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The Biggest Federal Income Tax Changes for 2015

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By Kristin Shaw

Spoiler alert: The Affordable Care Act is the granddaddy of tax law changes this year. In fact, it's the largest single change to the tax code in 20 years. It's a complex one to dig into, so let's set it aside for now. Besides the ACA, there are a few interesting changes that could affect you when you file that 2014 tax return next year.

1. Pell Grants, Living Expenses and Education Credits

Many students, by default, will calculate their Pell Grant funds as being used to pay for qualified education expenses, because their college applies the grant for tuition. It isn't wrong, but that amount will decrease the expenses eligible to be used to claim an education credit like the American Opportunity Credit.

Instead, Pell Grants can now be allocated as living expenses, up to the full amount of actual living expenses -- even if a student's college actually applied the Pell Grant to his tuition and fees. The amount will then count as taxable income, but it might be worth it to maximize the education credit. This complexity affects almost 9 million students. (Note: More resources on this are forthcoming from the IRS. It's also never a bad idea to consult with a tax professional on your specific situation, because this can get tricky.)

2. Bitcoin

If you received payments this year in virtual currency, then you should include the fair market value of it with your annual income. So yes, it's taxable. Different calculations will apply if you invest in virtual currency or receive it as compensation for services.

3. Saving for Health Care

Flexible Spending Accounts are traditionally use-it-or-lose-it plans. You can save pre-tax dollars to pay for health care expenses, but they must be used within a plan year. As of 2013, you are allowed to roll over $500 from an FSA into the next plan year. Now there is another change.

If you have an FSA this year and carry over $500 into 2015, you will be ineligible to participate in a Health Savings Account in 2015. Yes, the entire year. This only applies to general purpose FSAs, not ones for specific uses like dependent care or dental expenses.

You might need to plan ahead based on this new restriction. As Kevin Martin, a tax attorney at The Tax Institute at H&R Block points out, "If you really want to set up an HSA for 2015, it may be best not to carry forward those unused FSA amounts, even if it means that you will lose them."

4. Unemployment Benefits

Being without a job is stressful, mentally and financially. For many job seekers, unemployment benefits provide a valuable bridge between their current situation and a new position. The bad news is that these benefits are taxable income. You will receive Form W-2 and/or Form 1099-G with the amount of benefits reported. Use this information to file your tax return.

Additionally, a recent U.S. Supreme Court decision clarified that any supplemental unemployment compensation - not tied to state unemployment benefits - paid by a former employer to a laid-off employee will be taxable as wages, and therefore social security taxes will need to be withheld from them.

5. IRA Rollover Limits Starting in 2015

This one's a tax change for 2015 -- it won't effect your 2014 return, but will affect your savings next year. Starting Jan. 1, 2015 you can only make one rollover from an IRA to another IRA in a 12-month period. A rollover is described as withdrawing the funds from one IRA, holding them for less than 60 days and then depositing them into another IRA account.

Taxpayers can still make as many trustee-to-trustee transfers as they like over the course of a year. (That means you can tell Bank "A" to send your IRA funds to Bank "B" -- the money is never actually withdrawn and in your possession.) If you roll over more than one IRA, the withdrawals after the first will be taxed to you at regular rates, plus potentially a 10 percent early withdrawal tax. In addition, the disallowed rollover will be subject to the regular IRA contribution limits. If the rolled over amount exceeds your allowable IRA contribution, it will be treated as an excess contribution and subject to a 6 percent excise tax. The takeaway: Withdraw IRA funds with great care and attention in 2015 and going forward.

6. Foster Care

Most of the time the phrase "foster care" conjures an image of a child being placed with a family, unrelated to them, for temporary care. While that is a correct impression, for tax purposes the definition is now a bit broader. If you provide non-skilled medical support services or care for a person, living in your home, who has physical, mental or emotional issues, and you receive payments from the state or certified Medicaid provider, those payments can likely be excluded from your taxable income. Even if the person is related to you.

"This new guidance from the IRS is a complete about-face from its old position," said Lynn Ebel, a tax attorney and manager of The Tax Institute at H&R Block. "The IRS used to tax this money received for care for relatives since they couldn't possibly meet the definition under the tax-free rules of being a foster child. Now thanks to this new clarification of the definition, taxpayers who care for their family members can receive the same tax-free treatment."

As tax-free money, however, it is not earned income used to compute the Earned Income Credit.

7. Keeping up With the Joneses, or Inflation

They aren't big changes, but some of the fundamental parts of tax filing have undergone inflation adjustments for 2014. You are now in the highest -- 39.6 percent -- tax bracket if your adjusted gross income is more than:
  • $228,800 for married filing separately.
  • $406,750 for single.
  • $432,200 for head of household.
  • $457,600 for married filing jointly.
The standard deduction amounts have also increased a bit. Single or married filing separately is now $6,200, a $100 increase from 2013. Head of household is $9,100, a $150 increase. Married filing jointly or qualifying widow(er) is $12,400, a $200 increase. These will be higher if you are over 65 years old, or if you are blind. Finally, each exemption claimed in 2014 is $3,950, a $50 increase.

8. The Extenders

There were 55 tax benefits extended in the American Taxpayer Relief Act of 2012 that expired on Dec. 31, 2013. That means if you filed your 2014 tax return today, you would not be able to claim any of those benefits. Of course, you won't file your 2014 return today. It isn't due until April 15, 2015. And it is possible that Congress will choose to extend some, or all, of the tax breaks from ATRA 2012 before that time. Of the expired benefits, 12 impact individuals, and 14 affect small businesses. They include:
  • The higher education tuition deduction, which allowed taxpayers to deduct between $2,000 and $4,000 of qualified tuition expense.
  • Energy credits, which included credits for home improvements that benefitted energy efficiency like heating and cooling systems, insulation and windows.
  • Educator expense deduction, which allows teachers to claim up to $250 of unreimbursed classroom expenses.

 

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Time's Running Out for End-of-Year Retirement Planning

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When it comes to saving for your retirement, time can either be your best ally or your worst enemy. If you start early and save consistently, it's quite possible for you to wind up retiring as a multimillionaire. The longer you wait, however, the tougher it is to amass the kind of money you'll need to build a nest egg that'll keep you comfortable through the rest of your life.

Not only do the number of years you have left matter when it comes to saving for your retirement, but the time during the year that you invest for your retirement matters, too. There are key deadlines you have to meet if you want to take advantage of qualified tax-deferred retirement plans like your 401k or an IRA. Meet those deadlines and you may be able to cut your taxes now or in retirement and take advantage of decades of tax-deferred compounding. Miss them, and you miss out on those advantages.

The Clock Keeps Ticking

If you have access to a 401k, 403b or the U.S. government's Thrift Savings Plan, you have until Dec. 31, 2014 (or more likely -- your last paycheck of the year) to contribute to your plan. In 2014, you may be able to contribute as much as $17,500 to your plan if you're under age 50. If you're aged 50 or older, the 2014 limit rises to $23,000 this year thanks to a $5,500 catch-up provision. In 2015, the limits increase to $18,000 if you're under age 50 and $24,000 if you're at least 50.

Regardless of if you have access to such a plan at work, you may be able to contribute to either a traditional or a Roth IRA. The window to contribute to your IRA for 2014 is open until April 15, 2015. If you're under age 50 at the end of 2014, the maximum potential contribution amount is $5,500. If you're age 50 or older, the limit is $6,500. For 2015, the limits will be unchanged.

If you're self-employed, you have a little more time. You have until the deadline for your 2014 taxes -- including extensions -- to establish and fund your SEP IRA. That gives you until Oct. 15, 2015, to set up that plan to shelter up to 25% of your self-employment income, but no more than $52,000 for 2014 (the limit becomes $53,000 in 2015).

Why These Deadlines Matter

Qualified retirement accounts like these are incredibly powerful tools for you in your retirement planning. Money you sock away in the plans grows tax deferred and may offer you either a tax deduction as you contribute or the opportunity to take qualified withdrawals completely tax free. You may also be eligible for a match in your employer-sponsored plan -- but you need to participate to get that match. Additionally, the money you have socked away in qualified plans may be protected from your creditors, too, based on either federal or state laws.

