Budgeting Basics

Is your credit getting you down? Ever feel like there is not enough money in the month to pay your bills? You are not alone. Many people struggle to make ends meet, probably more than you realize. But good news is here. There are many strategies you have available to help you make ends meet.

The first thing you want to do is create a monthly budget. There are many computer programs that can help you do this so you may want to use one of them. Alternatively, if you are a long time customer at a bank you might want to ask them from what kind of budgeting suggestions they have for you since some banks develop information to help their patrons with their budgets. After all, it's in their interest for their patrons to have a budget!

In developing your budget you should create two columns on a piece of paper. For one column you should list all your monthly expenses while the second column should list all your monthly income. Next, find ways to decrease your monthly expenses while you increase your monthly income.

It may not always be easy to decrease your monthly expenses but that might be the easier thing to do than to increase your monthly income. In fact, decreasing monthly expenses often has an immediate impact on your budget while increasing monthly income may not be so immediate.

Some things that you may want to do in order to decrease your monthly expenses may include eating at a restaurant a little less than you do now, going without satellite television or your cellular phone, and maybe doing without some of the luxuries you come to expect each month.

Some of the things you can do in order to increase your monthly income may be something as simple as working overtime one day a week. You'll be surprised at how dramatic of an effect this can have. Commit to yourself to use the money that you earned from working overtime to pay down some of your extra debts. Another idea to increase your monthly income is to start a work at home job to do in your spare time.

Investing is another way that you can increase your income. Many people think that it requires capital to increase your income through investing but that is not the case. One way you can increase your income through investing without increasing the capital that you spend is by getting a home improvement loan. Use the money you get from your home improvement loan to build an addition on your house, put a new roof on your home, install new windows, or paint a room. The overall effect will be to increase the value of your home so that when you eventually sell your house you'll make more money.

Mark Lambie is the founder of Loan Source, a website for UK residents seeking secured loans. Visit our website today for a free Secured Loan quote and find out how much we can save you.

[tags]loans[/tags]

Boost Your Savings

It is general knowledge that residents of the United Kingdom are typically not savers. They tend to spend much more than they save; according to studies, saving money is not as popular as it once was. Saving is extremely important to the quality of life you expect to live in the future. Think about it, what would happen if your car suddenly quit working? What would you do if the heater or refrigerator within your home just decided to give up one day? Imagine a situation where an emergency occurred and you had to travel immediately for some reason, what would you do?

Saving your money within an account can be an excellent source of immediate funds for an unexpected emergency. It makes a great deal of sense to simply put away money into an interest bearing account for these types of events, instead of having to take out a loan or bill a credit card for them. If you do either of these things will result in more debt and higher interest payments. Many experts believe that you need to set your priorities in the right direction and you should attempt to, over time, save an equal to your salary over a three month period.

Many people may find this a lot of money to put back when bills need to be paid, that is fine, consider saving as much as you possibly can without setting yourself into a deeper hole. If you simply saved ฃ100 a week over a three-month period you would have saved ฃ1,200 (not including any interest accrued), that would likely pay for a broke refrigerator or a significant amount on a new or repaired heater. There are many different types of savings accounts that you can consider, some of which do not require substantial deposits.

Typically, a banking institution will access a tax on the interest prior to adding it into your savings account, for example a taxpayer at the basic rate level will be accessed twenty (20) percent, while a taxpayer at a higher rate will be accessed forty (40) percent. For those who do not pay taxes, no taxes are deducted from the interest. For those who are non-taxpayers, you will be required to fill out a R85 form, this will allow you to avoid the taxes and receive the total interest accrued on the account.

One thing people should definitely consider is an ISA (Individual Savings Account), the government of the United Kingdom, created these types of accounts in efforts to encourage residents to save their money. In this account, they allow you to save your money in an amount of ฃ3,000 or less yearly, that will be considered tax-free.

Jeff Lakie is a leading writer at the
Bad credit loans uk website. Stop by today for additional information.

[tags]loans, uk finance[/tags]

Basic Frugal Advice for New Parents

Saving money on your children can be quite easy. It doesn't take a lot of work or scouring garage sales on your weekends.

