Every time you swipe your loyalty rewards card or use your department store credit card you’re giving merchants valuable information that is collected, reviewed and analyzed.

Your toothpaste or magazine purchase may not seem like much to you, but for corporate American it’s vital information that’s used to shape the way you shop and spend money.

In his recent column, New York Times reporter Charles Duhigg sheds light on exactly how effective merchants are at using our shopping data, so effective that they can even predict which customers are pregnant.

And why not? Expectant parents, as it turns out, are the Holy Grail for retailers. According to Duhigg:

“… among life events, none are more important than the arrival of a baby. At that moment, new parents’ habits are more flexible than at almost any other time in their adult lives. If companies can identify pregnant shoppers, they can earn millions.”

And while most merchants try to reach these coveted consumers as soon as their new bundles of joy arrive, Target attempted to reach this lucrative market as earlier as the second trimester of pregnancy.

How?

By mining the volumes of data they collect every day on their customers. If a customer all of suddenly starts buying unscented lotion or hand sanitizer, for instance, it could signal they were expecting. By identifying numerous such pregnancy “buying signals” Target could accurately predict which of its shoppers were expecting.

According to the Times article:

“The only problem is that identifying pregnant customers is harder than it sounds. Target has a baby-shower registry, and Pole started there, observing how shopping habits changed as a woman approached her due date, which women on the registry had willingly disclosed. He ran test after test, analyzing the data, and before long some useful patterns emerged. Lotions, for example. Lots of people buy lotion, but one of Pole’s colleagues noticed that women on the baby registry were buying larger quantities of unscented lotion around the beginning of their second trimester. Another analyst noted that sometime in the first 20 weeks, pregnant women loaded up on supplements like calcium, magnesium and zinc. Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date.

As Pole’s computers crawled through the data, he was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy.
And it’s not just baby business that Target was looking to snatch. They know full well that the mom or dad shopping for baby products is likely to pick up other household products in the process.”

But how would expectant parents react to receiving coupons from Target for baby products? Would they be “weirded out” by a company knowing about such an intimate event seemingly out of the blue? It seems Target had this covered as well. Simply mix the baby coupons in with coupons for totally unrelated products. Just like that, mommy-to-be has no idea she’s being targeted.

According to one Target executive:

“…we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We’d put an ad for a lawn mower next to diapers. We’d put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.”

But expectant parents aren’t the only ones on Target’s or any other retailers’ radar screens.

According to Duhigg, there are several points in our lives during which our shopping habits are open to change. These periods provide retailers with the opportunity to snag our business in the hopes of creating new long-term customers. Recent newlyweds, college graduates, and divorcees are just a few of the groups on retailers’ hot lists. And everyday we hand them the data that makes their job all the easier.

What’s your take? Is retailer data mining creepy, or is it what we should come to expect with shopping in the new Millennium?

Photo Credit: Mr. T in DC

Who hasn’t ever given in to the “Call of the Mall?”

It’s simply too hard to resist.

From the gleaming glass and aluminum of an iPad to the soft supple leather of the latest designer handbag, we’re bombarded with a tsunami of shopping temptations.

And the rush of endorphins as we anticipate carrying away our prized purchases makes the retail seduction complete.

Unfortunately, once the “shopper’s high” wears off we’re left with the uneasy feeling that comes with mounting bills, bloated credit card balances, and blown budgets.

Impulse shopping is the enemy of financial freedom.

But there’s hope. You can tame your inner shopaholic. It’s often as easy as leaving your credit cards in your car. When the urge to splurge hits, a walk back to the car to retrieve your plastic is often enough to dampen your shopping urges.

If you can’t bear parting with your credit cards for even a second, try a self-imposed cooling off period. Promise yourself to wait 48 hours before purchasing anything over $50.

Alternatively, create a system that reminds you of larger financial goals when you’re in the clutches of retail seduction. You can, for instance, wrap your long term goals around your credit cards. A small picture of a house clipped to your cards could remind you of the down payment you’re saving for, stopping impulse buying in its tracks.

Don’t forget to keep the price tags on everything you buy, at least for a few days. If buyer’s remorse sets in you can always return your purchase.

