How retailers get you to buy more

Spending more than you planned while shopping lately? It could be because retailers are doing more to target your senses and emotions in ways you may not notice (Chicago Tribune Aug. 15).

A consumer's best defense is to be aware of tricks and traps that entice you to indulge, according to Martin Lindstrom, author of "Buyology: Truth and Lies About Why We Buy":

• Touch. You're more likely to buy a product because you touched it. A smart book store clerk won't simply point you to the right aisle, but will retrieve a book and place it in your hands.
• Start high, end lower. A salesperson's best way to increase buyer spending considerably is to frame a decision by asking the customer to make choices. The customer is shown a full-featured product and asked which features to eliminate, rather than starting with the basic model and asking what to add. In most cases, the customer will not want to "give up" features not originally considered.
• "Sincere" flattery. Salespeople use comments that may not be sincere but sound like it. You might not believe a clerk who says, "That dress looks great on you." But if she says, "I had to tell another woman that dress didn't look good on her, but it looks great on you," the compliment sounds more sincere.
• Live models. Customers are more likely to buy clothes they see on a live model than on a mannequin, according to a new field of research called neuroeconomics. That's because neurons in the brain associated with empathy are stimulated by a human, but not by a mannequin.
• Music. Does that tune make you feel happy and relaxed while in the store? Playing music with a rhythm slower than your heartbeat helps buyers linger longer, and ultimately spend more.

One way to avoid getting sucked in by retailer tactics is to shop with a list. Retailers want consumers to linger in the store so they can persuade them to buy additional or more expensive items. If you don't have a shopping list, you're more likely to be a good target for their agenda.

Another option: Wait to buy. Shopping can raise the dopamine levels in the brain, creating a rush. Building in a 48-hour waiting period for discretionary purchases can help answer that "Do I really need it?" question.

New auto loan rates

Looking to buy a new or used car? Save money with a car loan from LifeWay Credit Union. We have car loan rates as low as 2.99%! Click here to see our full list of low auto loan rates.

Get paid to shop with Shop America!

Most people shop online these days. Why not save and get money back when you shop? LifeWay Credit Union and Invest in America want to reward you with discounts and cash back just for being loyal to your favorite stores online.

Through Shop America, members like you have access to more than 1,200 online retailers, including some of the largest and most popular, giving you major discounts when you shop. And every time you earn $10 or more in cash back from your purchases, you'll get a check as a thank you! Don't forget to make your Shop America purchases with your LifeWay Credit Union credit or debit card.

So whether you're looking to shop online with Target, Macy's, Best Buy, Apple or hundreds of other stores, you can save and get paid to shop.

Easy online access. Shop anytime. Shop America. Speak to a member representative or visit www.lovemycreditunion.org/Shop_America_585.html for details on Shop America and the other Member Rewards partner offers from Invest in America.

Teens and older adults need help with auto choices

Teenagers and senior citizens share one thing when it comes to choosing a car: They don't always make the best choices (CBSNews Aug. 4).

Teenagers may want flashy, fast cars--a parent's nightmare--but what they need are reasonably powered cars with good test results and numerous safety features.

Senior citizens have different issues but, like teenagers, they're making auto-buying decisions based on a lack of information. Many seniors aren't aware of the new brands and models that could meet their age-specific needs.

A common misunderstanding is to give a teen the biggest car possible. But big cars are more difficult to control, and teenagers are the least experienced drivers on the road. Give them a car that handles well, is agile, and has as many safety features as possible.

This usually means getting your teenager a new car, rather than handing down an old one. And it means not giving them a large SUV or pickup, which have high centers of gravity, making them more prone to roll than other vehicles, or a sports car, which can tempt drivers to go fast. Sports cars also are involved in a higher rate of accidents than other cars.

Look for a reasonably sized sedan that has safety features such as electronic stability control and curtain air bags, good crash-test results, not too much power, and a strong structure. When researching safety features, be aware that electronic stability control has different names from different manufacturers.

Earlier this year, Consumer Reports named 11 models safe for young people, based on test results as well as government and insurance-industry crash-test results.

