Economic recovery faces serious hurdles

As the U.S. economy rounds the midyear turn, most economists believe that growth will resume as early as the current quarter. They are trying not to let you see that they are saying this with their fingers crossed.

Several months ago, it looked as though the economy was in the process of bottoming out. A number of statistics had begun to point up, not the least of which was the stock market, considered by many to be a venerable leading indicator.

From the middle of March until the middle of June, stocks went on a tear, rising more than 30% -- the biggest jump in such a short period of time since the 1930s.

It is an open question why stocks rose as much as they did -- especially since they have gone nowhere over the past few weeks. Some believe that stocks fell too far, while others think the market was anticipating a turn in corporate profits as early as the third quarter.

Whatever the case, it should be pointed out that even with this big run-up, stocks, as measured by the Dow Jones Industrial Average, are still below their levels at the turn of this year -- much less a year ago, when the Dow was just below 12,000, and 21 months ago, when the Dow peaked at 14,165.

This has a direct bearing on the economic outlook and whether the market's expectations will come to fruition. Stocks at today's levels represent a tremendous loss in investors' net worth. This alone has been enough to put the kibosh on consumer spending, which represents 70% of the gross domestic product.

Another depressant holding back the urge to splurge is the drop in residential real-estate values. For many, a home is their biggest asset, and lower prices alone are enough to cause people to pull in their horns. Add in their inability to pull money out in the form of a home-equity loan, and the prospects for spending gains become even dimmer.

To add insult to injury, the price of oil and gasoline has been on the rise since the beginning of this year. Although well below levels a year ago, when prices peaked at more than $4.00 a gallon nationwide, gasoline still costs about 60% more today than it did six months ago, making it difficult for many households to buy other goods and services.

Spending is also being constrained by a decision on the part of many households to rebuild their depleted bank accounts. The savings rate has gone from zero to a 15-year high of nearly 6% -- and they are earning very little on their savings, due to today's record low interest rates.

On top of this, falling employment and rising unemployment are also exerting a drag on consumer spending. And if the past two recoveries are any guide, it could take a year or more after the economy turns before employers will resume hiring.

As for Washington's stimulus package, very little has hit the economy so far -- as I first pointed out in my column of May 26 and reiterated last week. Indeed, when you factor in cutbacks at the state and local level, you could almost say that fiscal policy has actually tightened over the past year.

Even the turnaround in business productivity is nothing to cheer about. What good is it to be more efficient if you don't have many customers coming through the door

8 Tax Strategies to Consider in 2010

With minimal effort, you can still have a huge impact on your 2009 tax return by decreasing your realized income. If any of these strategies appeal to you, speak with a tax adviser, pronto.

Strategy #1: Fund your Retirement:

You may still be able to add more contributions for your 401k in 2009.

Additionally, you will be able to make tax deductible contributions to a traditional IRA up until the 2009 tax filing deadline (April 15, 2010) for the 2009 tax year. The IRS maximum allowed 401k limit is $16,500 in both 2009 and 2010. For those 50 and over, the catch-up contribution brings you up to $22,000 both years. For IRA’s, the limit is set at $5,000, while the catch-up is $1,000 for both years. Check with your employer ASAP to see if it’s not too late to kick up your contributions.

Strategy #2: Hold Off on the Roth IRA Conversion:

Owners of traditional IRAs can convert all or a part of their accounts to a Roth IRA if their 2009 modified adjusted gross income is under $100,000.

Any amount converted is taxable income, but is thereafter eligible for the potential tax-free distribution rules of Roth IRA’s. The big news is that starting in 2010, the $100,000 income threshold is removed – anyone can do a conversion. For 2010 only, you also have the option to spread the income from conversion over the following two years (2011 and 2012). Many have been waiting for this opportunity.

