1) Phil's Financial Tip of the Day:
If you're only going to use something once in a while, don't pay full price when you can borrow it for a lot less.
10 Things You Should Rent Instead of Buy-From Financially Fit
It may be a buyer's market when it comes to real estate, but there are still many things you're often better off renting.
Of course, there's no substitute for ownership if you truly need an item for repeated use, but if you're only going to use something once in a while, why pay full price when you can borrow it for a lot less?
For Americans on a budget, here are 10 examples of when renting might be the more cost-effective choice.
Designer Dresses
Designer gowns and dresses were once out of reach to most of us, affordable only to glitzy celebrities and those with a healthy cushion of disposable income. Now thanks to some hip rental companies, women with more modest means can wear red-carpet-worthy pieces for a fraction of the retail price.
Wear Today Gone Tomorrow rents out dresses and accessories by top designers, many for 90% off the retail price, such as this Kay Unger strapless silk ruched dress for $57 for a seven-day rental (retails for $570). Just keep in mind that the company tacks on a $10 cleaning fee for all dresses.
Rent the Runway also lends out dresses by more than 100 designers, including Vera Wang, Missoni and Diane von Furstenberg, plus accessories such as jewelry and shawls.
Both companies send the rental dress of your choice by mail, and Rent the Runway throws in a second size for free just in case the first one doesn't fit.
Tools
While everyone should probably own a basic toolbox, when it comes to bigger power tools that you may only need for a special project, you can save money by renting.
The Home Depot rents out a variety of tools for the occasional home repair or maintenance project.
For instance, I can rent a 20-inch gas chainsaw from my local Home Depot for $63 a day — a good value, considering that buying one from the store can cost from about $200 to $570, according to HomeDepot.com.
[See also: Turn your passion into your career ]
You can also rent a carpet cleaner from most Home Depot locations for $18 for four hours, or $24.97 for the day. According to HomeDepot.com, most carpet cleaners at the store cost $150 or more to purchase.
Handbags
Like dresses, you can rent designer handbags for a considerable amount less than the retail price.
If you're wondering when it makes more sense to borrow a bag than buy one, consider these situations:
You have a special event, such as a wedding, that may call for a specific color or style to match your dress, but you don't want to spend a bundle on something you may not wear again (how many "lilac" colored outfits do you normally wear?). Or say you're looking to dress to impress for a job interview, date or charity function. Or you want a new handbag for this season, but don't want to spend too much and get stuck with a bag that may end up in your closet when the season changes.
Bag Borrow or Steal rents out handbags by hot designers like Tory Burch, Prada, Michael Kors and Fendi on a weekly, monthly or seasonal basis. Another service is Handbag Envy, which rents bags for the week or month by designers such as Louis Vuitton, Chanel and Gucci.
Caskets
The only thing spookier than a funeral is the price tag that comes along with it. Purchasing a casket alone can cost an arm and a leg, with the average metal casket priced at $2,295 and the average wooden casket costing $2,865, according to the National Funeral Directors Association.
Believe it or not, though, buying a casket isn't your only option — many funeral homes actually offer casket rentals for the funeral services, which can save you a good amount of money. Rental caskets look like any other to the casual observer, but inside they contain an insert where the body is placed that is removed after the services.
"You normally don't see rentals used with burials — they're typically used for cremation," says funeral director Michael Krill, spokesperson for the NFDA and owner of three funeral homes in northwest Ohio. Krill adds that rentals at his funeral home, which are included in package deals, can save customers about $800-$900.
[See also: Secrets Customer Service Reps Don't Want You to Know]
Textbooks
As if college tuition fees aren't high enough these days, the cost of books can also make a dent in your savings. According to the College Board, books and other course materials at a four-year public college cost students $1,168 on average for the 2011-2012 academic year.
One way to save money is by borrowing textbooks by services such as CampusBookRentals.com, which rents new and gently used textbooks for a good amount less than the cost of buying the book new and, in many cases, used. For instance, the Longman Anthology of British Literature, Volumes 1A, 1B and 1C rents for $23.13 for the semester — about a third of its list price of $66.67.
Other sites that offer book rentals include Half.com and Chegg.com.
Camping Gear
Ahh, the great outdoors. Many of us daydream about spending more time with Mother Nature, but few of us get around to actually going on regular camping trips. For those who can only go camping once or twice a year, it's probably best to rent your equipment.
The popular sporting goods store REIREI, for instance, you can rent a four-person tent for $45 the first day and $10 for every additional day — which equals $55 for a weekend. Meanwhile, most four-person tents on REI.com cost in the $200 and $300 range.
Trucks
When it comes to that occasional home improvement project that requires you to transport a heavy load, it's probably not worth it to buy your own pickup truck — and you certainly don't want to risk damaging the car you already own.
The Home Depot lets you rent a pickup truck for $19 for the first 75 minutes, or $69 for a day, which is available at most of its retail locations. All you'll need is a driver's license, a valid vehicle insurance card and a major credit card.
