As featured in The Wall Street Journal, Money Magazine, and more!

November 2011

Consumers in the United States spent more money online in one day, this past Monday, than they spent in any other one day in history. Online browsing and shopping resulted in $1.25 billion in sales on Cyber Monday, up 22 percent from the previous one-day record, last year’s Cyber Monday. The $1.25 billion in sales on Cyber Monday reflects the fact that more people shopped online than last year, up 11 percent, and the average shopper spent more money than last Cyber Monday, an increase of 9 percent.

When Cyber Monday was invented in 2005 by, the National Retail Foundation’s e-commerce division, it was based on the theory that more people had broadband internet access in their workplaces and would wait until sitting at their desks in their offices before shopping online after the holiday weekend.

Cyberman - Cyber MondayAt the time, Cyber Monday was not an event and there was no indication that the Monday following Thanksgiving was anything special in terms of online shopping activity. Retailers, however, bought into the idea and started creating marketing campaigns that encouraged people to shop on Monday.

Consumers simply followed the deals and succumbed to the hype surrounding yet another day dedicated to shopping, created by the organization that represents retailers, who obviously stand to benefit from more consumer shopping. More consumers neglected their work in the office this year to spend time browsing and shopping online than any Cyber Monday in the past, with more than half of all shoppers spending money from work.

Cyber Monday was not even the biggest day for online shopping until last year. This new holiday is an interesting story about how you can make anything you want real with enough marketing.

I’m just starting to organize my holiday shopping list. I’ve purchased a few items already but didn’t make any extra effort to shop on Monday. How much did you spend on this year’s Cyber Monday?

Photo: comedy_nose


The Securities and Exchange Commission, an organization designed to regulate and oversee the financial industry, is charged with acting in investors’ best interests. Most of the time, however, the SEC works on behalf of the large financial companies under its purview. As a result, when consumers demand that companies be held accountable for misleading investors or playing a role in a systemic collapse of the economy, the regulators tend to look the other way. Some companies get by with a slap on the wrist, settling lawsuits with a paltry penalty.

That appeared to be the case recently when Citigroup and the SEC came to an agreement whereby the company would pay $285 million, or 7.56% of that quarter’s profit, to settle a lawsuit that charged that the company did not properly disclose the risk when selling collateralized debt obligations (CDOs) and bet against the same investments the company sold to investors. The benefits of a settlement like this would be that Citi could pay the small fine from its cash reserves without admitting wrongdoing, promise they’ll never break the rules again, and continue to operate business as usual.

Judge Jed S. Rakoff of the Federal District Court in Manhattan was not pleased with the resolution or collusion between Citi and the SEC. The judge rejected the settlement because it was not fair, reasonable, adequate, or in the best interest of the public. He demanded the company and the regulator to shed light on the facts of the case, something this settlement might have avoided, protecting the company from any real criticism. A settlement would mean that affected investors could not sue Citi, but if the SEC were to successfully win a case against Citigroup, proving the company was in the wrong, that decision could be used by harmed investors who sue the bank. At the core of the matter is whether a company should be allowed to avoid admitting guilt.

The trial will begin in July 2012.



The point of accumulating and saving money is not to die with the most money in the bank. Yes, it can be helpful to your heirs to leave a fortune for the next generation, but not at the expense of living a fulfilled life yourself. There are many opinions about what it means to live a fulfilled life, but for most people, it involves taking the time to do whatever you’d like to do without needing to be concerned about the financial consequences, or whether you’ll have enough money to buy food tomorrow.

Doing whatever you’d like to do doesn’t have to cost money, but sometimes, it does. Some people could be happy living off the land, finding their own meals, and surviving on their own without ever spending a dime. Self-sustenance is an interesting concept and I have respect for people who can manage to live their lives this way. Most of us are consumers, however, and thus earn and spend money in order to live.

You’re reading Consumerism Commentary because you’re interested in finances on a personal level, but it’s important to remember that net worth and income are not the core concepts of living life. I wouldn’t be who I am without the aspects of my life that do not involve earning income. Society could not function if the only activities its inhabitants performed were those activities that other members of society would pay them to do.

Fun SnowboardingIt’s advisable to look for deals when we shop. If we’re spending money in a store, it pays to ensure we’re getting the best price. That could involve bargain hunting, negotiating, and comparison shopping. Paying attention to price and value plays a big role in everyday and occasional spending, but the usual goal in this type of frugal philosophy is ending the day with the most cash left in your pocket. I offer a different goal: ending the day with the experiences that shape you as a human being. It’s harder to measure, but at the end of your life, you’ll likely have fewer regrets and be more satisfied with how you’ve spent your short time alive on this planet.