Strategy #3: Sell Losing Investments (and Big Winners):

The S&P 500 index went from the low 900’s to a low of 666 (funny number,right?) in March, back up to a 2009 high of 1,119. That’s one heck of a volatile year. All in all, the market is up over 22% for the year. Depending on when you’ve bought and sold, you might want to consider unloading big winners to offset your losers, or big losers to offset your winners. First, you must subtract your losses from any capital gains you’ve made. Next, additional losses can offset up to $3,000 of your 2009 ordinary income. Have larger net losses than $3,000? Losses above and beyond what you used to offset your capital gains and ordinary income can be carried over into future tax years. Before implementing investment loss strategy by selling mutual funds, make sure that you won’t incur any penalty for holding shares for too short of a period of time.

Strategy #4: Capital Gains Tax Cuts:

Under the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005, US taxpayers in the two lowest tax brackets (10% and 15%) will pay no capital gains taxes on long-term investments sold in 2009 and 2010.
Long-term capital gains result from profit made via appreciation of a security (stock, fund, etc.) held for more than one year.


Strategy #5: When you Donate to a 501(c)(3), Everyone Wins:

Tax deductions for charitable donations can be claimed for the year in which the donation is made. Perhaps it’s time to rummage through your house to find valuables you no longer need or want that others can gain value from. You may obtain fair market value on these items. Or, simply open your checkbook or donate cash. Donations of $250 or more must come with a written receipt or letter from the 501(c)(3). When submitting your donation, ask for and keep all of the appropriate documentation and receipts associated with all donations so that you are safe in the event of a possible future tax audit. If you are donating goods, document a description of everything given.

Strategy #6: Prepay your January, 2010 Mortgage:

If you’re a homeowner, you may want to consider making your January mortgage payment in December, which will give you one more month of interest to deduct from your 2009 taxes. Check with your mortgage provider to see if an early payment is possible. It may be a great way to offset extra income windfalls in 2009.

Strategy #7: Get Healthy on your Medical Bills:

If you have have large and predictable medical and/or dental bills that need to be paid, consider making all the payments before the year is over. The IRS allows families to itemize and deduct medical and dental expenses that exceed 7.5% of their adjusted gross income, so if you’re close to going over that percentage it may be wise to pay the bills to be able to make the deduction.

It won’t affect your 2009 taxes (since it was already deducted), but don’t forget to use up the rest of your 2009 FSA funds if you are in danger of losing them in the new year.

Strategy #8: Prepare for 2010:

Using Mint.com to classify all of your deductible expenses in 2010, can allow you to tag anything as tax related. Download your transactions to a spreadsheet and send it to your accountant. If you’re doing your own taxes, this info will give you a big head start in using online tax software, such as TurboTax, which offers federal filing free. If you expect that you’re due a hefty refund, file asap, so that you can get back your return and re-invest it. Also, speak with your employer about your withholding taxes if you have found that you owe too much taxes or are getting a large refund.

Why should Fed raise the rate now ?

On October 9, 2009, the Financial Times reported that the Fed was testing a key tool for draining liquidity from the financial system. Ten days later, the Fed confirmed that it had in fact been conducting reverse repos, but the tests were not an indication of a change in monetary policy.

That same day, a Barron's cover article appeared, sharply suggesting Fed chairman Ben Bernanke should already be raising rates and removing liquidity. The article cited that gold, oil and other commodities, as well as the stock market were are already rising, and that the dollar was falling. These are all signs of excess money in the system.

Clearly Fed is aware that it will need to remove the excess liquidity and raise rates in the future. But at this point, it's not exactly sure, or it isn't saying, when that will be, and it's staying the course despite the calls to do otherwise. This is the smart strategy, and here's why.

A Difficult Balancing Act
The mandate of the Federal Reserve is simple to understand, but complicated to accomplish. It desires stable prices and low unemployment, a difficult balancing act to say the least. The most important thing is stable prices, hopefully rising slowly at around 3% per year. This allows growth without excess inflation. Also, it is more important to fight inflation than high unemployment as inflation hurts everyone. Unemployment, even at today's high levels, impacts far fewer people. So first things first, stable prices, then low unemployment.