Parking Spots
One of the most frustrating things about driving is finding a place to park, especially in a busy city or a congested town square. Luckily, there are a variety of services out there that allow you to rent spots, often at a rate significantly lower than commercial car parks or on-street meters.
You can book a spot with the click of a mouse through sites such as ParkatmyHouse and Craigslist — whether you need a spot on a daily, weekly or monthly basis.
Bikes
If you only go biking once in a while, or are an avid cyclist but don't feel like transporting your bike every time you travel, renting could be a good option.
You can rent bikes at low rates from services such as RentaBikeNow.com, which partners with more than 250 bike shops around the country to help people find a bike near their current location. Just head to the site and choose your state from the drop-down menu, and a list of bike shops that offer rentals will appear on a map, allowing you to find the nearest one. Simply click the bike shop you're interested in, choose the date(s) you want to rent, and make your reservation. Your thighs will thank you.
Furniture
If you're decorating a house you plan on living in for years to come, we won't argue with you if you choose to buy your furniture. But if you are hosting a special event at your home that requires some additional seating and tables, are living somewhere temporarily or are selling and want to stage your home with fresh pieces, renting might make the most sense.
Cort provides a host of stylish choices, including sofas, accent chairs, dining tables and rugs, as well as complete sets for your living room, bedroom and dining room. This living room set, for instance, includes a sofa, accent chair, cocktail table, end table and silver tear-drop table lamp for $265 per month.
2) In the Markets today:
Blue-chip stocks finished in the red for the first time in five sessions, while the broader market was flat, as investors watched Europe for developments in its debt crisis.
Wall Street rests after rally; bellwether earnings ahead-From Reuters
Stocks finished almost flat on Monday as investors took a break from a recent rally, awaiting earnings from bellwethers such as Apple later in the week.
The S&P 500 is up nearly 5 percent so far this year as an improving U.S. economy has bolstered investor optimism. The Dow and the S&P 500 both had their best weekly performances in a month last week.
"Investors are reserved after a mixed bag of results. Many companies have announced sluggish results, portraying a cautious environment going forward," said Robert Lutts, chief investment officer at Cabot Money Management in Salem, Massachusetts.
"The expectations are very moderate in the market, so a little bit of good news could lead to a significant pop in a stock."
According to Thomson Reuters data, 15 percent of S&P 500 companies have reported earnings, and just 59 percent posted results above Wall Street's expectations. That percentage trails the average of about 70 percent, though the rate is expected to improve as the earnings season gathers steam.
Among the 117 S&P 500 companies expected to report earnings this week is tech company Apple Inc (NasdaqGS:AAPL - News), due after the closing bell on Tuesday.
The euro-zone crisis remained in the background for the market but has had less of an effect on stocks lately. Germany and France pushed for a deal between Greece and its private creditors, and the two said they still were dedicated to a new bailout that Athens needs by March to stave off default.
The Dow Jones industrial average (DJI:^DJI - News) slipped 11.66 points, or 0.09 percent, to end at 12,708.82. But the Standard & Poor's 500 Index (SNP:^GSPC - News) inched up 0.62 point, or 0.05 percent, to close at 1,316.00. And the Nasdaq Composite Index (Nasdaq:^IXIC - News) dipped 2.53 points, or 0.09 percent, to end at 2,784.17.
TEXAS INSTRUMENTS UP LATE
After the bell, Texas Instruments Inc (NasdaqGS:TXN - News) shares rose 2.5 percent to $34.00 after reporting higher-than-expected fourth-quarter revenue.
In addition to Apple, a number of Dow components are due to report earnings on Tuesday, notably Verizon Communications Inc (NYSE:VZ - News), Travelers Companies Inc (NYSE:TRV - News), McDonald's Corp (NYSE:MCD - News), DuPont (NYSE:DD - News) and Johnson & Johnson (NYSE:JNJ - News).
Wall Street's agenda includes the Federal Reserve's first policymaking meeting of the year, which will begin on Tuesday and conclude on Wednesday with a statement. The Fed is likely to say that it will not start raising interest rates again until the first half of 2014, more than five years after cutting them to near zero, a Reuters poll of leading Wall Street economists showed.
The U.S. central bank will begin a new practice of announcing policymakers' interest-rate projections when this week's meeting ends on Wednesday.
During Monday's regular session, Halliburton Co (NYSE:HAL - News) shares fell 2.1 percent to $35.44 after the world's second-largest oilfield services group warned that the deep slump in U.S. natural gas prices could cause near-term disruptions that pinch first-quarter earnings.
On a positive note, Chesapeake Energy Corp (NYSE:CHK - News) gained 6.3 percent to $22.28 after it said it will reduce dry gas drilling and cut production in response to natural gas prices falling below "economically attractive" levels. Natural gas companies' shares were among the day's best performers, with an index of those stocks (NYSE:^XNG - News) rising 3.6 percent.
Research In Motion Ltd (Toronto:RIM.TO - News)(NasdaqGS:RIMM - News) fell 8.5 percent to $15.56 as analysts were skeptical about the resignation of the BlackBerry maker's co-chief executives.