All it takes is a little wise shopping and some recycling.

Let's start with the shopping. When it comes to clothes, remember that bigger is always better. A little room to grow will make an outfit last longer. Think about whether or not you will really dress your child in the outfit. Yes, cute dresses and little suits are precious, but if the child won't wear it but once, it's probably not the most frugal decision. Think about what the child really wears. For instance, little girls are cute in dresses and stockings, but when they are at the crawling stage, they can't get around very well. Plus, stockings get dirty easily.

Many parents like to try shopping at resale or consignment stores. These stores are great if you actually spend less. Too many people simply spend the same amount, but bring more home. Some people spend more without realizing it. A child can have too many clothes. If there are clothes that don't get worn, they were a waste of money. I acknowledge that it takes a little trial and error to find out what are good purchases, but eventually it comes.

Buying out of season clothes off the sales racks is a little risky. You need to be sure that your child will be that size come the next winter. You can't always think that a one-year old will wear a 1T or 12 month outfit. My one-year old wears anything from 3 to 9 months, depending on the brand. My friend's ten month old is wearing 12 to 18 months. We all come in different sizes, even as children.

The good news is that stores are often putting the season's clothes on sale long before the season is over. Winter coats can often be found on sale in December or January. This is great for kids that hit a growth spurt mid-way through winter. You can think long term about outfits too. A little outfit with a short sleeve shirt and jeans only needs a sweat-shirt or a jacket to become a fall or winter outfit. Keep in mind that most of your clothes are worn year round.

Personally, I shop for my child once every season. I get everything I know she will need at that time. Then I don't go back into the clothing section for anything, unless I am there for a specific item. Otherwise, I'm buying socks each time just because they are cute or picking two or three outfits off of the sales rack that I don't need.

When it comes to toys, be practical. My daughter's favorite toy in the world is a plastic pop bottle. She can be occupied for a long time with a bucket full of odd things. I know that there are many things around the house that she has yet to explore. Think of things you can introduce to your kids as fun and educational that you already own.

When you are shopping, think about how fast your children are growing. If you have a 6 month old and a toy is recommended for a 6 month old, you might consider looking for another toy that will interest the child in a couple of months. Stretch things out as far as possible. There are great toy combinations out there that last a child forever. For example, you can buy a play board that turns into a walk-behind toy that then turns into a scooter. It covers six months to two years in stages. And saves you from buying three separate toys.

And remember, a lot of toys aren't necessary. Your child would much rather play with you and a piece of yarn or go for a slow walk than play alone with a toy. Often the most frugal items, like a bed-time book, are those that take a little time on your part. To many frugal people, it is better to spend time than money.

You will find that there are hundreds of ways to save money with your children. From recycling paper grocery sacks into drawing paper to cutting up magazines for picture books, the possibilities are endless. It's all about being a little creative and keeping it fun.

Martin Lukac, represents http://www.RateEmpire.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Visit http://www.RateEmpire.com today.

[tags]personal finance,raising kids,thrifty spending,thrift[/tags]

Balance Your Checkbook Regularly

Do you faithfully balance your checkbook each month? How about once a week? Chances are that you don't.

But you should.

Balancing your checkbook is the starting point of managing your finances. Millions of Americans don't do it regularly. Some people don't even write down the exact change on the checks they write. Some people enter false amounts into their check register to think they have less money than they really do. Others want to hide things from their spouses. Several only balance their checkbooks once a year when they do taxes.

Okay, I skipped two months when my daughter was born. When I finally sat down to get it all balanced, it took hours. It was awful.

The most time effective way to balance your account is on a weekly basis. I fully believe that the longer you wait between balancing sessions, the more errors you will find. A checkbook that just won't add up is a nightmare that is often never figured out.

Imagine my surprise after being married for a decade to find out that my husband didn't know how to balance a checkbook. Oh- he never overdrew an account or had a problem figuring out how much money he had. He just didn't know how to sit down and add it all up on paper. When he took over the complete management of our finances, it didn't last a month. But he did learn how to balance the checkbook.