On top of all that, you generally face a 10 percent penalty on top of your ordinary income tax rates if you take money out of your qualified retirement account before age 59 and a half (though there are some exceptions to that penalty). That penalty can be a great deterrent against drawing down the money before you retire, helping improve the chances that the money will actually be there for your retirement.

Still, to take advantage of all those benefits, you have to get your money invested in your plan by its deadline. Otherwise, the window for that particular year slams shut forever. If you miss a deadline, you can always invest in an ordinary brokerage account and call it your retirement account. Just remember, though, that if you miss that deadline you won't get any of the unique tax, creditor and potentially matching benefits that come as part of a qualified retirement plan.

Your Retirement Depends on It

The deadline for your 401k, 403b or Thrift Savings Plan contributions for 2014 will be here sooner than you think, and the other plans' deadlines aren't really all that far behind. In addition, the sooner you get started, the faster you can put your money to work compounding for you. That, more than anything else, is the key financial ingredient that will get you through your retirement comfortably.

So use these looming deadlines as a reason to get started and fund your retirement plans. Your future self will thank you for it.

Motley Fool contributor Chuck Saletta has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Your Online Order's Here, at a Walmart, Home Depot Locker

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walmart.ca
By Brian Sozzi

Big-box retailers are trying to make online shopping more convenient by installing lockers and gated areas inside their stores for the ordered merchandise.

Walmart (WMT) recently announced an expansion of its "Grab & Go" locker service in Canada to 33 locations from 10, or about 8 percent of its total store base in the country. A person who buys merchandise from Walmart Canada's Web store is emailed when the item is sent to a nearby locker. An access code consisting of six digits is punched into a keypad on a blue and yellow locker bearing the Walmart name, and away the shopper goes.

There is no additional cost to the consumer for the service; it simply replaces a trip to the human-operated service desk to pick up a product that was ordered online.

Walmart reportedly began to test the pickup service in the U.S. last year at some stores in the Washington, D.C., area. The company didn't respond to an inquiry on how many of its 4,987 stores in the U.S. have "Grab & Go" lockers.

Home Depot Has Something Similar

Home Depot (HD) calls the spaces "in-store pickup cages," which are for merchandise that is ordered online and sent for pickup at a store. The merchandise is corralled behind a locked cage.
Once a customer comes to collect his item, a Home Depot employee removes it from the cage and hands it off. According to a Home Depot spokesman, the pickup cages are in 550 of the company's 1,917 U.S. stores.

Amazon.com (AMZN) launched lockers in 2011, which originally went onto the sales floors of 7-Eleven, Staples (SPLS) and RadioShack (RSH). The large, yellow and grey lockers with Amazon emblazoned in white ink are no longer in Staples and RadioShack. But they are increasingly popping up in Los Angeles, Philadelphia, San Diego, San Francisco, Delaware, New Jersey and Virginia. Target (TGT) hasn't followed the trend.

Multiple Goals

Walmart and Home Depot hope to accomplish a couple of things with their new in-store pickup options. One is that the pickup alternatives help to reduce customer disappointment arising from slow home delivery times and from theft. Retailers stand to lower their own shipping costs. Another aspect is to give customers ordering items on a mobile device the ability to quickly consume the product. The need to keep tech-savvy, online buyers happy from the start of a purchase to the finish is critical in the retailers maintaining torrid online sales growth rates.

Third-quarter online sales for Home Depot increased 40 percent year-over-year, after rising 50 percent in the year-ago period. "We saw increased traffic to our sites, growth in online conversion and an increase in the number of orders being picked up in the store in the quarter," Home Depot president and CEO Craig Menear said on a Nov. 18 earnings call.

Walmart's U.S. e-commerce business, including store-fulfilled sales, contributed about 0.2 of a percentage point to the division's overall 0.5 percent same-store sales increase in the third quarter. Walmart president and CEO Doug McMillon said, "We are developing the capabilities to save our customers time and give them the choices they want by integrating digital and physical retail in ways that are convenient for what they want at that moment."

 

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10 Secret Strategies to Save Big Bucks at Amazon

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Secret Ways to Save Big Bucks on Amazon

By Maryalene LaPonsie

What's not to love about Amazon? OK, I am sure someone can tell me why they don't love Amazon, but I'll be the first to raise my hand and say I'm a fan. In fact, thanks to Amazon, my husband and I did 99 percent of our Christmas shopping for the kids last year while sitting in bed watching "Fringe." It even offers Sunday deliveries, so it's terrifically convenient. Amazon pricing can often be lower than that of brick-and-mortar stores, but there are even bigger bargains to be found.

1. Amazon Associates

Amazon Associates is the website's affiliate program, meaning every time you send someone to Amazon, you get paid a percentage of whatever they spend. It's really geared toward bloggers and small businesses, but anyone can sign up.

The key to making it work is to find a friend who is a regular Amazon shopper and also willing to sign up. You can't earn an affiliate commission on your own purchases but you can on someone else's.

So you and your friend both sign up as affiliates. Then, when you shop on Amazon, you use their affiliate link and when they shop, they use yours. It's an easy way to make up to 10 percent cash back on each other's purchases.

2. Subscribe and Save

If you want to be sure you never run out of toilet paper or laundry soap, you can use the Subscribe and Save feature available on many household items.

Basically, it works like this. You agree to receive regular, automatic shipments of certain products and in exchange you get free shipping and a discount. The discount starts at 5 percent for a single item and climbs to 15 percent if you subscribe to five eligible items.

And I'll let you in on a little secret. Since you can cancel at any time, some people sign up for Subscribe and Save, receive one shipment at the reduced price and then cancel.

3. Amazon Prime

For heavy-duty Amazon buyers like me, Amazon Prime is the way to go. It costs $99 for an annual membership but you get free two-day shipping, which can more than pay for the price of the membership.

Plus you can borrow from an extensive Kindle library for free. And that "Fringe" my husband and I were watching while Christmas shopping? Yup, that was streaming free compliments of Amazon Prime. There's also free streaming music and free unlimited cloud picture storage.

Maybe you aren't sure you spend enough at Amazon to justify shelling out $99. You're in luck. Amazon gives you a free one-month trial before it charges you -- a one-month trial that may be perfect for, say, the month right before Christmas.

4. Deal Tracker Sites

Regular Amazon shoppers know that prices at the online store fluctuate all over the place. That's where deal tracker sites come in handy. Websites such as CamelCamelCamel.com and TheTracktor.com can show you historical Amazon price data as well as send alerts when a price on a certain item reaches a preset amount.

You can price watch on your own by clicking "Save for Later" on the items that interest you. Creating a wish list is another option. Sometimes, if you put an item in your cart and leave it there for a few days, the price will drop, assumedly to entice you to buy.

5. Amazon Mom

Moms are big business for retailers. All those diapers and wipes and baby supplies add up quickly, but you can get 20 percent off with Amazon Mom.

Amazon Mom is free to join and gets you 20 percent off diapers and wipes, as well as all the benefits of Prime membership. If you're already an Amazon Prime member, you'll receive all Amazon Mom benefits free. If you're not, signing up will get you a free 30-day trial, but when it ends you'll be charged the regular $99 charge for Prime.

6. Amazon Student

Amazon Student is essentially a reduced-price version of Amazon Prime. For half the price of Prime, you get the same benefits, plus special student offers and promotions. You can also get a six-month free trial of Amazon Student compared with the 30-day trial offered to Prime members. During those six months, you don't get access to free video streaming or the Kindle lending library, but with six months of free two-day shipping, it's hard to complain.

To get an Amazon Student membership, you need an .edu email address or must be able to otherwise verify your enrollment status.