Let’s call those experiences that add up to a fulfilled life “fun.” They might not always be enjoyable, but you collect these experiences and you can find a method of tallying and rating them. These experiences have the most meaning to you now and in the future.

Here are some tips for spending money for fun.

1. Necessities come first.

Before you can consider partaking in an experience that doesn’t have a positive effect on your net worth, you need to clear a few hurdles. These suggestions speak to the top of Abraham Maslow’s Hierarchy of Needs. I keep coming back to this cope psychological concept, and it might annoy anyone who has studied psychology beyond an introductory-level course, but I feel it’s symbolic of how to best organize personal finance, particularly spending.

The lowest level of the pyramid represents your physiological needs, everything you need in order to survive each day, namely food, water, heat, and shelter. In most communities, basic clothing is also a physiological need. It would be very difficult to rationalize spending money on anything else before these needs are met. Granted, you could avoid some of these expenses by living off the gratuity of family and friends, but that can only last so long — particularly if they see you spending money on fun things without considering moving out.

Feeding your need for self-actualization is a luxury. Climbing the Hierarchy of Needs pyramid can be tough, and focusing on enriching your life comes after your basic needs are met.

2. Define our goals and values.

Once your household has overcome any difficulties in the way of providing the basic physiological necessities, there is an opportunity to think about the big picture. There are many people stuck here, believing their goal is to earn money. Earning money is not a goal in itself, it’s only a path that allows individuals to meet other goals. A friend asked me for financial advice, and although I’m not a financial planner or adviser, I agreed to talk to him and help him think through his issues.

I asked what his goals in life were, because knowing this would be the only way to help someone plan for the future. He said his goal was to retire with $5 million in the bank. Regardless of whether that was a reasonable number, it wasn’t a real goal. I asked him why he wanted that particular sum, and he had never thought about it before. We started to work out what he would do with that money and why it was important for him to be financially independent. You need real life goals, not money goals. With real goals, you can evaluate whether the money you spend is worthwhile, and you have a purpose for saving and investing other than a big balance on your monthly bank statements.

In addition to goals, you should be aware of what ideals are important to you. A set of values defines how you live your life, where you spend your time, and an initiative for your funds beyond the selfish but necessary act of taking care of yourself.

3. Pay off debt.

Being debt-free is the most important financial goal. When you’re in debt, you’re beholden to someone else. Often, that someone else is a company with significant means to make your life miserable if you can’t pay. There are avenues for help if you need it, like bankruptcy, but for the most part, you can’t life a fulfilled life when part of the money you earn is dedicated to someone else.

If you’re earning $3,000 per month and paying $2,000 in interest to your mortgage company and credit card issuers, your income is basically owned by entities other than you. If the remaining $1,000 covers nothing other than your necessities like room and board, you are living in indentured servitude. Some might even say that debt is slavery. You should want any income you earn to be rightfully yours.

These suggestions are not necessarily in order. You can pay off debt while still determining your long-term goals because no matter what goals you choose, being debt-free will be key. In this case, debt includes mortgages and student loans, not just credit cards. Any interest obligation is a waste of your money. You don’t have to be completely debt-free to begin considering spending money for fun (that is, life enrichment), but you should have a plan in place for doing so and for emergencies that might cause trouble along the way.

4. Save for the future.

Living a fulfilled life often means striking the right balance between saving for the future and using the money you earn today for more than just necessities. Again, that’s a luxury that’s best considered only by individuals or families who have done a good job of saving for their future already.

It may be possible to save too much money, but many will not reach the point where this is a concern. There will always be more we can save for the future, but those who are on the path to a more comfortable, debt-free life have more options for spending today without sacrificing their future.

5. Compare your spending with your values.

If measuring success with saving money, the scorecard is simple. Your net worth and net income statements provide feedback. You’ll know where you stand at any moment from a financial perspective. When collecting experiences leading to a fulfilled life, keeping track of your progress is more difficult to measure. You could look at your discretionary spending and compare it with your values. Give yourself points when your expenses match the type of person you’d like to be and give you the feeling that you’ll be satisfied when you look upon your experiences. Subtract points if your spending was frivolous, not well-considered, caused regret, or prevented you from living life in the way you’d like to.

When it comes to spending money for fun, I am a big fan of spontaneity. Being impulsive or spontaneous can be responsible or irresponsible, however. If you’re striving to fill your life with rich experiences and to never look back on your time alive with regret, you can help increase the chances of creating a life you enjoy by taking a responsible approach. Everyone should get a chance to spend their hard-earned money how they want, but that freedom comes from the ability to make a few good, important choices about how to handle finances.