Balancing your checkbook is simply matching your records with the bank's records. You compare your register to your monthly bank statement. You can quickly do this on the computer, but remember that you are entering the numbers on your end, so mistakes can still be made. You can also do this with pen and paper, which is often preferred by a lot of people. I use a large log book that will hold almost a whole month of spending per page. I like being able to look over a long span of time at once. I use post notes to keep track of when I balance and any discrepencies.

The first step is to regularly write down all receipts. We have a basket next to where we empty our pockets every evening. It is habit to drop all receipts in the basket. When money is tight, I might balance it every other day. This is easy by checking my account via the internet. You can also call into your bank for the account history by telephone.

That doens't mean that we don't miss receipts. Sometimes we don't bring them home. If we don't, by balancing every week, we are able to catch the missing receipts before they add up to a whole lot of money.

Balancing your checking account is quite simple. Start by checking off every item in your register that has cleared the bank. Then go back and add in any items that the bank says you spent, but you didn't write down. This may be interest earned or bank fees.

Total up all of the checks and debits versus the deposits that you do not checked as cleared. This is the amount of money that you have floating around. It hasn't cleared yet, but it is already spent.

Subtract that amount from the ending balance in your register. This amount should equal the balance on your bank statement. If it doesn't check for math errors in your checkbook or the omittance of items.

Sometimes, it is impossible to reconcile your checkbook. This often happens when you let a large amount of time go by. Simply start over. Accept what the bank says your balance is and go from there. Balance your account more often, and it probably won't happen again.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

[tags]how to balance checkbook,balancing checkbook,personal finance tip[/tags]

Balance Your Checkbook - A Vital Habit to Develop

As we matured into adulthood, the whole process of growing up and making a life of our own entailed a great deal of new responsibility. Let’s face it, nobody wants to deal with the chores of daily living, among the most dreaded and overlooked being management of one’s finances. We all love money, that’s what we all work so hard for, to earn money and save and spend it as we see fit. Unfortunately, earning money also entails keeping track of your expenditures in order to be fully aware of how much money you have to spend, and how much you’ve socked away for the future or a “rainy day.”

Bounced checks can have an adverse effect on your credit score, depending on the reporting policies of the financial institution involved. I think that we can all agree that spending a little time with your calculator and checkbook beats the daylights out of dealing with bounced checks, the not so insignificant fees associated with them and the deleterious effect on your credit rating. You’re in our program to get your credit under control and eventually rebuild your credit Balancing your checkbook is fairly easy, especially if you take a few simple steps to streamline the process. Every time you earn money and deposit it in your checking account, write it down in your checkbook ledger. Or if it makes it easier, buy a separate ledger and use that (they’re often larger than the one you get with your checkbook). Also take an envelope and set it aside for receipts you get when you use your bank debit card to withdraw funds (or make a purchase) so you can calculate your account balance as accurately as possible.

The same goes for other spending you do. Make a point of writing everything down. If you forget even a single item, it can result in undue time and effort trying to reconstruct these expenses from memory or to purchase the information from your bank. In fact, you might do well to make a habit of saving every receipt, maybe in a shoebox or something like that, so that you always know that between your ledger and your receipts you have everything you need – even if you forgot to record something. But this must become habit or you’ll only end up frustrating yourself even more.

At the end of every month, add all your deposits together and record that number in writing. Then you add up all your expenses. Subtract the expenses from the deposits and add that to your beginning balance (or last month’s balance). Check your statement to see what fees your bank charged and deduct that and Voila! You have an accurate account balance! Check your figures against your current statement and you might even want to take advantage of your bank’s telephone based customer service to confirm your numbers.

If you find no discrepancies, everything is really pretty close if not perfect and you’re done – until the following month rolls around. Then spend a few minutes to do it again; you’ll be very glad you did… this is time well spent and you will reap the rewards of developing discipline in your financial management methods and philosophy. No surprises in the mail (returned checks), no bounce fees (to your bank and the merchant), and most importantly—no damage to your credit rating.

We cannot emphasize the importance of developing these kinds of good financial management habits.