When inflation is low and unemployment is high, the focus is on increasing economic activity and reducing unemployment. This is the situation today. So, while the signs of potential inflation are taking shape, higher stock market and commodity prices along with a lower dollar, prices of goods and services haven't been rising very much, if any. Until this changes, it's likely the Fed will stay the course and not raise rates.

Differing Goals
The goals of the pundits can differ from this. They can call for a stronger dollar - making that their primary goal. The problem with that is the moves to increase the value of the dollar would likely slow the economy and increase unemployment. So it would be at odds with the Fed's goals. Other pundits may desire leaving the excess liquidity in the system to push the market rally even further. Again, that isn't the Fed's goal. The Fed decision making doesn't stray too far from its mandate of stable prices and high employment. To do so would risk not accomplishing one, or possible both, of those primary objectives. While others may suggest policy shifts to push their goals, it's unlikely the Fed will listen.

Another major difference in the Fed and the pundits is that the Fed typically needs to see evidence that something is happening before it acts. The pundits espouse a future that may or may not come to fruition. It's the difference between thinking we are going to have inflation, and actually having it. This lag can drive those that were correct crazy, but it's the only sensible course of action. The alternative would be to have the Fed try to anticipate economic activity before it occurs and act to offset it. The Fed correctly leaves the reading of the tea leaves to the tradder and pundits and acts based on evidence, not projections.

Careful Planning
Also, the Fed is keenly aware of the importance of the message it sends to the markets. It's crucial that confidence in its leadership be maintained and that it doesn't send mixed messages. A confused market creates panic. Typically, interest rate moves by the Fed have been in small, steady increments, and changes in direction were clearly telegraphed so as not to shock the markets. However, on the rare occasion when the Fed wants to get the market's attention, it has moved interest rates between meetings and in larger increments. That's very unlikely here.

Most firms don't hire people until demand for their products and a service exists, so employment is typically a lagging indicator of economic activity. In other words, firms need to sell more products and services before they hire more people. And, of course,selling more products and services can be inflationary. Therefore, the most likely course from here is that inflation will increase before unemployment totally subsides.

Future Fed Moves
Though the Fed is staying put right now, it's very likely that it will be raising rates and reducing liquidity before strong employment returns. But it won't take this action because of an article in a paper, or a pundit on television. It will need to see evidence of prices rising before it raises interest rate. But once the Fed does see that evidence, the pieces are being put in place already, and it will act.

Top 2010 Job-Hunting Tips

Hunting for a job is like selling a product, except that YOU are the product. When a product doesn't sell, the main reason is that there isn't any demand for it, or the demand is elsewhere. If you are hunting for a job, then either change the demand for the product or look for demand elsewhere. Simply put, you can't sell a product that no one wants.

Change What You're Selling
If your dream job or your career of choice isn't hiring and you need a job, then change what you are selling to what people are buying. It's easy to slip into the mindset that you are looking for a specific job. Of course, start with your passion. But if there isn't any demand for it, wishing for demand won't work. Also, trying to stay in a closely related area probably won't work either. You need to find where demand is hot. For example, if you want to be a movie producer and they aren't hiring, then the obvious move is start looking to be a television producer. But it's highly likely that they aren't hiring either.

Change the focus entirely by looking for demand for a related job instead. If your offer was to sell your services as a movie producer, and there are no takers, then change your offer to sell your services as a project manager or an administrative assistant.

Then, once you have that, build the contacts and resume to get that dream job when there is an opening. Some might think of this as the strategy used by those that want to become paid actors, and so they take jobs waiting tables or tending bar. That's basically it, except the odds on you getting a job in your career of choice are substantially higher than the odds on an aspiring actor becoming the next Robert De Niro.