7. Unearth Deep Discounts

Every day can be like Black Friday on Amazon if you know where to look.
  • Used items. Amazon allows third-party sellers and individuals to sell used items through its site. Some of these "used" items are actually brand new and sold at deep discount. Look for items that are eligible for Prime or Super Saver shipping. In addition, watch out for those penny books that come with $15 shipping and handling charges.
  • Deal of the Day. Every day, Amazon has a new deal. You can find it by clicking on "Today's Deals" next to the Amazon logo at the top of the page. As I write this, the current daily deal is up to 50 percent off select Hasbro toys.
  • Lightning Deals. These are also found on the Deal of the Day page. They offer a limited number of deeply discounted items for only a couple of hours.
  • Outlet Department. The Amazon Outlet can be buried on the site and may be difficult to find unless you stumble on it. Here's a direct link to the Outlet, and that's where you'll find some of the best deals on new items.
8. Warehousedeals.com

Warehousedeals.com? What's that all about? Aren't we talking about Amazon here? Sure, and Warehouse Deals is the quick link to Amazon's warehouse where you can find all their refurbished and open box items.

9. Amazon Freebies

If you watch the Deals Section on Money Talks News, you probably already know that Amazon regularly offers promos including free music downloads, free apps, free e-books and free streaming video credits.

In addition, look for items that come with built-in freebies. One of the most common deals to find on Amazon is a free instant video for streaming with the purchase of select movies.

10. Get Your Swag On

Finally, one of the best ways to save on Amazon may be to go off Amazon. A number of rewards and survey websites let you earn points that can be redeemed for Amazon gift cards.

Swagbucks.com and MyPoints.com are examples of sites offering Amazon gift cards. Another option is to shop through Ebates.com and get up to 8 percent cash back depending on the department of your purchase.

So those are 10 ways the pros pay less when shopping on Amazon. What is your favorite way to save? Leave a comment below or visit the Facebook page of Money Talks News to share your savings strategy.

 

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'The Worst Holiday Gift I Ever Received': 6 Funny Stories

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Nerdy Geek Christmas Man holding wrapped holiday gift
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By Kristin Colella

NEW YORK -- What were they thinking? If you've ever had this thought when opening a holiday gift, you're not alone. Most of us can recall a time when we received a present that made us blush, cringe or burst out in laughter because of its downright bizarreness. Ugly sweaters are a common tale, but some gifts really tip the scales in terms of inappropriateness. MainStreet spoke with folks around the country to find out the absolute worst holiday gifts they've ever been given -- and their answers didn't disappoint. Read on for six of the strangest stories we were told.

Elastic Boundaries


Name: Patrick Gevas
Occupation: Public relations professional
Location: Miami, Florida

"The weirdest gift I ever received was from my sweet, if a little misguided aunt. At a conference, she picked up a condom in a key chain that had an outdated '90s Nike logo on the side that said: 'Just use it.' For some reason, she thought of me, and I honestly didn't know what to think, but giggled uncomfortably and thanked her. The last thing you want at Christmas is for your family to think you're a man-whore, especially when it's unfounded. However, it made for a hilarious re-gift, so it all worked out in the end."

All That Remains


Name: Stephanie Freeman
Occupation: Arts & Humanities professor
Location: Raleigh, North Carolina

"Once, an old family friend who was in his 70s gave me a Bundt pan. It was wrapped in old, wrinkled paper. When I took off the paper, I saw a box that looked like it was at least 30 years old. It had turned brown and had obviously been opened before. Inside was the Bundt pan that was pictured on the box along with the crumbles and outline of a cake that had been baked in the pan. My initial thought was: 'How dare he give me a used and dirty pan?' However, after some thought, I remembered how his wife, a woman I loved dearly, loved to bake. I imagined her using this pan and baking one final cake before she passed away. Then, that pan became one of my favorite kitchen items. I keep it in a place of honor in my kitchen with the crumbles still intact."

Sticker Situation


Name: Sheila Rodriguez
Occupation: Digital marketing specialist
Location: Greenwich, Connecticut

"At my previous job, we had a holiday party where everyone drew numbers to a corresponding gift. I 'won' press-on sticker nails and a bar of soap. Compared to the masses of store and iTunes gift cards, movies and cute office décor exchanged amongst staff, I wondered what this person was thinking. I no longer work there for various reasons, but sticker nails got the ball rolling."

Now Bring Us Some Figgy Pudding


Name: Dan Greenberg
Occupation: Lawyer
Location: Little Rock, Arkansas

"Every Christmas, my grandfather would send us a fruitcake purchased from a regionally famous Texas bakery. Some say fruitcakes are an acquired taste, but nobody in our house ever acquired it. Each year, the fruitcake would just sit there, growing more stale and inedible, until we pried it out of its cylindrical tin and threw it away. At least now its container would be useful to store things in."

Holiday Chicanery


Name: Valerie Cudnik
Occupation: Blogger for DollyDomestic.com
Location: Chesapeake, Virginia

"I'm a woman of bizarre hobbies, including chicken keeping. Last year several of my Christmas gifts were really for my hens, like a heated water dish to keep their water from freezing. I did find the water dish useful, though. My husband was definitely looking out for me when he bought that gift. Trudging out to the chicken coop when it's freezing to check their water is no fun."

Cutting-Edge Technology


Name: Welmoed Sisson
Occupation: Home inspector
Location: Boyds, Maryland

"My most memorable 'weird' Christmas gift was when I was 10 years old and fascinated with biology. My parents gave me a dissection kit wrapped in 'Happy Birthday' paper, with instructions saying 'Don't use this on the birthday baby,' meaning Jesus. I used that kit for years to dissect dead guinea pigs that my parents brought home from the lab where they both worked."

 

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Garage Birthplace of Apple is a 'Bit of a Myth,' Wozniak Says

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www.losaltosca.govIn 2013, Los Altos' Historic Commission called Steve Jobs' boyhood home a historic resource.
Say it ain't so, Woz.

The rags-to-riches story of Apple (AAPL) computer starting in the garage of Steve Jobs' Los Altos boyhood home is "a bit of a myth," says Apple co-founder Steve Wozniak.

The Woz told Bloomberg TV that the famous garage, heralded as the birthplace of the Apple empire, was really only a staging place where he'd take finished computers and "make them work."

"The garage represents us better than anything else, but we did no designs there," Wozniak said. "We would drive finished products to the garage, make them work, then drive them to the store [in Mountain View, Calif.] that paid us cash." The first Apple computers sold retail for $666.66 each, netting Jobs and Woziak about $250 profit, Woziak said.

Nothing Productive? Really?

Wozniak said the garage never housed a bustling workforce of groundbreaking geeks. "There were hardly ever more than two people in the garage, and mostly they were just sitting around doing nothing productive."

Apple Inc. Co-Founder Steve Wozniak Interview
David Paul Morris/Bloomberg via Getty ImagesApple co-founder Steve Wozniak
In 2013, the Los Altos Historic Commission declared Jobs' ranch home on 2066 Crist Drive a historic resource, which means any renovations must be reviewed by the city.

The commission chose the property, built in 1952, because it is where "the Apple Computer Company was founded and the first 50 to 100 Apple computers were assembled," according to commission documents. The designation means the property is eligible for listing on the California Register of Historic Resources and the National Register of Historic Places.

Contrast this to another famous garage. Ten years ago, Hewlett-Packard (HP) returned the garage at 367 Addison Ave., Palo Alto, to conditions much as they were in 1939, when Bill Hewlett and Dave Packard established their partnership -- and some say birthed the whole Silicon Valley.

 

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Why More Americans Are 'Self-Gifting' This Holiday

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Black Friday at the Toys R Us, in Vienna, VA.
Bill O'Leary/The Washington Post via Getty Images
By Beth Pinsker

NEW YORK -- Jill Bascou looked like a typical holiday gift shopper standing in line on Thanksgiving Day shortly after the Target (TGT) in Marlton, New Jersey, opened at 6 p.m.

Except she wasn't buying for other people.

The 39-year-old was waiting to get herself an iPad. In her cart was the xBox her husband had been coveting, and her father was in another part of the store hunting down a giant, cheap TV -- for himself.