The Credit Counseling Foundation, Inc
provides web-based education and personalized consumer credit counseling to clients
and the general public in an effort to help consumers use credit wisely. Visit
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[tags]debt,debts,finance,financial management,check book,checks,credit score,credit counseling,check,money[/tags]

Are You Sick of the Financial Insecurity of Fluctuating Seasons and Income

Finding a stable and secure income that will come year in, year out, no matter what happens on the farm, will give you real peace of mind. By investing off farm, you are not only providing a secure income now, but also preparing for retirement. This IS attainable by all levels of income earners and people of all ages.

I am a farmer’s wife and have lived through some good and bad seasons on the farm. If farming was all about money, then we wouldn’t still be here. Most of us farmers genuinely LOVE the lifestyle that farming brings.

However, being a ‘city girl’ and marrying a farmer, I struggle with the insecurity and irregularity of income. These days, you’d have to be a top financial professional to get it right 100% of the time. Some years we seem to have plenty of money and other we’re in debt before we even start paying for seeding expenses (and that doesn’t even include the tax due!). Does this sound familiar?

Well, I’ve got some great news for you. I have discovered a way that provides a regular income that is not affected by the rainfall! My husband and I have been investing in real estate now for a couple of years and have found that even in bad times, we still have that income to fall back on. This brings real ‘peace of mind.’ Trust me, it’s really not as hard or as expensive, as it sounds, and we as farmers have an extra huge benefit that we can take advantage of, and that is – the fluctuating seasons and income! (I bet that’s a surprise!)

Firstly, real estate investing builds not only income for now (assuming you buy cash flow positive properties), but will also prepare you for a comfortable retirement. As a bonus, you also get the capital increase (real estate is said to double in value every 7-10 years approximately), as well as tax advantages. And if this isn’t enough, then you can also use other people’s money to acquire it and pay it off.

Sounds like a winner all around, don’t you think?

Not convinced yet?

Well, how could we use our fluctuating income to our advantage? As farmers, on a good year we could put money in a ‘mortgage offset account’ or just pay extra off the loan. This would reduce your interest payments. In a bad year, you can redraw the extra equity you have in the property, or properties. This investment vehicle can be used totally to your advantage (check with your accountant or tax advisor though).

I really could go on for ages about this brilliant opportunity because I am so passionate about it and it has been our saving grace over the last couple of years as well as having comfort in knowing that we’re planning for a secure financial future.

I really hope you have got some benefit out of this article, at least be inspired to check it out further. Good luck in your enterprises, whatever you do, and I hope that this year is a great one for you!

Mandy Nield is a recognised authority on the subject of investing. Whether you are a fully experienced master craftsman or a raw apprentice, you will learn exciting and achievable ways to improve your saving and invest profitably in real estate, to secure a financial future.

http://www.anyonecaninvest.com

[tags]off farm income,retirement,cash flow,farming,farmers,security,retire,investing,invest,investment[/tags]

Are You Making These 5 Money Mistakes

Lots of people want more financial prosperity in their lives. And yet most continually sabotage that desire without realizing it! Be aware of these five big money mistakes we make in attracting & allowing more of it into our lives:

1 - Worrying about money. If you're familiar with the law of attraction, you know you get what you worry about. Worry about money, and you'll get more to worry about! This is the numero uno culprit to being financially strapped for most people. (And trust me, it is work to be financially strapped!)

2 - Perpetuating unsupportive beliefs. Do you believe or have you said any of the following?: It takes money to make money; Money doesn't grow on trees; You've got to work hard for your money. These limiting beliefs keep financial abundance from you.

3 - Being stingy with the green stuff. When you're stingy with money, it is stingy with you. (Your vibration dictates it.) Hoarding cash comes from our "lizard brain," and is not a vibration that allows more money to flow into your life.

4 - Expecting bad money things to happen. Maybe you just "know" the estimate from the car shop will be astronomical. Or you "always" miss the good bargains. Financial success will "never" be easy for you. One thing you can count on is that you get what you expect!

5 - Not being grateful for the wealth you do have. We're a prosperous nation, and yet we're full of complaints about not having enough. Consciously acknowledge the wealth in your life regularly, and by doing so you set yourself up for getting more of it.