Among the top picks:

• Three small sedans: Hyundai Elantra SE (2008 or later), Mazda3 (2007 or later), Scion xB (2008 or later)
• Three midsized sedans: Acura TSX (2004 or later), Honda Accord (2008 or later), Kia Optima (2007 or later)
• Two small SUVs: Honda CR-V (2005 or later), Nissan Rogue (2008 or later)

Mature drivers have different needs than teenagers. For example, they often need more time to process events and to react. Complicated vehicle controls can cause confusion, waste precious time, and increase the chances of an accident. Older drivers need easy in-and-out access, good visibility in all directions, a comfortable driver's seat, and easy-to-read and understand controls.

Consumer Reports recommends five new models that perform well, are reliable, and have the kinds of features suitable to the needs of an aging population. They are:

• Minivan: Honda Odyssey
• Small SUV: Subaru Forester
• Upscale sedan: Hyundai Azera
• Family sedan: Honda Accord
• Microvan: Kia Rondo

The 2010 Honda Accord is the only vehicle to make both lists. For teenagers, it has enough performance to make them happy, has standard stability control, handles easily, and is crashworthy. These features are important for older drivers as well, even if for different reasons. In addition, seniors appreciate the ease of getting in and out of the wide seats; the simple, well-marked controls; the supportive seats; and excellent driving position with impressive visibility.

Regardless of age, everyone needs a car with good safety features and crashworthiness.

Little-known discounts help college budgets

The cost of attending a four-year public college has risen sharply over the past decade. The price tag has climbed an average of 4.9% above the general rate of inflation during that time (The College Board July 2010). Add in the effects of a tough economy and the back-to-school season is financially difficult for college-bound students and their families.

Relief is available in the form of discounts and incentives. But while these sales tactics can save money on back-to-school purchases, they also can entice you to purchase items and services that you could do without.

Here are five retail categories to keep an eye on for potential savings of 5% to 25%, according to SmartMoney.com, with some suggested alternatives from CUNA's Center for Personal Finance:

• Technology. Major manufacturers and retailers hope to lure students with aggressive advertising of the latest, most powerful computers by offering steep discounts on hardware and software. Some manufacturers are extending these discounts for as long as you remain in school. But if you don't need maximum computing power for schoolwork, you probably can squeeze a few more years out of your current laptop. As for video games, hey, what are friends for?
• Cell phones. Discounts on hardware and service plans are one way cell phone companies try to hook students into contracts after graduation. Compare service plan features and fees carefully at least once a year to find the best deal. Now that you can keep your phone number when you change local providers, there's one less disincentive to switch. Just be sure you understand all the costs of local number portability, including whether you need to buy a new phone.
• Travel. Airfare and lodging discounts are common and change constantly. Monitor deals online for frequent opportunities. Include train travel, especially with the purchase of a rail pass. And don't overlook the network of youth hostels that spans the world. Hostelling membership brings eligibility for a wide array of additional travel discounts.
• Health clubs. Competition among gyms can lead to local price wars, so shop around. Be sure to ask about periodic promotional incentives that might save you even more than a student discount. But many universities give students access to gym facilities at a reasonable cost. And, if you exercise on campus, you're more likely to run into people you'll want to get to know than you will at a gym open to the general public.
• Clothing. Store sales run almost constantly these days, and brand name bargains are easy to find. But if you can't get away with a retro look based on second-hand clothes from a thrift shop while you're a student, when will you ever be cool?

Social Security takes double hit from recession retirees

The long recession has seen many late-career job losses, forcing jobless workers to take Social Security earlier than they planned (Associated Press Aug. 8).

Pair the reduced tax collections received from fewer workers with an unexpectedly high withdrawal rate, and the Social Security trust is experiencing a rare shortfall this year.

A record number of workers, 2.74 million, applied for Social Security in 2009, with a marked rise in the number of recipients receiving reduced benefits because they filed before their full retirement age. That age rose to 66 last year. The Social Security Administration indicated that 72% of men, up from 58% the year before, filed for early benefits in 2009. Similarly, 74.7% of women, up from 64.2% the previous year, filed for early benefits.