Hot Jobs for 2010
In 2010 things are going to be changing. Potentially hot areas would include the following:

• Medical Records – The healthcare legislation notwithstanding, more hospitals are going digital and they will need help. And if legislation provides funds, it could boom.
  
  
• Compliance or Regulatory Director – New rules for firms are making things more complex and that means they need to hire people that can learn, understand and apply them.
  
  
• Census – The 2010 census won't be long-term employment, but they will be hiring hundreds of thousands of workers. It won't be your dream job, but the paychecks won't bounce.
  
  
• Sales Reps – As the economy crashed and sales fell, sales reps were easily let go. But many companies won't be able to increase sales when demand picks up if they don't hire more sales reps. The pay may not be as good as it was if you were in the business at the peak, but someone has to take the order or there is no business.
  
  
• Teach – While full-time tenure track positions require an act of Congress, part time adjunct positions are available. It's not great money, but it's money. Also, look for training, instructor, and other related positions as they will still be in demand as level of employment won't increase overnight. (Once you get a call back, there's still more work to be done.

Geographic Change
The recession has hit inconsistently across the country. This means localized economic strife. There are many areas in the world that are doing better than the U.S. If demand for your product isn't strong in the area your selling it, then you need to find another area. In other words, you need to fish where the fish are. Of course, this usually means you will have to move and that can be hard for some people. If so, then go back to the previous suggestion and change what you are offering.

To find demand elsewhere, obviously start with online job searches that have geographic information. Many of you are probably doing this already. But go beyond that and try to find out where opportunities are hottest. Where are all the jobs in your line of work? Then learn about that area. Who's the big player? Who's the best fit for you? Who can you contact to give you the inside scoop? The more information you have the better. If there isn't a hot area, then go back to changing the product, and use that information to go beyond the job boards. Get on the phone, network, use social media, and even go and knock on doors.

Bottom Line
Markets are about supply and demand. If there is no demand, supply isn't going to sell. To find a job or close the sale, you need to sell the customer what they want to buy at a price they are willing to pay. Think about it from the opposite side of the table. Who hires people they don't need? Nobody. So if you want a job, find a need and fill it. (For more tips on job hunting,

Most amazing facts.

01 —MOPED is the short term for 'Motorized Pedaling'.

02. —POP MUSIC is 'Popular Music' shortened.

03. —BUS is the short term for 'Omnibus' that means everybody.

04. —FORTNIGHT comes from 'Fourteen Nights' (Two Weeks).

05. —DRAWING ROOM was actually a 'withdrawing room' where people withdrew after Dinner. Later the prefix 'with' was dropped..

06. —NEWS refers to information from Four directions N, E, W and S..

07. —AG-MARK, which some products bear, stems from 'Agricultural Marketing'.

08. —JOURNAL is a diary that tells about 'Journey for a day' during each Day's business.

09. —QUEUE comes from 'Queen's Quest'. Long back a long row of people as waiting to see the Queen. Someone made the comment Queen's Quest..

10. —TIPS come from 'To Insure Prompt Service'. In olden days to get Prompt service from servants in an inn, travelers used to drop coins in a Box on which was written 'To Insure Prompt Service'. This gave rise to the custom of Tips.

11. —JEEP is a vehicle with unique Gear system. It was invented during World War II (1939-1945). It was named 'General Purpose Vehicle (GP)'.GP was changed into JEEP later.

12. —Coca-Cola was originally green.

13. —The most common name in the world is Mohammed..

14. —The name of all the continents end with the same letter that they start with.

15. —The strongest muscle in the body is the tongue.

16. —TYPEWRITER is the longest word that can be made using the letters only on one row ! of the keyboard.

17. —Women blink nearly twice as much as men!!

18. —You can't kill yourself by holding your breath.

19. —It is impossible to lick your elbow.

20. —People say "Bless you" when you sneeze because when you sneeze, your heart stops for a millisecond.