The bottom line is we get what we think about. If you want more money, know that it is yours to have (so you can stop worrying and start relaxing). Give up your bad beliefs and adopt new ones: "I'm a money magnet!" Count your blessings everywhere you can. If you've had trouble with finances in the past, know it can be different. Expect it, and allow for a new experience. I repeat: It can be different! Expect it to be good!

So tip the waitress well, be generous with yourself too, and let the money flow easily into your life. And if you need help faking it till it's reality, email the Good Vibe Coach at jmaw@goodvibecoach.com.

About the Author: Jeannette Maw is a Law of Attraction Coach and founder of Good Vibe Coaching, specializing in helping people get more of what they want, and less of what they don't. To subscribe to the free Get What You Want ezine, go to http://www.goodvibecoach.com

[tags]Law, Attraction, Abundance, Financial,Prosperity,Money,Finance,Wealth,More,Belief,Attracting,Cash[/tags]

An Overview Of The Direct Deposit System

Direct deposit is an excellent feature offered by many banks all around your area. Banking is supposed to be convenient and easy, it has been made that much easier and more convenient with the offering of direct deposits. When thinking about direct deposit, consider many of the things that could apply to you. Have you found yourself hurrying off to make the cutoff point for bank deposits? Do you travel to your banking institution on a weekly basis to deposit a paycheck? Have you found yourself losing a check you intend to take to the bank to deposit or cash? If you have answered any of these questions with a yes, it may be time to consider direct deposit.

Direct deposits are the action of your employer depositing your paycheck directly into your bank account by electronic means. This is extremely safe and easy for you to do, all you simply have to do is first, ensure that your employer offers direct deposits (many employers now days ONLY offer direct deposits to their employees). The next thing you will have to do is fill out a form that supplies your employer with your bank routing number, account number, and bank information.

By choosing direct deposits, you are ensuring easy and safe transfer of your funds to your bank account. It is reliable and your paycheck is deposited into your bank account on time, you no longer have to keep track of the banking hours or hurry to meet the deposit deadline. You also decrease the risk of losing your paycheck by using direct deposits. There are other benefits to direct deposits including, when your funds are deposited directly the funds are available to you immediately upon completion of the transfer. Occasionally, some banks require you to wait a specified number of days before the funds will become available, to wait for check clearance.

Another excellent benefit, is if you are away from your home on business or on a vacation, you will not have to worry about your paycheck coming in the mail or being stolen, your money will be in your account safely. They are also extremely secure, stolen, misplaced, or lost checks will become a thing of the past. Direct deposits leave such a trail behind it that tracking these are much easier than tracking a paper check.

As you can see direct deposits can make your life much easier and reduce the number of trips you will need to make to your banking institution.

Jeff Lakie is a contributing author at our website where
You can get a free Secured Loans Quote right now. Take a moment and see
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[tags]loans, uk finance[/tags]

An Analysis of Lenox (LNX)

Below is a letter from Mr. John L. Morgan, beneficial owner of approximately 7% of Lenox (LNX), to Ms. Susan E. Engel, Chairwoman and CEO of Lenox.

Dear Susan,

When your board offered me a directorship on September 18, 2006, we discussed the reasons that made it unacceptable. At that time, I reiterated that I could best serve the shareholders of Lenox Group by assuming a leadership role on the Board of Directors and playing an active role in formulating and guiding the strategic direction of the Company. Furthermore, I expressed my intention to not make changes in the management or Board of Directors. My views were based on information I had at that time.

The Board’s rejection of my offer to help the Company create a successful strategy has given me a different perspective. I now feel that the Board has decided to pursue a course of action that is not in the best interests of the shareholders and is a continuation of the strategies that have failed to create value over the past ten years.

The management team and Board of Directors continue to behave like the Company is a large, successful Company that has margin for making more mistakes. I do not agree. My offer to assist the Company in changing its strategy to benefit shareholders has been rejected although I proposed to work with the existing management and Board of Directors. You have made your position clear and I hope this letter will do the same for me and other likeminded shareholders.

