National Association of Colleges and Employers found that 56.2 percent of graduates with a computer science degree were considering at least one job offer, compared with just 19.5 percent of those with a bachelor’s degree in education.

Without question, the world still needs teachers and scholars in addition to scientists and engineers. But in an era when the average graduate walks away with $24,000 in student-loan debt, making an informed decision about what subjects to pursue should be part of the curriculum for every student choosing to invest big bucks in academic enrichment.

SingersRoom.com

Last October, R&B singer Toni Braxton filed for bankruptcy — for the second time in 12 years. The court determined she owed her creditors — among them Tiffany & Co., Neiman Marcus, and the Four Seasons — between $10 million and $50 million in unpaid debts.

Now Braxton has a reality television show ready to premiere this month, and from the looks of it, she hasn’t learned much from her mistakes:

However, the star appears to have shrugged off her legal woes for the filming of Braxton Family Values, according to the New York Post.

On the program, which premieres on April 12th, Braxton says, “I have a big-a** house, three cars, and I fly first class all around the world. Some say I have the perfect life.”

The trouble is, her track record shows she can’t begin to afford that “perfect life” that she’s bragging about. So much for “taking responsibility.”

Bankruptcy stays on your credit report for 10 years, so she can’t declare she’s broke again until 2020. But we doubt this is the last we’ll hear about her financial problems. Should we take bets on when Braxton will file for bankruptcy for a third time?

RealSimple.com

Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

Whether you’re drawing up a draft of your first budget or you’d like to tweak an existing plan, there are simple ways that you can free up more cash for savings or paying down debt. Today we examine a few of the most painless methods of doing just that.

1. Re-examine discretionary income. After adding up all your regular monthly expenses (like your rent, your gas bill, and your groceries), how much do you have left over? And where does it go? It’s not always the infamous latte: If you go to the movies every few weeks, download smartphone apps to relieve boredom, or head to happy hour at least once a week, chances are you have opportunities to save more. Figure out what they are and take advantage of them.
2. Make saving as necessary as paying your bills. The phrase “pay yourself first” always makes it onto lists like these, but what exactly does that mean? It means transferring money to savings from your paycheck before you have a chance to spend it. If you wouldn’t neglect to pay your rent, adopt that same mindset for your savings account — both for retirement and short-term savings.
3. Buying on sale doesn’t always mean you’re getting a deal. It’s as simple as it is true: The easiest way to save money is not to spend it. If you clip coupons for groceries that you wouldn’t normally buy otherwise, you’re better off ignoring coupons altogether. And remember that stores will often use “sale” signs to entice buyers while simultaneously marking up the regular retail price, so you’re not getting the deal you think you are.
4. Fill in your money pits. It could be a gym membership you no longer use or a car that’s in the shop more than it’s on the road. If the benefit you’re getting is outweighed by the expense, it’s time to cut your losses.
5. Shop around for better interest rates — even after you’re locked in. With closing costs to consider, refinancing a mortgage can be a costly proposition in the short term. But with rates trembling near record lows, those closing costs may pay for themselves in just a few years if your credit score is in decent shape. And refinancing a car loan (or renegotiating your cable bills) can be even cheaper ways to save more money monthly. Remember: It costs nothing to ask.

NBA.com

Just when you think playing for the NBA couldn’t get any better between the insane paychecks and adoring fans, here’s a new perk: If you’re a big enough star, your employer will even pay your way out of trouble with the Internal Revenue Service.

That’s what former Miami Heat point guard Tim Hardaway found out last month when his team bailed him out of tax trouble. By the time he retired in 2003, Hardaway was paid nearly $50 million over the course of his 14-year pro career, but the IRS says he owes $120,748 in unpaid income taxes dating back to 2005 and 2006.

Last year, the tax agency filed a lien against his 7,542-square-foot mansion outside Miami. But the Miami Heat has come to his rescue, buying the home for just under $2 million. The five-bedroom property (complete with swimming pool and private basketball court) is now back on the market for $2.5 million.

Unfortunately, financial illiteracy among pro sports players is nothing new. (This article from CBS Sports describes how rampant bankruptcy runs among retired basketball players, even as early as 5 years after they leave the game.)

If taking care of their own is a priority, perhaps rather than making a habit of bailing former headliners out of trouble, the NBA can focus more of its resources toward money-management classes for current players — before it’s too late.

According to the scientists who developed it, “The model was broken down using six immediately identifiable factors; weather (W), debt (d), time since Christmas (T), time since failing our new year’s resolutions (Q), low motivational levels (M) and the feeling of a need to take action (Na).” The result is the Monday of the last full week of January, which falls on January 24 this year.

I thought it was interesting that debt and busted New Year’s resolutions both factor prominently in Blue Monday, since they are both finance-related and typically things under our control. (Can’t do much about the weather, unfortunately.) So here are a few ideas to ward off the money blues and keep your finances in the black:

• Return some Christmas gifts. If you and your significant other went overboard on presents last months, discuss returning one of the more pricy gifts that might have been a stretch to afford. You’ll lose the regret and free up some money instantly.
• Get cash for used stuff. Alternatively, consider selling something you received for Christmas 2009 that has lost some of its luster over the past year — eBay and Craigslist are hopping in January, and you can always sell things like books, video games, and CDs on Half.com. Then turn around and put your newfound cash toward your credit card balance.
• Files your taxes early. Once you have all your tax forms, get to work on your federal tax return. The sooner you file, the sooner you can get your tax refund into your pocket. And the sooner you can adjust your withholding so you can stop giving the government a free loan of your rightful money.