While many workers retired earlier than planned, others are working longer and postponing retirement because their retirement savings are not up to their financial needs. "But we're seeing more people taking early benefits than staying in the work force longer," Jason Fichtner, an associate commissioner of the Social Security Administration, told Associated Press.

Some late-career unemployed workers are making do with reduced Social Security benefits and unemployment benefits.

The Social Security program released its annual report last week, showing that payments will be more than revenues for 2010 and 2011 as a consequence of the deep recession. The report predicted the program will be back in the black in 2012 through 2014, with benefit payments again exceeding tax collections in 2015. From that year forward, the report projected that Social Security will pay out more than it takes in, as 78 million baby boomers begin retiring.

Still, there is no expectation that early retirees will drain Social Security funds much over time. That's because early claimants receive smaller checks; they ultimately won't receive more money than if they had waited until their full retirement age to collect Social Security benefits.

At a time when no one's job is secure, be proactive if you're still working. Credit Union National Association editors from the Center for Personal Finance made these suggestions:

• Save as much as you can; you need both liquid funds and long-term retirement funds.
• Live below your means; examine every purchase.
• Get an estimate of pension or 401(k) or 403(b) income potential; determine when you will be eligible for retirement.
• Get an estimate of your Social Security benefits from ssa.gov or call 800-772-1213.
• Determine whom you'll be providing for in retirement, and plan for long-term care for any dependents.
• Set a retirement savings goal and make a plan to reach it.

Back-to-school shopping a teachable moment

Back-to-school shopping is an annual event perfect for talking to your kids about budgeting and saving money, and the difference between needs and wants (Americans for Consumer Education and Competition Aug. 2).

If you view shopping as a headache, here's an opportunity to put some responsibility on the student and lessen your role as the baddie saying, "No, no and no." If you view shopping as fun and exciting, it's your chance to show your student how to shop responsibly.

You can use back-to-school shopping to lay the foundation for sound money management habits these ways:

• Set a realistic back-to-school budget with each child before you shop--use the ads in the Sunday paper as a guideline.
• Take a copy of your budget when shopping and let your child enter in all of the actual expenses--paper works fine for young ones; teens might prefer to enter expenses in a cell phone.
• Encourage kids to consider ways to cut costs through sales and coupons, and reward them for coming in under budget. Consider splitting the difference with them.
• Teach your children to comparison shop and to avoid impulse buying. If it's not on the list, don't get it.

The first year is the toughest, so don't give up if it doesn't go smoothly. Consider any "discussions" as a success that you've struck a nerve. You can build on this experience to begin turning over more purchasing decisions to your student as he or she matures, using entertainment and clothing budgets as an example.

Fake check scams target lawyers, consumers

Two lawyers from New Hampshire recently were targets in an elaborate fake check scheme designed to trick them into depositing a fraudulent check and then wire a portion of the funds to a third party. One lawyer fell victim and lost $240,000 in the process (UnionLeader.com July 16).

Lawyers, of course, aren't the only ones targeted. The Federal Trade Commission website says Americans report losing $1 billion each year to fake check scams.

Fake check scams come in many forms but have one identifying characteristic: Victims are asked to deposit a check and wire a portion of the amount back.

Financial institutions must make funds from deposited checks available after a few days, while identifying a phony check may take several weeks. Victims typically wire funds well before they learn the deposited check is fraudulent; victims are responsible for the amount deposited and the wired funds.

Don't worry. It's easy to protect yourself from becoming a victim once you understand what to watch out for:

• Field of schemes. Crooks use a number of scenarios via the mail and internet to trick people into becoming victims of fake check scams. Learn to recognize--and avoid--some of the most popular schemes, such as foreign or domestic lotteries and sweepstakes, family emergencies of someone you don't know, overpayment for something you sell in a classified ad or online, and work at home and mystery shopper scams.
• No need to return. There's no legitimate reason for someone to give you a check and ask you to send money anywhere in return. Never deposit a check from someone and agree to wire a portion of those funds elsewhere
• Free to claim. It's normal to pay for goods before receiving them. However, you should never have to pay to claim a prize, grants from the government or foundations, or be required to cash checks and send money back to an employer.