Retailers call this self-gifting. Look at a major store's circular advertising holiday gifts -- from the $5 toasters at Kohl's (KSS) to a $279 Dyson vacuum at Target -- and you'll see the top draws are items people typically buy for themselves.

Marshal Cohen, chief retail analyst at NPD Group, started tracking the trend of self-gifting six years ago, after interviewing a shopper on Black Friday at a Macy's (M).

The woman had a huge pile of clothes over one arm and a smaller pile on her other. Cohen was surprised to learn that woman was buying the big pile for herself. Her mother and sister were the designated recipients of the other pile.

Now 30 percent of purchases over the Thanksgiving holiday are attributed to self-gifting, Cohen says. Surveys from the National Retail Federation bear this out, showing that 77 percent of shoppers took advantage of discounts to buy for themselves over the holiday weekend.

Toys are the obvious exception, but almost everything else -- the TVs, the home goods, even the clothing -- are items that people are often buying for themselves.

Retailers have been catching on, adjusting inventories and messaging. Kathy Grannis, spokesperson for the NRF, points to a pop-up gift tag ad recently on Gap's (GPS) website that read "From Us to You," and was clearly meant to engage self-gifters.

For clothing retailers, Grannis says the enticements to shoppers are often in the form of a significant discount off the whole store. Old Navy offered half off everything on Thanksgiving Day, which drew Sarita Henriquez, 36, of Burlington, New Jersey, to shop for herself, with no set spending limit in mind.

Greed Is Good

"I'm being greedy this year," Henriquez said as she waited in her car for the store to open at 4 p.m.

"I hear self-gifting reported as greediness, but there's really more nuance than that," says Kit Yarrow, a consumer psychologist and author of "Decoding the New Consumer Mind."

Yarrow breaks down self-gifting holiday shoppers to three types: those buying special things like outfits and decor in order to be more social; those delaying purchases because they are expecting bargains and those who are buying on impulse based on what's available.

Impulse buyers are the key target for retailers' special doorbusters. These are folks like the Hartman brothers, (Ed, 25, Shawn, 24, and Tyler, 21) who, while visiting family for Thanksgiving, each waited for cheap TVs at a Best Buy (BBY) near Cherry Hill, New Jersey, to put in their own homes.

Cohen's advice for shoppers who missed out on the early sales and are still waiting for big discounts: "Be patient and wait for the price to come to you."

Don't obsess over getting the absolute rock-bottom prices if it means delaying what you want, Cohen adds. You can always return an item if you find it for less and try to get the store to price match -- as long as you have your receipt.

And just wait until you see next year's sales.

"Retailers will figure this out," says Cohen. And then Thanksgiving week will be even more about self-gifting, "and then there will be another set of doorbusters for later in December."

 

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Buyer's Guide: Your Store Strategy for Holiday Shopping

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Buyer's Guide: Holiday Store Strategy

Whether you're battling the crowds on Black Friday or squeezing your shopping in a few days before the holidays, you have to get your mind, body and most importantly -- wallet -- ready for the challenge.

Before the big day you need to create a strategy. Don't just map out the stores you want to hit, but have a list of the gifts you need to buy and an itemized budget of how much you can afford to spend for each person.

After you create your gift list remember to follow these 4 money-saving tips:
  • Check coupon and promo code sites like Retail Me Not before you buy.
  • Get your smartphone ready with price comparison apps like RedLaser to scan a barcode and discover if you can get a better deal anywhere else.
  • Sign up for email alerts from your favorite stores
  • Use social media to get the scoop on recently released specials
If pushing through a crowd in search of the perfect gift sounds like fun, then be sure to arm your body properly. Don't bother with heels; embrace sneakers, jeans, and a comfortable top. You don't need to impress the masses in the store; you want to dazzle your family and friends with your gift-giving skills. And don't forget to bring a snack with you for when you start to get a little cranky later in the day.

For the sake of perspective, start by purchasing your less expensive gifts first. If you drop $200 on the perfect tech toy right away, a bunch of $10 items are going to seem incredibly cheap by comparison.

Most of us end up spending more than usual this time of year. Responsible credit card holders can use the opportunity to get more cash back or rewards. If one card offers a rotating 5 percent cash back for online shopping this quarter, then use it for all online spend, while another may provide 2 percent back in department stores. Use sites like MagnifyMoney.com to see which cash back card provides the best value for your spending habits. Just remember -- if you can't pay your balance off on time and in full, it isn't worth the rewards. Once you start paying interest to the banks, your cash back loses its value.

Those who worry about overspending at the holidays should consider leaving their credit cards at home in favor of debit cards or just cash.

Shopping without a strategy will lead to frustration, returning unwanted purchases and certainly increased spending. Don't forget to include the people in your life you need to tip or buy small presents for like the doorman, children's teachers, a babysitter or mailman.

Reduce your stress and impact on your wallet this holiday season by setting a budget, writing out a gift list, finding the cheapest deals, and actually put away the money you saved into a rainy day fund. Oh, and don't forget to tell Santa what you want this year, too!

 

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Honda Adds 2.6 Million Vehicles to Air Bag Recall List

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Honda-Odyssey Investigation
Honda Motor Co. via APThe 2003 Honda Odyssey minivan is among those vehicles listed in Honda's expanded recall.
DETROIT -- Honda plans to replace the replace driver's air bag inflators on 2.6 million more vehicles as it expands repairs to the entire U.S.

The Japanese automaker is the only company to comply with demand from the U.S. National Highway Traffic Safety Administration to do repairs nationwide. Honda says it's doing so to address customer concerns.

Air bags made by Japanese supplier Takata Corp. can inflate with too much force, blowing apart a metal canister and spewing shrapnel. At least five people have died due to the problem.

Honda (HMC) and other automakers have limited recalls to high-humidity states mainly along the Gulf Coast. Investigators have said that the air bag inflator propellant, ammonium nitrate, can burn faster than designed if exposed to prolonged high humidity. That can cause it to inflate air bags too fast.

Last week, a top Honda executive told a U.S. House subcommittee during a hearing that his company would expand the driver's side repairs nationwide. Honda isn't calling it a recall, though, and is maintaining that the driver's air bag inflators aren't defective. Instead, Honda calls the expansion a "safety improvement campaign."

Takata and Chrysler (FCAU) have refused the government's demand to expand the driver's side repairs nationwide. Ford (F), Mazda and BMW haven't decided on whether to expand repairs nationwide.

Honda's expansion brings its total driver's side repairs to 5.4 million vehicles, including Honda's most popular models. Owners in high-humidity areas began getting notices by mail in September. Those in other parts of the country will get letters over time.

Affected vehicles include:
  • 2001 to 2007 four-cylinder Honda Accords
  • 2001 and 2002 V6 Accords
  • 2001 to 2005 Honda Civics
  • 2002 to 2006 Honda CR-Vs
  • 2003 to 2011 Honda Elements
  • 2002 to 2004 Honda Odysseys
  • 2003 to 2007 Honda Pilots
  • 2006 Honda Ridgelines
  • 2003 to 2006 Acura MDXs
  • 2002 and 2003 Acura TLs
  • 2002 Acura CLs
Meanwhile, for passenger-side air bag inflators, NHTSA says a recall remains limited to high-humidity areas because there's no data to suggest a problem with them nationwide.

 

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Money-Saving Holiday Shopping Strategy -- Savings Experiment

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Holiday Store Strategy
Whether you're battling the crowds on Black Friday or squeezing your shopping in a few days before the holidays, you have to get your mind, body and most importantly -- wallet -- ready for the challenge.

Before the big day you need to create a strategy. Don't just map out the stores you want to hit, but have a list of the gifts you need to buy and an itemized budget of how much you can afford to spend for each person.

After you create your gift list, remember to follow these money-saving tips. First, check coupon and promo code sites like Retail Me Not before you buy. Then get your smartphone ready with price comparison apps like RedLaser to scan a barcode and discover if you can get a better deal anywhere else. Sign up for email alerts from your favorite stores, and, finally, use social media to get the scoop on recently released specials.