21. —It is physically impossible for pigs to look up into the sky.

22. —The "sixth sick sheik's sixth sheep's sick" is said to be the toughest tongue twister in the English language. If you sneeze too hard, you can fracture a rib. If you try to suppress a sneeze, you can rupture a blood vessel in your head or neck and die.

23. —Each king in a deck of playing cards represents a great king from history.

—Spades - King David

—Clubs - Alexander the Great,

—Hearts – Charlemagne

—Diamonds - Julius Caesar.

24. —Horse Statue in a Park…

—If a statue of a person in the park on a horse has both front legs in the air, the person died in battle.

—If the horse has one front leg in the air, the person died as a result of wounds received in battle

—If the horse has all four legs on the ground, the person died of natural causes.

25. —What do bullet proof vests, fire escapes, windshield wipers and laser printers all have in common? Ans. - All invented by women.

26. —A crocodile cannot stick its tongue out.

27. —A snail can sleep for three years.

28. —All polar bears are left handed.

29. —Butterflies taste with their feet.

30. —Elephants are the only animals that can't jump.

31. —In the last 4000 years, no new animals have been domesticated.

32. —On average, people fear spiders more than they do death.

33. —Shakespeare invented the word 'assassination' and 'bump'.

34. —Stewardesses is the longest word typed with only the left hand.

35. —The ant always falls over on its right side when intoxicated.

36. —The electric chair was invented by a dentist.

37. —The human heart creates enough pressure when it pumps out to the body to squirt blood 30 feet.

38. —Rats multiply so quickly that in 18 months, two rats could have over million descendants.

39. —Wearing headphones for just an hour will increase the bacteria in your ear by 700 times.

40. —The cigarette lighter was invented before the match.

41. —Most lipstick contains fish scales.

The BEST deal for investors: Wine and Chocolate

If there are two surefire ingredients to a happy holidays, they'd have to be chocolate and cocktails. But there's another way to indulge in these treats: in your portfolio. So this year, put your money where your mouth is to enjoy appetizing returns.

Sweet Returns
The U.S. may have been in a recession in 2008, but the U.S. Department of Commerce (DOC) reported that the average U.S. consumer spent 1.1% more on candy ($92.91). The increase appears to have been caused by escalating confection ingredient prices, because the actual amount of candy purchased decreased 4% to 23.8 pounds. According to the National Confectioners Association (NCA), candy makers reaped a 35% profit margin on retail sales. The industry thrives on holiday purchases, with most sales occurring around Valentine's Day, Easter, Halloween and Christmas. What does this mean for investors? The cyclical candy sector may be a tasty portfolio treat.

The Industry
The returns may be tantalizing, but don't just grab at the first sweet opportunity; the $28 billion retail candy industry is very competitive. New and improved products keep consumers coming back, and many companies are working on offering more sugar-free and lower calorie choices. But the biggest seller is chocolate. The recent increased media hype around the health benefits of dark chocolate have given the industry a boost. According to recent research, chocolate containing 70% or more cacao is said to have high levels of antioxidants, which help fight heart disease. Now that's a sweet deal!

Merger and acquisition is a common growth strategy for the confection industry. There are more than 300 major American candy producers. Some of the biggest names are privately held, like Mars and Jelly Belly, but investors can buy shares in The Hershey Company (NYSE:HSY), which currently holds 42% of the U.S. market. The company's recent share price reflects operations struggles, but with a price-to-earnings ratio of 20 - compared to an industry average of 33 - it appears to be a good value. Earnings per share growth is actually down 11% over the last three years, and the company is currently in talks to buy European competitor Cadbury (NYSE:CBY).

American candy exports increased 20% last year, so investors who are looking to diversify may also consider European American depositary note (ADR) Nestle (OTC:NSRGY). Other companies also profit from candy sales. Discount retail giant Wal-Mart (NYSE:WMT), for example, is the leading American candy retailer, with 12.8% of the market according to NCA and DOC shipment reports.