Very truly yours,

John L. Morgan

The Ownership Situation

First, let me explain the ownership situation. The reporting persons are John L. Morgan, Kirk A. MacKenzie, Jack A. Norqual, and Rush River Group. Rush River Group is a limited liability corporation (LLC) of which Morgan, MacKenzie, and Norqual are members.

Rush River was formed in December 1998 in Minnesota and "its principal business activities involve investing in equity securities of privately owned and publicly traded companies, as well as other types of securities." As far as I can tell, the only members of Rush River are the three aforementioned men: Morgan, MacKenzie, and Norqual.

According to a recent SEC filing, Morgan beneficially owned 6.1% of the outstanding shares of common stock in Lenox, Rush River owned 0.79%, MacKenzie owned 0.07%, and Norqual owned 0.07%.

Please keep in mind that this 7% stake in Lenox is controlled by Mr. Morgan; but, not Winmark Corporation (WINA), a publicly-held franchisor of retail stores. This is an important distinction to keep in mind (especially since Winmark is a public company).

Morgan is the Chairman and CEO of Winmark; MacKenzie is the Vice Chairman. However, their stake in Lenox has nothing to do with Winmark. In fact, last time I checked, Winmark did not have any material investments in marketable securities.

The reported position amounts to 989,300 shares of Lenox. Shares of Lenox last closed at $6.23 a share. So, the position would be worth a little over $6.16 million. Since Winmark only has a market cap of $126 million, I want to make it clear Winmark does not have a position in Lenox – Morgan does. He just happens to be the Chairman and CEO of Winmark. I hope this clears up any possible confusion about Winmark.

Lenox

Now, I can move on to discussing the truly interesting aspect of this news, Lenox itself.

Lenox is the result of a September 2005 merger between Department 56 and Lenox Incorporated. Prior to the merger, Department 56 was known for its "Village Series of collectible, handcrafted, lighted ceramic and porcelain houses, buildings and related accessories that depict nostalgic scenes". That last sentence was taken directly from the company's 10-K, simply because I couldn't write a better description myself. I assume most of you have seen the series. Even if you haven't, I'm sure you can imagine the concept of a little porcelain Christmas scene.

Obviously, the Lenox name is much better known than the Department 56 name. Therefore, when Department 56 acquired Lenox, it changed its name to Lenox.

In its 10-K, the company calls the Lenox acquisition a "transformational event". This term is too often applied to mergers that are far from transformational. In this case, however, it’s a perfectly accurate description.

Whether the transformation is for better or worse is debatable; however, the fact that the merger has transformed the company is not debatable. To put the size of this transaction in perspective, consider this: Today, Lenox (the combined company) has a market cap of $88 million. In September 2005, Department 56 paid $204 million to acquire Lenox Group. Immediately, this should tell you two things. One, the acquisition was probably quite large relative to the existing business. Two, the combined company's stock price has tanked.

Both of these statements are true. Even when shares of Department 56 were a lot more expensive, the Lenox acquisition was very large relative to the existing business when considered from the perspective of market cap, enterprise value, sales, and just about any other meaningful measure of the size of a business.

Obviously, the combined company's stock price has been falling hard since the merger. After all, the enterprise value of the entire company is not much greater than the amount Department 56 paid for the Lenox business.

The market is assigning a value of close to zero to the newly acquired Lenox business. This is remarkable considering the fact that Department 56 rarely traded at a lofty multiple when it was a stand alone business. In fact, the company's shares often traded at a P/E multiple in the high single digits or low double digits throughout the past decade.

The New Business

You probably already know what Lenox does. If you don't, a quote from the company's 10-K does a good job of explaining what the newly acquired business does:

"The company sells dinnerware, crystal stemware and giftware, stainless steel flatware, and silver-plated and metal giftware under the Lenox and Gorham brands. Dansk is the company's contemporary tabletop, houseware and giftware brand. The company sells premium causal dinnerware and fine china dinnerware, giftware and collectibles under the Lenox trademark, and sterling silver flatware and sterling silver giftware under the Gorham and Kirk Stieff trademarks. The company believes that it is the largest domestic marketer of fine tabletop products."