If pushing through a crowd in search of the perfect gift sounds like fun, then be sure to arm your body properly. Don't bother with heels; embrace sneakers, jeans, and a comfortable top. You don't need to impress the masses in the store; you want to dazzle your family and friends with your gift-giving skills. And don't forget to bring a snack with you for when you start to get a little cranky later in the day.

For the sake of perspective, start by purchasing your less expensive gifts first. If you drop $200 on the perfect tech toy right away, a bunch of $10 items are going to seem incredibly cheap by comparison.

Most of us end up spending more than usual this time of year. Responsible credit card holders can use the opportunity to get more cash back or rewards. If one card offers a rotating 5 percent cash back for online shopping this quarter, then use it for all online spend, while another may provide 2 percent back in department stores. Use sites like MagnifyMoney.com to see which cash back card provides the best value for your spending habits. Just remember -- if you can't pay your balance off on time and in full, it isn't worth the rewards. Once you start paying interest to the banks, your cash back loses its value.

Those who worry about overspending at the holidays should consider leaving their credit cards at home in favor of debit cards or just cash.

Shopping without a strategy will lead to frustration, returning unwanted purchases and certainly increased spending. Don't forget to include the people in your life you need to tip or buy small presents for like the doorman, children's teachers, a babysitter or mailman.

Reduce your stress and impact on your wallet this holiday season by setting a budget, writing out a gift list, finding the cheapest deals, and actually put away the money you saved into a rainy day fund. Oh, and don't forget to tell Santa what you want this year, too!

 

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Market Wrap: Wall Street Stumbles, Oil Falls to 5-Year Lows

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Richard Drew/AP
By Richard Leong

NEW YORK -- U.S. and European stocks fell Monday after weak Chinese and Japanese data stoked worries about slowing global economic growth, while oil prices sank to five-year lows on expectations of oversupply into 2015.

The euro sagged to 2½-year lows against the dollar after European Central Bank policymaker Ewald Nowotny warned of a "massive weakening" of the eurozone economy and said the purchase of state bonds could provide a boost. His comments came just days after Standard and Poor's downgraded its credit rating on Italy, the bloc's third-largest economy, to a level just above junk status.

Nowotny's remarks raised bets in the bond market for a fresh round of ECB stimulus in the first quarter of 2015.

Data out of Asia and the sell-off in oil took a toll on sentiment.

In energy markets, Brent crude settled down $2.88 or 4.17 percent at $66.19 a barrel, a five-year low, on predictions that oversupply would keep building until next year after OPEC decided not to cut output. U.S. crude futures settled down $2.79 a barrel, or 4.24 percent, at $63.05.

Japan reported its third-quarter economic contraction was deeper than previously thought, while China's unexpectedly weak import data signaled slowing demand in the world's second- biggest economy.

The disappointing economic developments abroad overshadowed Friday's robust U.S. jobs report, which revived bets the Federal Reserve might consider ending its near-zero interest rate policy in mid-2015.

"I think people are looking at the potential ripple effects from the slide in oil. You're seeing some of these ripple effects today," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, noting there also seems to be profit-taking as year's end draws near.

The Dow Jones industrial average (^DJI) closed down 106.31 points, or 0.59 percent, at 17,852.48, the Standard & Poor's 500 index (^GPSC) ended 15.06 points, or 0.73 percent, lower at 2,060.31 and the Nasdaq composite (^IXIC) finished down 40.06 points, or 0.84 percent, at 4,740.69.

In the currency market, the euro fell to a more than 2½-year low against the greenback at $1.2247 before rebounding to $1.2309 in U.S. trading, up 0.2 percent from Friday.

The dollar also retreated against the yen and other major currencies as traders booked some profits on the U.S. currency's recent gains linked to expectations the Federal Reserve might raise interest rates sooner in 2015 than had been expected.

The dollar was down 0.6 percent at 120.71 yen after striking a seven-year peak of 121.84 yen in Asian trading.

Bets on a fresh round of ECB stimulus in the first quarter of 2015 helped boost prices of U.S. and German government bonds. Benchmark 10-year U.S. yields fell to 2.26 percent and 10-year Bund yields declined to 0.72 percent.

Spot gold prices edged up 1 percent at $1,204.50 an ounce on some safe-haven demand on the modest losses in U.S. and European equity prices.

-With additional reporting by Chuck Mikolajczak and Caroline Valetkevitch in New York; John Geddie and Patrick Graham in London; Blaise Robinson in Paris; and the China economics team.

What to Watch Tuesday:
  • At 10 a.m. Eastern time, the Labor Department releases the Job Openings and Labor Turnover Survey for October, and the Commerce Department releases wholesale inventories for October.
These selected companies are scheduled to release quarterly financial results:
  • AutoZone (AZO)
  • Burlington Stores (BURL)
  • Conn's (CONN)
  • Korn/Ferry International (KFY)
  • Krispy Kreme Doughnuts (KKD)

 

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The 'Worst Toy of the Year' and Why It's So Bad

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Asian baby using tablet
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An app for infants that gets them to use on iPad while watching TV on Monday was branded the Worst Toy of the Year by the children's advocacy group Campaign for a Commercial-Free Childhood.

The group awards its dubious TOADY (Toys Oppressive and Destructive to Young children) to toys and gizmos seen as harmful to babies and young children.
The winner (loser?) this year: the AT&T U-verse app by BabyFirst.

"The BabyFirst U-verse app definitely deserves a TOADY," Executive Director Susan Linn said. "While there's no evidence that even one screen benefits babies, training them to split their attention between two screens is absurd-and potentially harmful."

Here's a description of the app from AT&T (T):

The app features a wide array of animals, shapes, colors and objects from which babies and toddlers can select. With one simple touch, they can see their masterpiece instantly appear on the TV screen while tuned to BabyFirst.

Campaign for a Commercial Free Childhood put forward a slate of nominees for the prize and then put it to a vote. The BabyFirst app got 33 percent of the vote, beating out the Barbie Loves Girl Scouts doll, the miWorld Mini Mall, the Anything app by Cartoon Network and LeapBand by LeapFrog.

The issue of screen time for small children has become increasingly heated as more and more devices become part of our lives. It is common today, for instance, to see toddlers and even infants holding smartphones and tablets.

But the influential American Academy of Pediatrics recommends that the littlest kids should be kept from screens and devices, not encouraged to use them


"Television and other entertainment media should be avoided for infants and children under age 2," the group said in its policy statement on the issue. "A child's brain develops rapidly during these first years, and young children learn best by interacting with people, not screens."

In comments by those voting, it was clear that the idea the app was marketed to those who have infants was particularly disturbing.

Other voters indicated they were irked with the Girl Scouts taking a $2 million payment to license a Barbie doll given the issues some people have had with Barbie dolls creating an unrealistic view of what a woman should look like.

A Chicago woman commented: "This horrifying toy is letting girls down in two ways: promoting body image problems, and showing that their beloved Girl Scouts could be sold to the highest bidder!"

The winner of the TOADY last year was the iPotty, a training toilet with a built-in screen.

 

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Walgreen Tests Virtual Doctor Visits Through App

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Walgreen Virtual Doctor Visits
Steven Senne/AP
By TOM MURPHY

Walgreen is testing a new telemedicine service that lets patients see a doctor without leaving home or visiting any of the drugstore chain's clinics.

The Deerfield, Illinois, company said Monday that patients in California or Michigan can now contact a physician around the clock through Walgreen's mobile application for smartphones or tablet computers.

The virtual visits cost $49, and doctors can diagnose and treat problems that aren't emergencies and don't require a physical exam, such as pink eye or bronchitis. The physicians, who are licensed to practice in the patient's state, also can write prescriptions.

Drugstore chains such as Walgreen (WAG) and CVS Health (CVS) have been adding clinics to their stores for several years, muscling in on what has traditionally been the domain of primary care doctors as they expand their health care offerings. The new virtual visits add another layer to that competition. Health insurers like Anthem, big employers and hospital groups also offer virtual doctor visits.