Cheers!
What's the best beverage for washing down a fine piece of chocolate? A glass of wine, of course! In 2009, the Wine Institute reported data from Gomberg, Fredrikson & Associates, which indicates that U.S. consumption of sparkling wine or champagne bounced back to pre-recession numbers, with 8.2 million cases sold in 2008. Americans enjoyed 2.48 gallons of wine per person. Wine imports to the U.S. account for 25% of consumption, mostly from Europe, but wine is increasingly imported from Australia, New Zealand, Canada, South Africa, Argentina and Chile. U.S. wine exports are also increasing. (For background reading, see Parched For Profits? Try Beverage Stocks.)

The U.S. wine industry is highly fragmented. The Department of Commerce reported an 81% increase in the number of wineries since 1999 to about 5,000. The Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau's November Wine Report documents that more than 400 million bottles of wine were produced from January to September, 2009.

New York based Constellation Brands (NYSE:STZ) is the largest wine company in the world, with numerous domestic and international holdings which include beer, wine and spirits. Constellation Brands holds 15% of the U.S. wine market with popular wine brands like Robert Mondavi and Arbor Mist. Competition has made it increasingly difficult to make a profit. The company has been selling off brands and paying down debt.

The U.S. government carefully controls the manufacture, distribution and sale of alcoholic beverages. Ongoing regulation tweaks address concerns such as sales directly from manufacturers to consumers, internet purchases from retailers and widely differing state laws. Most wine distribution and wholesale companies are privately held, with companies like Costco (Nasdaq:COST) blurring the line between retail and wholesale. The $25 billion wine retail industry is flourishing, with new wine-tasting franchises increasing the availability of products to consumers. Retailers are also cutting out the middle man. Wal-Mart and E&J Gallo inked a deal s to offer "store-brand" bottles of wine to customers.

The Bottom Line
The wine and candy industries are complex and fluid, but worth tasting. Investors should consider the entire supply chain. When paired with a diverse portfolio, sugar and alcohol should satisfy a discriminating investor's palate.

5 Ways To Control Emotional Spending

Has shopping become America's favorite pastime? Sometimes it seems that way, with advertising popping up everywhere from billboard trucks to flat-screen TVs in city buses. Advertisers spend billions of dollars annually convincing us that products can make us feel successful, prevent us from being bored, help us attract the opposite sex, and a myriad of other things. When ads are carefully designed to manipulate our spending habits, it's no wonder so many people have become emotional spenders.

Emotional spending occurs when you buy something you don't need and, in some cases, don't even really want, as a result of feeling stressed out, bored, under-appreciated, incompetent, unhappy, or any number of other emotions. In fact, we even spend emotionally when we're happy - what did you buy yourself the last time you got a raise? There's nothing wrong with buying yourself nice things from time to time as long as you can afford them and your finances are in order, but if you're spending more than you'd like to on non-necessities or are struggling to find the cash to pay the bills or pay down your credit card debt, learning to recognize and curb your emotional spending can be an important tool. While avoiding emotional spending completely is probably not a realistic goal for most people, there are some steps you can take to decrease the damage it does to your wallet. (When you do have to shop, shop smart. To learn how, see Five Money-Saving Shopping Tips.)



Impulse Buys
One way to cut down on emotional spending is to avoid making impulse purchases - and that doesn't just mean you should avoid buying gum in the checkout line at the grocery store. Whenever you're at a store - whether brick-and-mortar or online - and you find yourself wanting to buy something you didn't already want before you got there, don't buy it. Make yourself wait at least 24 hours, if not longer, before making a decision about whether to buy the item. You'll often forget about the item as soon as you leave the store. If, after 24 hours, you still really want it but a nagging voice in your head is telling you that you don't need it or can't afford it, try to postpone the purchase for a week or a month so you can think more clearly about the decision. If it helps, keep a wish list of the items you've refrained from buying so that you can ask for them when your birthday comes around or pick them up when you know you can afford them. (To read more about how waiting a day or two can save you big bucks, check out Patience Pays For Consumers.)


