Consumers loosening their holiday purse strings

Ready to shop to 'til you drop? You're not alone. A recent report predicts that consumers are slightly loosening their holiday purse strings, but the ongoing economic tumult is inspiring frugal-minded shoppers to search for a bigger bang for their buck.

While the forecast is improving, a Consumer Reports holiday shopping poll predicts that one in three American shoppers plan to spend less this holiday season, down more than 40 percent compared to 2008.

However, it doesn't mean that stores will be barren. In fact, shoppers estimated they spent an average of $811 in 2009--more than 15 percent than they had initially planned.

In other words, making a budget and sticking to it are two completely different things.

"Consumers are optimistic, but they don't necessarily believe that happy days are here again. Credit is tight, unemployment remains high, the value of their homes has dropped and many Americans are facing the prospect of higher taxes of all levels," says Tod Marks, Consumer Reports senior editor. "So while it's a bit surprising that some plan to spend somewhat more than last year, the fact is they're insisting on value, value, value."

Also, shoppers plan to pay with cold, hard cash.

According to the Consumer Reports poll, a majority of those polled say they will pay using cash for holiday gifts and about four in 10 will cut back on credit and debit card spending.

Click here for the report.

Buy store brands to save money on groceries

Looking to put your food budget on a diet?

People can save 30 percent on average if they purchase store-brand foods versus name-brand goods if they spend $100 a week on groceries, according to a recent price study by Consumer Reports.

If folks continue buying store-brand goods for 12 months, the average consumer can save $1,500 per year.

But, is the store-brand savings worth the sacrifice in quality? In a recent taste-off here, the verdict is that the generic foods are at least as good as their higher-priced competitors.

However, it depends on the product. Store-brand goods like soda, wine and soup don't measure up among those surveyed. Other popular products like ketchup, orange juice, iced tea and baked goods scored well in taste.

Bottom line? If you're looking to put your grocery budget on a diet, buy store-brand foods. Based on the taste-off, it's wise to pick and choose the type of goods you snag on the cheap. Also, most supermarkets offer money-back guarantees on their store-brand products, which gives consumers the option to shop around.

Click here for the lowdown.

Survey finds cellphone service less than stellar

A survey conducted by Consumer Reports for its January 2010 issue finds that despite "smarter phones," more flexible plans and faster wireless networks, cellphone service continues to be among the lower-rated of all the services the watchdog group evaluates.

Responses from more than 50,000 readers based in 26 U.S. cities showed that two-thirds of respondents had at least one major complaint with one in five readers citing high prices as their top concern.

"America is in love with the cellphone, but they are lukewarm about cellphone service," says Paul Reynolds, electronics editor at Consumer Reports. "They're especially concerned about its cost in these tight economic times."

The survey ranks Verizon as consumers' favorite wireless carrier, applauding the service provider for its customer service, voice connectivity and network reach. However, respondents had issue with Verizon's high cost.

On the other hand, T-Mobile ranked second in the report for its cost-efficient value but had less-than-stellar marks for messaging, web and e-mail services. Sprint and AT&T tied for the bottom slot scoring low in customer service and voice connectivity respectively.

More than one-fourth of respondents say they opted for a service provider based on the carrier for a specific phone, with Apple iPhone leading the way winning over a staggering 98 percent adding that they would buy the phone again despite the below-par ratings for its exclusive service carrier AT&T.

The survey explores the buzz surrounding prepaid phones revealing that the non-contract option is actually cheaper than traditional cellphone service billed on a monthly basis. For example, prepaid phones often costs $25 or less per month compared to $50 to $100 carrier fees for contract customers.

Out of those surveyed with prepaid phones, TracFone scored the highest in customer satisfaction with T-Mobile, Verizon and Virgin Mobile not far behind.

Looking for a cost-efficient prepaid phone? Consumer United has teamed up with TracFone's Straight Talk service which offers unlimited talk and text for only $45 a month or $30 for 1000 minutes/texts, 30 MB (about 300 pages) of mobile web access and free 411 calls.

Click here to learn more.

Heat your home for cheap this winter

Wanna save $1500 on your energy bills? Many savings can be accumulated from simple upgrades and some with no cost. We've compiled the ways you can save this winter from Consumer Reports:

Upgrade insulation
Insulation is important in order to keep the cost of heating your home down. Bob Markovich, home and yard editor of Consumer Reports writes, "According to our recent nationally representative survey, of more than 2,000 Americans, only 12 percent added or upgraded their home's insulation in the past three years and just five percent had insulated their heating and cooling duct work -- quick fixes that save you money for years to come."

So what should you do? Fix your insulation! If it's not time for new insulation, seal the cracks and duct work. This is a simple task that can save you big. Spend $500 once, and save $400 a year.

Buy a programmable thermostat

A programmable thermostat can save you 20 percent off your heating costs. This thermostat lowers the heat by five to 10 degrees during the day when no one is home.

Fix the drips in your faucet

A leaky faucet is guaranteed to cost you more money than you thought on your water bill. A Consumer Reports article states "Almost four in five states anticipate water shortages by 2013, which could lead to steeper rates and penalties for excessive water use." Stopping the leak is the easiest way to save $70 per household a year.