The idea of convenience ... is really becoming a dominant theme in health care.

The retailers are bulking up their health offerings in part to serve an aging baby boomer population and people who are gaining insurance coverage through the health care overhaul. The companies say they also are trying to answer a growing customer demand for convenience.

"The idea of convenience ... is really becoming a dominant theme in health care," said Walgreen Chief Medical Officer Dr. Harry Leider. He said the company believes the telemedicine service will help build brand loyalty with customers.

Walgreen, the nation's biggest drugstore chain with more than 8,200 locations, plans to eventually expand its program to additional states.

The virtual doctor visits are available through both iOS and Android versions of its mobile application. The service, developed with MDLive, doesn't require that patients fill prescriptions from those virtual visits at Walgreen pharmacies.

 

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This Holiday Season, Try These American-Made Brands

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This holiday season will have most of us scrambling to find the perfect gift for the special people in our lives. These companies might have quality American-made gifts that will satisfy you -- and them.

The Music Lover

If you're looking for a guitar, try a Collings out of Austin, Texas. Collings have been making guitars for the likes of Lyle Lovett and Joni Mitchell, as well as the casual musician, since 1989.

For the drummer in your life, look into Ludwig's Keystone Series. The Elkhart, Indiana, drum line is made under the same quality and structural standards of its Classic Maple and Legacy drums.

If you're in the market for concert and marching percussion instruments, consider Dynasty Band Instruments from Lake Geneva, Wisconsin. Under the DEG Music products brand, Dynasty offers marching, concert and Bergerault instruments. "These instruments are all American-made, making Dynasty the only major company in the drum industry to manufacture ALL of our instruments domestically," the company says.

With bluegrass music undergoing a resurgence, a Deering Banjo from Spring Valley, California, might be what you're looking for. It has made more than 100,000 banjos for 39 years under the Deering, Vega, Tenbrooks and Goodtime banjo lines.

The Pinterest Addict

Those looking to inspire Pinterest boards with exquisite designs and interior decoration should see the mosaics from New Ravenna. Since 1992, the Exmore, Virginia, company has provided a second home of sorts to its workforce.

Seattle's Destination Lighting creates fixtures for in and out of the home. It offers a quick search of all its American-made products, as well as "nearly a century of brick and mortar experience."

With factories in Massachusetts and Connecticut, Country Curtains is proud to make "as many of our textile products as possible right here in the United States."

In Pawtucket, Rhode Island, you can find braided rugs courtesy of Colonial Mills, which has been in business since 1957.

At Harden in McConnellsville, New York, the fifth generation of Hardens oversees furniture production. Their use of nearby cherry and walnut wood earned them a feature on ABC News. Its website elaborates, "Contract case goods are produced using native-grown solid cherry grown on Harden woodlands, while local Harden craftspeople tailor all upholstery pieces using current market standards and processes."

The Kids (And Kids at Heart)

Whether you're shopping for a kid -- or someone with the spirit of one -- there are not many American options. Ohio-based Little Tikes and Step2 offer extensive lists of American-made products on their websites -- with Step2 indicating which products were made domestically and which came from a mix of imported parts.

For the budding engineers, eight building sets from K'Nex in Hatfield, Pennsylvania, might fill the bill.

For a slightly retro feel, the Smalley family in Wytopitlock, Maine has been crafting heirloom quality wooden toys, dollhouses and play sets for almost a quarter century as Elves & Angels.

Since 2009, Shinola has been helping bring industry back to the hard hit city of Detroit with nearby Wisconsin steel frames for its bicycles.

And when metal playgrounds were all the rage in backyards, South Dakota's Rainbow Play Systems brought wooden ones back -- including making one for the Obama daughters at the White House. Rainbow still has some inexpensive sets made in China -- be mindful when shopping.

The Fashionista

Finding entirely made in America clothing brands can be hard. Many brands have production split between domestic and international production. Heated clothing from Stoneville, North Carolina's Gerbing might be the made in America purchase of the season. Recent ownership changes have brought most manufacturing back to North Carolina from China. Some gloves and styles are still produced in China as owners try to move all production back to the U.S.

Another company fighting to bring -- and keep -- production home is New York's Brooklyn Industries. "It's an incremental change," explains co-founder and CEO Lexy Funk.

Another company trying to keep work in the States is the often-controversial American Apparel. While its practices and founder Dov Charney have isolated fans in the past, the brand strives to employ and produce as many products in its Los Angeles factories. "Our team of sewers, shippers, cutters, dyers and creatives accounts for more than 7,500 employees at our LA-area factories alone," its website explains.

One brand making neckwear and accessories in New England is General Knot & Co., which collects fabrics from across the world for its creations. Founders Ann and Andrew Payne launched General Knot in 2010 after directing creative teams for brands like Ralph Lauren (RL) and Tommy Hilfiger.

For the eco-conscious fashionista there is Earth Creations out of Bessemer, Alabama. Its lines of sustainable fiber clothing came from co-founders Joy Maples and Martin Ledvina's experiences with Alabama clay that acted as an unintentional clothing dye. Most of their men's line is manufactured in Nicaragua, while women and children's products originate in the United States more often.

The Outdoorsy Friend

Since 1991, Chapman Skateboards of Deer Park, New York, has made custom and predesigned decks for themselves as well as Zoo York, Infamous, Traffic and small independent brands.

South Carolina's Confluence Outdoor operates eight brands of canoes and kayaks. In recent years, new management and owners have refocused the brand.

Darkfin Gloves of Knoxville, Tennessee, creates biodegradable natural latex rubber gloves that create 70 percent extra surface space for kayakers, divers and other aquatic enthusiasts.

RAMP Sports of Park City, Utah, excels at skiing and snowboarding, skateboarding and paddleboarding. Art, music and baseball fans should check out RAMP's American-made gear. Its artistic spirit is felt throughout its headquarters and designs.

Many snowshoes are produced in parts of the world that never see snow. Redfeather Snowshoes wants you to know its products are made where snow falls regularly (La Crosse, Wisconsin) by people who know snow firsthand. Redfeather is owned by ORC Industries, a nonprofit whose sole mission is to provide job opportunities for people with disabilities, so 75 percent of Redfeather employees have a physical or mental disability.

 

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Soaring Ground Beef Prices Leave McDonald's in a Pickle

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DEU MCDONALDS BILANZ
Diether Endlicher/AP
It may have been burger-flipping rival Wendy's (WEN) that popularized the "Where's the beef?" slogan a couple of decades ago, but don't be surprised if McDonald's (MCD) is asking the same question these days. Ground beef prices are on the rise, and that's devastating news for the world's largest burger chain.

The price of ground beef has risen nearly 23 percent over the past year, according to the latest data out of the Bureau of Labor Statistics. It cost a record $4.154 for a pound of 100 percent ground beef in October, up sharply from the $3.389 a pound that it was fetching a year earlier. The cost has nearly doubled over the past five years.

Most chains would respond to spiraling input costs with corresponding menu increases or by promoting other proteins, but McDonald's isn't as fortunate. Given the popularity of its Dollar Menu and its burger specialty, it doesn't have the kind of pricing elasticity that other restaurateurs may have. After decades of being known for its cheap burgers, it's hard to push patrons into new categories. That's bad news for McDonald's, and it's even more bad news for its franchisees.

The Golden Arch-less

Chipotle Mexican Grill (CMG) -- the popular burrito-roller that at one time was majority-owned by McDonald's -- pushed through a price increase earlier this year. Food costs were going up, so the cult fave decided to roll out its first substantial menu-price increase in more than three years. Consumers didn't flinch. Chipotle's comparable-restaurant sales have posted accelerating double-digit percentage gains every quarter this year.

McDonald's isn't as fortunate. It's been suffering through a rough patch in which monthly comps have posted year-over-year declines in 11 of the past 12 months. Store-level performance has been choppy for two years, and one reason given by the company itself is that customers feel that it has strayed from the value message that served it well for generations. Something as simple as renaming its iconic Dollar Menu -- changing it to "Dollar Menu & More" to offer items for prices just north of the buck mark -- has alienated some customers.