Keep the Ad Man At Bay
Take steps to intentionally limit your exposure to advertising. The less you are aware of what's available for you to buy, the less likely you are to develop a sudden "need" for that item. Unsubscribe to the product catalogs that arrive in your mailbox and the promotional emails your favorite stores are always sending you. To further avoid internet advertising, download a program that blocks ads and prevents them from appearing on your screen.

Prevent yourself from receiving unsolicited offers for credit and insurance by providing your name, address, date of birth and social security number to Opt-Out Prescreen. If you have a device that records television shows, skipping commercials is easy. To avoid hearing ads on the radio, switch to public radio, streaming internet radio, a CD player, or an MP3 player. If your spending problem is bad enough, consider unsubscribing from magazines, which are usually full of ads.


Limit Temptation
The next step is to limit your exposure to the situations that tempt you to spend. If it's the mall, plan to visit only a couple times a year, or try shopping online instead. If online shopping is the problem, find other, non-shopping websites to occupy your time, or replace some of your internet time with another activity. If you always find yourself spending more when a particular friend or relative is around, try to schedule free or inexpensive activities with that person, like getting coffee, cooking dinner, or going for a walk.


Make Yourself Accountable
Another helpful strategy is to find ways to hold yourself accountable for your spending. The people you live with or spend the most time with can be your best defense. Tell them that you're trying to spend less, and that you want them to give you a hard time when they see you making an unnecessary purchase. Also, make a list of your financial priorities and put it in a place where you'll see it often, like the refrigerator door or the bathroom mirror, and make a second copy for your wallet, where you'll see it each time you reach for your cash. If you want to take it a step further, put small sticky notes on your credit cards to remind yourself of what you're saving up for.


Find Alternative Activities

If you frequently use shopping as a form of entertainment or as a distraction, try to identify what you're feeling when you want to buy something and choose a more constructive behavior that will help you deal with that emotion. For example, if you've had a bad day at work and want to treat yourself to something nice, call a friend or two. If you're feeling stressed out, get some exercise. If you really just have to buy something, make it something simple and inexpensive, like a book or a small bouquet of flowers - but don't do this every time, because those small purchases really do add up!

Severe Overspending

The simple steps we've discussed may not be enough to address the most extreme cases of emotional spending. For some people, shopping is much more than a pastime - it's actually an addiction called oniomania. While it may not seem like a dangerous addiction, many of the psychological characteristics of compulsive shopping are identical to those of chemical dependency.

Compulsive shoppers tend to spend more than they can afford. They get a rush of endorphins from making purchases, but that rush is often accompanied by feelings of anxiety and guilt over not being able to control the urge to shop or not knowing how the bills will get paid when the latest binge is over. The shame that results from these binges can result in a person hiding his or her purchases and straining relationships when the person feels compelled to lie about the time or money being funneled into the addiction. People with this problem may take a second job to try to accommodate their out-of-control spending habits, but until they address their impulse control problem and the underlying emotional issues that lead them to their destructive shopping sprees, no amount of money will stop the cycle. Due to the sheer number of purchases made and the shame surrounding the habit, many compulsive shoppers have loads of items that have never been used and still have their price tags attached.

If you think you or someone you know may have a shopping addiction, 4Therapy.com's compulsive shopping quiz might provide some answers. As with any other addiction, identifying the problem is the first step toward overcoming it.

Conclusion
The goal here isn't to stop buying anything fun - if we didn't occasionally buy enjoyable things with our money, it would be difficult to get up and go to work every day. However, by becoming more conscious of your shopping habits, you'll develop greater control over your finances and you'll be able to really enjoy the purchases you make without the dread and guilt of having spent too much.