From a retail perspective, this holiday weekend was successful. The National Retail Federation — an organization that represents retailers and is always happy to report good news in the industry — says that total spending over the four-day weekend from Thanksgiving to Sunday increased 16 percent over the same time period in 2010 when measured by total dollars spent. The total number of shoppers increased 6.6 percent and the average spent by each shopper increased from $365.34 to $398.62, or 9.1 percent.

Even “Small Business Saturday,” which I still see as a self-serving marketing campaign on behalf of American Express, has produced anecdotal evidence of success from mom-and-pop small business owners, while some customers have expressed frustration that some of American Express’s advertising did not clearly mention that registration in advance was necessary to receive the $25 credit.

I can’t overlook the unseasonably mild weather, at least in the New York metropolitan area, as a contribution to people’s willingness to leave the house and shop this year.

On Friday, I spent most of the day on an airplane, traveling from Los Angeles to Newark. I did not have the desire to wait outside a store in a line Thanksgiving night, the eve of Black Friday. Over the weekend, once home, I did not completely refrain from shopping. I purchased a gift for my girlfriend as we passed an item of clothing she liked, as well as a few discounted items of clothing for myself. For myself, I spent about $50 for items that normally would have cost about $100 without the “one-day-only” discount.

This past week leading up to Thanksgiving, while I was spending time with family in California, I gave into pressure and purchased myself a few toys. I grew up playing the original Nintendo Entertainment System, and Legend of Zelda was my favorite game. After the great reviews of the latest iteration in this series, a few in my family decided to take a look at the game. After getting a chance to play it, I decided I wanted to have a copy of my own. I find that I don’t have the time to spend playing video games, but I splurged on the game for myself, anyway — without paying full price.

I have more shopping to accomplish over the next few weeks before the holidays approach. I think giving into the retail frenzy during the days after Thanksgiving is generally a mistake. I’ve seen this happen in past years; the hottest items, even those deeply discounted during Black Friday, can often be found at even better prices later.

Before you consider me overly frugal, take note that I plan to spend quite a bit of money on myself in the near future as I continue exploring my hobbies and interests with full force as I find the time.

How much money did you spend this weekend?

CNN Money


Podcast 136: Becoming a Landlord

by Luke Landes

Today on the Consumerism Commentary Podcast, Tom Dziubek talks to Paula Pant, journalist, entrepreneur and founder of the personal finance website Afford Anything. Paula talks about several landlord-related topics, including what to look for when purchasing a property, how tenants see properties different than landlords and the kind of work a landlord should expect. Consumerism […]

3 comments Read the full article →

One Black Friday Tip to Rule Them All: Buy Nothing

by Luke Landes

For those in the United States, tradition and media influence have established today as a day for spending time with family, over-eating, and watching television. What could be more American than Thanksgiving Day? Fast becoming a tradition for consumers is Black Friday (and to a lesser extent Cyber Monday). Retailers have discovered a tendency to […]

19 comments Read the full article →

Boost Your Human Capital: Start Early

by Luke Landes

Your human capital is just as important as your financial capital. In fact, it wouldn’t be a stretch to consider your human capital, your potential to become financially independent over time, more important than your net worth at any one particular time. Over the past few weeks, I’ve been writing in depth about ways to […]

7 comments Read the full article →

10 Cash Back Credit Card Traps

by Luke Landes
Cash Back Credit Cards

For my own finances, I’ve been a fan of credit cards with cash back programs. Some financial experts advise avoiding best credit card deals completely, even those cards that offer rewards like cash back or offer on best gas credit cards and small business credit cards. I’ve never been a fan of this approach — […]

14 comments Read the full article →

Personal Balance Sheet, October 2011 ($373,552, +9.2%)

by Luke Landes
Net Worth Balance Sheet, October 2011

I’ve been tracking my net worth and keeping my finances updated in personal finance management software since July 2003. I’ve done this mainly for myself. Posting my finances online helps make the numbers real. I use these monthly reports to hold myself accountable. If I write publicly about spending more in a budget category than […]

15 comments Read the full article →

American Express’s Small Business Saturday

by Luke Landes
American Express

I’ve avoided writing about Black Friday this year. In the community I follow, promoting the day after Thanksgiving for shopping has gotten completely out of hand. I wrote an article for PC World a few years ago, The Insider’s Guide to Black Friday Bargains, where the tips are still relevant for today’s shoppers. I’m not […]

32 comments Read the full article →
Page 1 of 41234