I'm sure you noticed a bad omen in the above paragraph. One of the company's brands (Dansk) is described as the company's "contemporary" brand to differentiate it from the other two brands. Obviously, having fine products that are not considered contemporary is a bit of a problem.

In fact, it may be a very large problem in the years ahead. Overall, it seems the market is moving away from formal dinning and towards more upscale casual dinning. This is not a new phenomenon; nor, is it likely to be a short-lived one.

On the other side of the scales, you do have the simple, undeniable fact that the company has one of the best brand names in its industry. It is also a big player in a very small industry. Those are both advantages that are difficult (if not impossible) to duplicate. For a $200 million business, Lenox has a lot of history – and perhaps, a lot of potential.

The Old Business

A big part of the problem with the performance of the company's shares (both over the short-term and the long-term) has been the performance of Department 56. In 2005, sales from Department 56's Village Series declined 21%, "which was consistent with the longer term trend" according to the company's 10-K. In fact, sales had clearly been declining each and every year from 1999-2005. Furthermore, sales in 2004 were substantially less than sales in 1996. So, even though there wasn't a continuous, straight-line decline in sales over the past ten years, the general trend for sales of the Village series has been decidedly negative for a full decade now.

To combat the "substantial attrition of the Gift and Specialty channel" the company has settled on two strategies intended to both "offset the decline of the Village business" and "to grow revenues long term". Those strategies are "expanding the company's channels of distribution outside its traditional Gift and Specialty channel" and "expanding the company's product offering to include year-round gift products." The former strategy sounds promising; the latter strategy sounds implausible.

Lenox is already moving to implement both strategies. In fact, the company made a small acquisition that should help expand Lenox's year-round product offerings. But, I remain highly skeptical of attempts to transform the gift products business into anything other than a highly seasonal business.

The Acquisition

At the time it was announced, I thought the Lenox acquisition sounded like an interesting move for the company. Department 56's operations looked lean; the operations at Lenox did not. Furthermore, the price paid for Lenox didn't look unreasonable, especially when compared to the kinds of prices many public companies have often paid to make such large ("transformational") acquisitions.

In September 2005, Department 56 acquired Lenox in a $204 million deal (including $7.6 million in transaction costs). Department 56 funded the acquisition "through a $275 million senior secured credit facility consisting of a $175 million revolving credit facility and a $100 million term loan".

As mentioned earlier, the combined company adopted the more recognizable Lenox name.

Restructuring

As a result of the merger, the company closed approximately half of the stores belonging to its new Lenox subsidiary. In total, the company closed 31 Lenox retail stores. As of February 1st, 2006, this left the company with only 36 retail stores. Six stores were operated under the Department 56 name; the remaining 30 stores were operated under the Lenox name.

After the merger, the company consolidated some of its operations. For instance, Lenox sold its Langhorne, Pennsylvannia facility when it moved certain operations to Bristol, Pennsylvannia. The company has used the cash proceeds of such sales to pay down debt incurred in the Lenox acquisition.

New Concept Stores

Lenox plans to launch a new mall-based chain of stores that will sell all of the company's brands (Department 56, Lenox, Gorham, and Dansk). The company plans to open three "All The Hoopla" stores during 2006. A fourth store will be opened in 2007.

Opportunities

The combination of Department 56 and Lenox presents several interesting opportunities. Perhaps most importantly, there's the hope that Lenox will become a leaner operation. Aside from any cost-savings made possible by the merger, there is also the simple fact that Department 56 was always a leaner operation than Lenox, and that the management at the new company might be more adept (or more determined) to keep costs down.

There is also some promise to the idea of selling all of the company's brands together. To a large extent, the distribution channels are similar. The "All The Hoopla" concept proves the company is committed to this bundling of its products. However, it's hard to see how the company's products are going to be much of a draw on their own. Is there really enough demand for these Lenox operated retail stores? The company's current plans call for a very limited launch. So, the price of failure would not be very great. Obviously, a success here would greatly benefit the company in the long run.

Conclusion

Lenox is an interesting opportunity. The business looks very cheap based on averages of past sales, EBIT, pre-tax earnings, etc. However, Lenox is now an entirely different company. The old Department 56 business faces rapidly declining sales. Neither Lenox nor Department 56 looked like a very promising business at the time of the merger. Today, they don't look a whole lot more promising together.