Sears Holding Corp (NasdaqGS:SHLD - News) fell 3.3 percent to $47.39 after rising as high as $54.76 in what analysts said could be a short squeeze.
The stock is the most shorted stock in the S&P 500, according to Data Explorers, with 94 percent of shares available used to sell short. The retailer has been the best-performing stock in the index for the year, up more than 50 percent.
"That is a classic short squeeze. There have been headlines all over the name now for the better part of a month or so, and it's largely been quite negative," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Trading volume was at about 6.6 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, in line with the daily average of 6.68 billion.
Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 2. In contrast, on the Nasdaq, about six stocks fell for every five that rose.
3) Top financial story of the day:
Biggest Hurdle Is Rescuers' Insistence on Low Compensation for Creditors That Participate in the Bailout
Talks on Greek Debt Hit an Impasse-From The Wall Street Journal
A crucial week of talks on the restructuring of Greece's debt passed with no agreement, and discussions appeared to languish over the weekend, leaving Greece in an uncertain state and with a loudly ticking clock.
Greek politicians and negotiators for the main Greek creditors' group, the Institute of International Finance, met into the wee hours of Saturday morning but came up with nothing. The IIF's two chief representatives left Athens later Saturday, for what their spokesman described as "longstanding personal appointments." It wasn't clear when they would return, although some discussions continued by phone over the weekend.
The impasse reflects the complexities of the giant restructuring—which proposes to cut around €100 billion ($129.3 billion) from Greece's €350 billion debt mountain—and the web of competing, colluding and diverging interests among the many parties to the deal.
Meanwhile, Italian Prime Minister Mario Monti on Sunday said the country is moving forward with plans to spin off Eni SpA's natural-gas business, adding that he has "very high" expectations that euro-zone countries will eventually agree to pool their debt through jointly issued bonds.
People close to the Greek talks, which are expected to continue in some form this week, said the largest hurdle is now the insistence of Greece's rescuers, the other euro-zone countries and the International Monetary Fund, on low compensation for creditors that participate in the restructuring.
There is obvious sense in that: The rescuers, especially paymaster Germany, will be lending Greece the bulk of any money it gives as compensation to creditors. With their parliaments restive, Germany and its allies want the cost as low as possible.
So does the IMF, which has committed an unusually large sum to Greece and is wrestling with internal rules that prevent it from lending more to a country that has little realistic chance of reducing its debt to a controllable level.
The rough outlines of the restructuring are clear: Greek creditors who hold around €200 billion in Greek bonds will be implored to exchange those bonds for new ones with half the face value. The new bonds will also mature decades in the future, meaning those creditors bear the not-insignificant risk of lending money to Greece for a very long time.
To sweeten the deal, euro-zone countries will lend Greece roughly €30 billion that Greece will earmark for creditors. Discussions have centered on Greece using that money to dispense cash or high-quality short-term notes from the euro-zone bailout fund to creditors in lieu of some of the new bonds.
The people close to the talks said the creditors and Greece were close to agreement Friday on the interest rates to be paid to creditors on the new bonds, which would average just over 4%. But while Greece and its creditors are nominally the parties to the negotiation, Germany and the IMF have considerable weight. These people said both pushed for a lower coupon, with the IMF insisting it not exceed 3.5% on average.
No deal can go ahead without Germany's and the IMF's say-so. That is because Greece doesn't have the money on its own to provide the sweeteners. Nor, even after the restructuring, could it finance its hefty budget deficits and repay other debt not subject to the exchange without help.
The interest rate is crucial for several reasons. First, Germany and the other countries will have to lend money to Greece to pay it. The new Greek bailout currently being negotiated covers roughly the next three years of financing, and the rescuers would like the package to be as small as possible. Hence, negotiators have discussed a rising coupon that starts off low and gets higher in later years—beyond the horizon of the immediate bailout.
Second, a lower rate makes it more likely that Greece's debt will be bearable in the long term, a key issue for the IMF.
And for creditors, holding a Greek bond is risky. They thus want to get as much interest as they can, as soon as possible.
The progress, or not, of the Greek talks will be a central topic at Monday's meeting of euro-zone finance ministers in Brussels. The European authorities had wanted a restructuring deal to be in hand before the meeting, which would enable finance ministers to evaluate it. Now, the hope is that it will be complete before a summit of European leaders Jan. 30. But the delay has made the timetable very tight.
The package of sweeteners could well require another meeting of finance ministers to put in place, and the full new bailout perhaps another. Actually effecting the debt exchange will take several weeks, and Greece and the EU haven't yet approached what could be the toughest hurdle: Forcing reluctant creditors to accept the deal.
On March 20, Greece must repay €14.4 billion to bondholders. It doesn't have that money. Either the exchange is completed and those bondholders agree to—or are forced to—accept new debt that matures in a generation, or it isn't and the rescuers must decide whether to lend Greece money to repay or let the country default.
4) Quote of the Day from Dave Ramsey.com:
Fortune favors the brave. — Publius Terence
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