Buy energy-saving bulbs

Purchase a compact fluorescent bulb to save money on your electricity. Consumer Reports recommends a variety of CFLs that range in price from $6 for a four-pack to $13 for a two-pack. Each life of a CFL bulb will save you $56. Again, a CFL bulb is worth the investment.

Layaway makes a comeback for the holidays

Low on cash this holiday season? Layaway, a way to purchase an item without shelling out the entire cost at once, is back in style.

Americans are still struggling with last year's Christmas credit card debt... a whopping 13.5 million consumers according to a recent holiday poll by ConsumerReports.org. Combating that debt is making layaway look pretty attractive this year.

So what is layaway and how does it work?

When you bring your item to the layaway department, you put a deposit down on the item, and a service fee to the department for holding your item for you. The good news? Layaway isn't a credit card... so there are no interest payments. You get to keep the item once it is fully paid for. With layaway, you usually put down an initial deposit between 10 and 20 percent. And you usually have between 30 and 90 days to fully purchase the item.

Let's say the item you put on layaway goes on sale shortly after. ConsumerReports.org reports that Kmart won’t make any price adjustment after seven days from the date put an item on layaway, however Sears will give customers 30 days. And before you leave, get a copy of the layaway contract in writing, just so you and the salesperson are on the same page.

Want to know more about layaway? Check out a video from the Atlanta Bargain Hunter here

Should you buy an American car?

So, the time has come to buy a car. Should you buy foreign or American?

Although we want to support our homeland and buy American, some consumers would argue that foreign cars are much more reliable and, in a few cases, more economical. Here are a few reasons for and against buying American:

For American Cars
The quality is up! The latest J.D. Power dependability study shows that Cadillac and Mercury outperformed Honda and Toyota for three-year-old vehicles.

The price is right. Detroit car makers know they need to sell more cars. This is why you will find the prices of Ford, GM, and Chrysler much lower than the prices of Honda and Toyota. Currently, the Chevy Malibu has 0% financing, and the Ford Fusion has up to $3500 in rebates.

Maybe it's time to support the home team. Buying American will help Detroit out of a slump, even if you don't support the bailout. Buying American will save jobs, help research and develop new technology here in the U.S.

Against American Cars
Consumer Reports online reliability ratings gives the top 10 spots to foreign vehicles. seven out of the 10 lowest rankings are given to domestic vehicles.

These cars are not environmentally friendly. Detroit is slacking when it comes to environmental
standards. Ford's hybrids are pricey- and still a generation behind the Honda Insight and the third generation Toyota Prius.

What does the government actually guarantee? Honored warranties and 0% financing may not be enough to send consumers running to the GM and Chrysler lot.

What do the experts say?
A SmartMoney.com article on buying American cars highlights James Brock, a marketing professor at Miami University in Oxford, Ohio. Brock says, "Very ironically, there’s never been a better time to buy, now they’re practically giving the things away.”

Save on Consumer Reports Magazine subscription

Consumer Reports Magazine has been published monthly since 1936 by the non-profit Consumer's Union, and features unbiased test results of cars, computers, appliances and other brand-name consumer products. Subscription includes the 360-page Annual Buying Guide.

Click here to subscribe to Consumer Reports Magazine through our affiliate partner, MagazineCity. A subscription is $26 per year, a 52% savings off the newstand price.

When you need help with repairs around the house, Angie's List members will help you decide which service companies to trust and which to avoid. As a Consumer United member, you qualify to save on Angie's List membership rates. Use promo code "SAVE TEN" for $10 off. Click here to learn more.

Looking for subscriptions to BusinessWeek, The Economist, Fast Company and the Harvard Business Review? Click to save on Business Magazines!

Save gas money in the morning?

Do you pump gas in the morning to save money? You may consider sleeping in.

According to a Consumer Reports article, you won't save money by pumping gas early in the morning. The advice is to pump gas in the early morning before the heat of the day causes the oil to increase in volume. The early morning gasoline will be denser, meaning you'll get more energy per gallon than later in the day. As gasoline goes from 60-75 degrees Fahrenheit, it increases in volume by 1%, while the energy content remains the same.

The facts are true, but the advice is not. Gasoline is stored underground where the temperature variation is little or none at all throughout the day. Craig Eerkes, former chairman of the Petroleum Marketers Association of America talks of an expansion of gas with a change in the day's temperature. Eerkes calls the change, "Just so, so minuscule as to be almost nonexistent." The first few gallons at the pump may be slightly warmer than the gallons to follow, due to the gas sitting in the pump dispenser which was warmed by the sun. Aside from that, the time of day will not make a difference in the weight of your wallet.

Judy Dugan, Research Director for the California advocacy group Consumer Watchdog, says, "If fuel is warm when it’s delivered to a station, it’ll still be warm when it’s sold a few hours later." So the real advice? Go to the pump whenever you would like. The gasoline temperature will not increase with the afternoon sun.