On the other hand, it's important to look past the company's recent results (which include a large write-off). It will take time to see the full effects of the merger. At present, it's difficult to judge either company independently, because of the acquisition.

Still, this is clearly a cheap business by most measures. There are problems at Lenox (as there were problems at Department 56). But, if the business can be run right, it should reward shareholders who buy at today's extraordinarily low levels.

Morgan's letter presents both the hope that there will be change and the realization that such change will not be easy. Clearly, the company's past performance has been unacceptable. The stock has never been as cheap as it is today; but, the problems have been just as bad.

Lenox offers an interesting opportunity for patient investors. Nonetheless, being a Lenox shareholder is certain to frustrate you even if it does eventually reward you.

Geoff Gannon writes a daily value investing blog and produces a weekly (half hour) value investing podcast at:

http://www.gannononinvesting.com

[tags]Lenox, LNX, stocks, investing, finance, stock, market,[/tags]

8 Simple Money Saving Tips and Tactics

Have a plan (and then follow it) at the grocery store. It’s ob-vious to have a list. In fact, I’m great at list-making. On my last dash to the store, my list contained the following items: Wheat Chex, toothpaste, gallon of milk, cheddar cheese, pretzels and Gatorade. The bill should have easily totaled less than $25.00. By the time I neared the check-out, my bill totaled close to $50.00. It seems a few extra items had crept into my cart. Make sure you have a plan and then follow it when you do your shopping. If you con-tinually overspend (like I have the tendency to do) leave the house with what you plan to spend plus a $5.00 lee-way.

Put kids to work clipping coupons. Single parents rarely have the time to clip coupons for savings. Give your children a list of products that you use regularly. Sit them down each Sunday with the paper and let them partake in a coupon hunt. For each coupon they find (and you use), they get to keep half of the coupon’s value. For example: if they find a $1.00 off coupon on Cheerios, they receive 50 cents when you use it and your grocery bill bottom line receives the other 50 cents.

Watch where you walk. Less expensive items are typically placed around the outside of the market, it’s those mid-dle aisles that hold the items that quickly add to your bill. When you do need to dash down one of those aisles, remember to look high and look low. Less expensive items are usually placed near the top or bottom of the shelves. The shelves that are eye-level are reserved for the more expensive items.

Buy in bulk when you can. Buying items, that don’t spoil, in bulk can save money and save trips to the store. For sta-ples and nonperishable goods, stock up at good sale prices or join a warehouse club. If warehouse quantities are too much for your own family, combine your list with a few other single parents and then split the food to maximize your savings.

Let children design greeting cards and wrapping paper using items found around the house. This makes a great rainy day project while providing savings for the family.

Shop year round. Instead of waiting for Christmas woes and stressing at a time that should be joyous for families, learn to shop and take advantage of sales year around. Have a small amount taken from each paycheck and put into a Christmas fund. Carry a Christmas list in your daily planner.

If you haven’t tried a thrift shop, now is the time. While the idea of thrift and resale shops once brought to mind pic-tures of dingy rooms with stained clothes – not so any-more! Thrift shop business is booming. If you haven’t tried a second-hand store, take a peek you could be pleasantly surprised!

Keep a spending diary. If you find that you are still scrimp-ing day-to-day, keep a detailed spending journal. It is of-ten amazing how little purchases add up to big expenses! Seeing expenses in black and white can be eye opening. Buying a quick cup of coffee at a drive-through each morning can easily cost you $20-$30 a month. Most peo-ple spend at least $5.00 each weekday on food related items at work. (Lunch, pop, coffee, snacks, etc.) Bringing lunches, treats and drinks from home could save your family $100 per month – or $1200 per year! Little ex-penses add up quickly.

When you find the areas in your life where the money is draining out, plug up the holes! Now that you are better equipped to handle your current finances, let’s take a look ahead to finances of the future.

The Change Your Life Challenge

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[tags]finance, money saving, money saving tips, saving, debt, money tips, money[/tags]