The chain's signature Quarter Pounder was never on that menu. With a pound of ground beef fetching more than $4, the burger would be a loss leader on meat alone. However, it's hard to stick to the smaller $1 burgers when beef prices keep rising.

Hold the Lettuce

Some chains can offset the sting of one item. If bacon prices move higher, they simply stop promoting burger toppings. Subway can use monthly promotions to push sandwich deals featuring the right ingredients. Even a cheapskate-magnet like Taco Bell can offset the spike in ground beef by pushing new chicken and steak offerings.

McDonald's can't do that. It has certainly been successful in pushing salads alongside chicken wraps and sandwiches, but it flopped when it tried to enter the chicken wings market last year. Even the pork-based McRib has been relegated to a regional seasonal rollout.

Customers associate McDonald's with burgers, and cheap burgers at that.

Things won't get any easier for McDonald's and its beefy crisis. Forecasts are calling for another 10 percent increase in the cost of ground beef next year. Unless it can succeed in pushing its higher-priced gourmet burger offerings, it's going to be another rough year for the chain and its franchisees, which will already be dealing with escalating labor costs in 2015.

McDonald's may want to bring back the "You deserve a break today" tagline. It could certainly use one itself these days.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill and McDonald's. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. For a list of high-yielding dividend stocks to complement your portfolio, check out our free report.

 

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6 Money Lessons Your Kids Want You to Know

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Dear Mom and Dad:

We know there's a ton of advice out there on financial lessons you should be teaching us. And we're glad you're reading it. Raising us can't be easy, and it's so cool that you want to help us have a happy and healthy relationship with money.

But there are a few things we'd like to teach you -- things you may not even realize you should be thinking about, or things we really need -- even though we sometimes don't act like we do.

Here they are:

1. We're Smarter Than You Think We Are

We may be young -- like, 6 and under -- but we can still understand money basics, and you'll be helping us out a lot if you start teaching us now.

Even the youngest of us can learn things like how to save our money, how to budget our money for different things, how to tell needs from wants, and how to make spending decisions.

Don't underestimate us. Just keep it simple and start slow, and you may be surprised how fast we pick things up. These are lessons we can take with us our whole lives.

2. We Need to Make Mistakes

Sometimes, we're gonna goof up. We'll blow all our birthday money on candy or use our allowance up before the month is over, then complain that we don't have any money to go out with our friends.

We're not going to like making these mistakes any more than you'll like watching us make them, but you need to let us have these experiences. It's the only way we'll learn how to make the right decisions. And we're better off making little mistakes now, and learning from them, than making big mistakes down the road when we have a lot more money to deal with.

3. Don't Listen to Our Pleading (and Whining and Cajoling)

We will probably whine and beg for things -- a lot. We'll call you mean for not giving us these things or tell you why Jake's parents are way cooler because they give him all the things he wants.

We'll get sad. We'll get mad. We'll probably also get really annoying sometimes, and you'll want to give us something just to make us stop.

But please don't give in.

The thing is, we're kids. We don't understand long-term goals and opportunity costs the way you do. We don't realize you need to put money aside for our college funds; all we know is every other kid in our class has been to Disney (DIS) World and we haven't yet. But please teach us that sometimes we need to not get what we want now, so that we can get something even better later on.

We may not get it just yet, but we will, and it will stick with us.

4. Please Teach Us How to Budget

Stop telling us "money doesn't grow on trees." That doesn't make any sense, and it won't help us manage our money when we get older and have a lot more of it.

Instead, show us how to budget our money for different things -- savings, spending money, etc. Don't give us a piggy bank and let us do whatever we want with it; sit down with us whenever we get some birthday money or an allowance and help us work out how we want to spend that money.

A scary amount of grownups don't even know how to budget, and it gets them in all sorts of trouble. We don't want to end up like that.

5. We Can Handle More Than You Think

When you're having money trouble, we can sense that something's up. (Remember how smart we really are?) You don't need to tell us everything, but you should give us a brief explanation so we don't imagine all sorts of awful reasons for why you're so stressed out.

If you let us know things are tight right now because Dad lost his job, or you spent too much on credit cards, we'll be able to understand why you tell us we can't go on vacation this year or we can't afford a big Christmas. Keep us in the loop at least a little bit, because we can tell when you're hiding something from us, and it freaks us out.

We may even be able to learn from what you're going through -- if we see how worried credit card debt makes you, you'd better believe we'll be careful not to incur it ourselves when we're older.

6. We Learn From You

You can say all sorts of things, but we pay the most attention to what you do.

If you're smart with your money and you show us what it looks like to be frugal, patient and disciplined, we'll pick up good habits of our own. If you're an impulse purchaser or you act like money does grow on trees, we'll think it's OK to act that way.

We follow your lead, so please set us a good example.

Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 30 countries, owns six rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for revolutionaries who understand that they can afford anything -- just not everything. Visit Afford Anything to learn how to shatter limits and live life on your own terms.

 

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Ho-ho-Horrendous! The Hidden Costs of the Holidays

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By Geoff Williams

Every January, it happens to many shoppers: You look at your bank or credit card statement and feel as if you've awakened to a financial hangover. You figure you must have blanked out for most of December, because there's no way you would have spent so much if you had been thinking clearly. In fact, you are pretty sure you set aside a certain amount of money for gifts. So what happened?

The holidays happened, that's what. It turns out, you probably aren't just spending money on gifts. Actually, gifts may be the least of your worries.

According to the National Retail Federation's Holiday Consumer Spending Survey, which polled 7,547 consumers in October, Americans will spend an average of $459.87 on gifts for their family this year. But there are a lot of hidden costs related to the holidays that you may be neglecting to factor into your monthly spending. If you want to avoid another crushing January hangover, here are some hidden costs to consider paring down.

Decorations

A Sears (SHLD) and Kmart survey of 1,000 adults in November indicated that 34 percent of Americans plan on spending $100 or more this year on holiday decorations. Even if you don't spend that much, you're probably going to buy something: According to the survey, 82 percent of Americans plan to buy new decorations.

Wrapping Paper

According to research from Hallmark, Americans spend approximately $3.2 billion a year on wrapping paper. That presumably includes gift bags, which, according to Hallmark, are the No. 1 way consumers wrap gifts. In any case, the more gifts you buy, the more wrapping paper -- or gift bags -- you'll likely use. Budget accordingly.

Food

According to the NRF survey, Americans will spend an average of $104.74 on holiday-related food, which could include everything from going out to restaurants with the family to buying a bottle of wine for a party. And, of course, this is just the average -- you may end up spending far more.

Self-Gifting

The federation survey indicates that this year, 57 percent of consumers will buy gifts for that really special someone in their lives: themselves. Yes, odds are likely that you will buy a gift for yourself as you sift through the sales and shop for your loved ones. Nothing wrong with that, of course, but have you budgeted for it? According to the federation, if you self-gift this year, you'll spend an average of $126.68. Hopefully you'll get yourself something good.

Gift Cards

You might be thinking the only gift cards you'll purchase will be factored into your gift budget, so no need to discuss these, but you should still take a special look at gift cards and how often you buy them.

You probably purchase a lot of gift cards. According to a gift card survey NRF conducted in November, polling 6,593 consumers, gift cards are the most-requested item on holiday wish lists for the eighth year in a row; Just over 60 percent of consumers surveyed said their most-preferred present is a gift card, and the average shopper will spend $172.74 on gift cards this year, according to the NRF.

Keep in mind that every time you buy a gift card for someone, you rob yourself of the chance to buy a thoughtful gift for a family member, friend or co-worker -- and one you just might find on the clearance rack. You might have bought a $7 shirt for a nephew instead of giving him a $25 gift card to his favorite store. Sure, your nephew is worth it, but if you're budgeting $200 for gift cards, you've locked yourself into that price -- unless you purchase the gift card through a discount exchange like GiftCardRescue.com or MonsterGiftCard.com.

 

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12 Ways to Save on Last-Minute Holiday Travel

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Saving on Holiday Travel

By Maryalene LaPonsie

If going home for the holidays -- or escaping from home -- is a part of your December plan, you may think it's too late to score a deal. After all, aren't we always told to book in advance for the best prices? While it can be easier to find deals if you have more time, there are plenty of ways to save money on last-minute holiday travel.

1. Cash in Frequent-Flier Miles

Hopefully you have a credit card or belong to a loyalty program that lets you rack up rewards to be used on travel. Put those frequent-flier miles to use when it comes time to buy your airfare.

Another option may be to use the miles to upgrade your travel accommodations from economy to first class. Treat yourself and travel in style. You'll still be paying full price for the economy ticket, but it may make for a more enjoyable holiday. Plus, some airlines check luggage for free for first-class fliers.

If you don't have any frequent-flier miles, play the credit card rewards game and get ready for next year.

2. Sign Up for Fare Alerts

Rather than checking the travel sites compulsively, let them email you when fares drop. You can sign up for fare alerts on a variety of sites, including these: 3. Travel on Christmas Day

Is it ideal? Probably not. Is it cheaper? Probably is. If you didn't book early enough, you can try finding a flight on Christmas Day when fewer people are traveling. Fewer people on the planes may mean more money in your pocket as a result of lower fares.

4. Fly Out of an Alternate Airport

Flights out of major hubs will almost always command higher prices than those out of regional airports. See if you can save by driving to the smaller airport an hour away.

5. Be Willing to Be Bumped

Build enough flexibility into your schedule that you can accept an offer to be bumped from a flight. Doing so might not save you any money on your current trip, but you could walk away with a voucher worth hundreds off your next flight.

6. Check With a Travel Agent

With so many DIY options available, a travel agent might seem like a waste of money. However, an experienced agent may be able to steer you around any potential travel money pits. Even if they don't save you dollars, a travel agent could save you time and, as we all know, time is money.

7. Consider Buses and Trains

Trains may not be the cheapest form of transportation, but that doesn't mean you shouldn't bother checking to see what's available.

Another often overlooked form of travel is a bus. Today's discount lines offer affordable rates and even perks such as Wi-Fi and reserved seating. Here are a couple of notable bus services that have emerged in recent years: 8. Ask for a Discount at the Hotel

When you're at home making your travel plans, call the hotel front desk (not the toll-free number) and ask for the cheapest nonrefundable room they have available. Then, upon check-in, ask if any discounted rooms are available that day.

No? See if the hotel is offering any complimentary upgrades for holiday travelers. The answer to that might be no, too, but it certainly doesn't hurt to ask. Just remember to smile and be kind rather than demanding or whiny.

9. Rent a Car Away From the Airport

Rental car desks based at the airport typically charge a premium. Look for an off-site provider in advance of your trip. Some companies will be happy to deliver the car to the airport for you. Then you get the convenience of an airport rental without the cost.

10. Get a Rental to Replace Your Gas Guzzler

If you normally drive a big SUV or truck, crunch the numbers before taking it on a long road trip. It might be cheaper to rent a fuel-efficient car rather than fill up your gas hog.

11. Pull Out Your Coupon Book

Speaking of rental cars, most Entertainment Books and similar discount publications include coupons for rental cars. In some cases, you may save money. Other times, you may get a free upgrade.

12. Check for Membership Benefits

Finally, if you belong to an organization such as AARP or AAA, you may be eligible for members-only pricing on travel and accommodations. Warehouse clubs such as Costco also offer exclusive travel perks to members.

 

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Australia Drops Plan to Require Co-Pays to See a Doctor

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By Matt Siegel

SYDNEY -- Prime Minister Tony Abbott on Tuesday abandoned a plan to radically reshape Australia's universal health-care system by charging patients a fee to see their doctor, a major back flip for his struggling conservative government.

The A$7 ($6) co-payment, which had been included in an unpopular May budget, was heavily criticized by the opposition and many in the healthcare sphere as a sign that Australia was moving toward a U.S. health-care model. The policy reversal is the latest in a string for Abbott, whose Liberal-National coalition government has hit record low approval ratings.

Instead the government will cut the rebate it pays to doctors, he said, encouraging them to charge adults a A$5 fee at their discretion while children, the elderly and those on state allowances would be exempt. The government said that the changes would save A$3.5 billion over four years -- A$100 million less than originally proposed in the budget.

More Problems

Abbott is nearing the end of his first full year in office hobbled by missteps and a souring economy. Faced with a collapse in prices for commodities, produced by Australia, and an unruly upper house Senate that has held Abbott's first budget hostage since May, voters have abandoned his conservative government more quickly than any other in three decades.

Australia, by far the world's biggest exporter of iron ore and coal, has been battered by a worldwide fall in commodity prices. Iron prices have plunged 44 percent so far this year to under $76 a ton. Abbott warned about ballooning deficits when he released a budget packed with deregulation moves, new levies and spending cuts, but the public has never accepted his plan.

Last week Education Minister Christopher Pyne shelved for the year the government's plan to deregulate university fees after failing to garner enough votes to push it through parliament.

On Sunday, Abbott succumbed to pressure and radically pared back his signature landmark paid parental leave scheme, which had upset big business and many in his own party.

 

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5 Ways Your Home Can Help Fund Retirement

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Senior Adult Couple Gazing Over Small Model Home on Counter
Getty ImagesRelocating to a less expensive home can improve your retirement finances.
By Emily Brandon

Your home can be used to give your retirement savings a quick and significant boost. But each of these ways of tapping your home equity also comes with potential pitfalls. Here's how your home can help you to pay for retirement.

Pay off your mortgage. Owing a home mortgage-free eliminates one of your biggest monthly bills. While you will still have to pay taxes, insurance and maintenance costs, people who pay off their homes by retirement no longer need to make mortgage payments or pay rent. Paying off your home makes it much easier to live on a limited budget.

Downsize. Selling your home and moving into a less expensive house can help you to add a significant amount to your retirement savings and cut your monthly expenses at the same time. For example, if you downsize from a house worth $250,000 to a $150,000 house, you are likely to add about $75,000 to your retirement savings, assuming you pay $25,000 in selling and moving costs, according to calculations by the Center for Retirement Research at Boston College. You're also likely to cut your taxes, insurance, upkeep and utility bills from $8,125 at the more expensive house to $4,875 after you downsize, CRR found. If you spend 4 percent of the $75,000 each year you will increase your annual retirement income by $3,000 and the smaller maintenance bills give you another $3,250. So, downsizing, in this case, would result in $6,250 in extra income per year.

Relocate. Many workers aim to live near their jobs, and parents often strive to live in good school districts, but retirees no longer need these types of amenities. Now you are free to pick a place to live that offers the entertainment options, medical care and affordable transportation that will help you during your retirement years. You might want to pick a place that has better weather or the scenery of your choice or decide to relocate near family members. If you live in a high-cost city, you can often significantly improve your retirement budget by moving to a place with more modest housing prices.

Tap home equity. A reverse mortgage allows retirees ages 62 and older to use their home equity to pay for retirement needs while remaining in their home for the rest of their lives. The loan only needs to be repaid if you move, sell the home or die. A reverse mortgage can be received as a line of credit, lump sum or monthly payments for life or a set period of time. But reverse mortgages can be expensive. CRR estimates that a reverse mortgage taken out on a house worth $250,000 will result in $8,250 worth of fees, including an origination fee, service fee, mortgage insurance and ordinary mortgage fees. And you can't leave the home to heirs unless they pay back the loan.

Become a renter. If you sell your home and become a renter you can use your home equity to pad your retirement savings. Renters can call the landlord to take care of emergency repairs and some home maintenance chores, and typically don't have to worry about cutting the grass or shoveling snow. Becoming a renter might also allow you to live in a more walkable neighborhood near stores and recreational opportunities. The biggest downsides of renting are the possibility of having your rent increased while on a fixed income or being asked to move out.

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

 

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