Finally, if you can’t beat them, join them. Perhaps the best way to beat impulse spending is to embrace it responsibly. Budget in your impulse shopping. There’s nothing better than guilt-free spending. At the beginning of the month set aside cash in an envelope just for your spending splurges. Just make sure that when the fun money is gone so too is the fun spending.

It’s your turn. What are some of the ways you curb the urge to splurge? How do you tame your impulse spending?

With the high cost of college tuition, every little bit of extra money helps. Google is offering students from underrepresented groups (African American, Hispanic, American Indian, female, or persons with a disability) with an interest in computer science the opportunity to win a $10,000 yearly college scholarship.

According to Google:

The Generation Google Scholarship is a new program for aspiring computer scientists to excel in technology and become active role models and leaders in the field. Selected students will receive 10,000 USD (for those studying in the US) or 5,000 CAD (for those studying in Canada) a year for up to four years (or until graduation, whichever comes first), as long as they maintain criteria for renewal. Recipients will also be invited to attend Google’s Computer Science Summer Institute (CSSI) in the summer of 2012.

Scholarship applicants will be required to submit letters of recommendations, compose three essays, and complete some short answer questions. Interested high school seniors can apply here.

Hurry, application deadline is February 20, 2012.

Control your money or it will control you.

For many of us money is a rebellious teenager. Despite our best efforts it proves difficult to control. Our money comes and goes as it pleases. And worst yet, we’re often too timid, scared or tired to put our money in its place.

Stop being a bystander. Take charge. Give your Washingtons, Jeffersons and Benjamins their marching orders.

Provide each and every one of your dollars with a destination, or as financial guru Dave Ramsey suggests, “give every dollar a name.”

At the beginning of the month sit down and tell your money exactly where it’s going.

Decide which dollars will be used to cover the essentials like rent, transportation, and food. Tell your money how much of it will pay down credit card debt and how much of it will march on over to fund your retirement account. Even decide which dollars will be used for fun and entertainment.

When each dollar understands its mission your financial life will fall into place. Some may call it budgeting. I call it having a plan for success.

Control your money or your money will control you.

While most kids are begging their parents for an allowance, eleven-year-old Maya Penn is making her own way.

With a passion for fashion, the budding entrepreneur has formed her own online company, Maya’s Ideas, to sell her line of eco-friendly accessories.

The young fashionista sews fabric flowers, black lace, and other items onto headbands to create distinctive fashion pieces, and costumers from around the world have been taking notice. They’ve been purchasing her unique fashion creations through Etsy.com, the online arts and crafts marketplace.

She’s even caught the eye of one of the nation’s premiere business magazines. Forbes named her one of their 16 “Grade School Entrepreneurs.”

“I like making people happy with my items,” says the eleven year old entrepreneur.

More importantly she’s a businesswoman with a conscience. The young businesswoman donates 10% of her profits to charities in the Atlanta area.

Now if only our grown-up CEOs could be so forward thinking.

Personal finance is often about perspective. By placing spending in its proper context we can often make better financial decisions.

Take the small purchases that seem so harmless on the surface. Add them up and we might get a different story.

The yearly tab for some of our simple spending habits would probably hit us like a ton of bricks.

It’s all about perspective.

The afternoon trip to the vending machine for a Coke and candy bar seems harmless. But would we change our behavior if we received a $650 “vending” bill at the beginning of the year?

Would we still purchase books from Amazon or Barnes and Noble instead of trekking to the library if we faced a $320 yearly book invoice for our reading pleasures?

Would our morning Starbucks fix still taste as sweet with an annual $1423 price tag attached?

Maybe we’d gain new power to change bad behaviors once we calculated their yearly costs. A $2646 cigarette bill might provide the added incentive to quit.

Try this. Figure out the yearly tabs for some of your small spending habits. Then decide whether or not they’re worth it?

Maybe. Maybe not. The point is, when you put your purchases in a new light, you’re in a better position to re-evaluate the way you spend your hard earned cash.

It’s all about perspective.

What are some of the spending indulgences you might reconsider if you tabulated their yearly costs?

When you’re struggling just to pay the bills, the last thing on your mind is building an emergency fund.

In fact, nearly two-thirds of Americans have less than $1000 in savings.

But just because we’re having trouble making ends meet doesn’t mean fate will pass us by. Washing machines break, car alternators fail, and pipes burst whether we’re struggling or not.

So how do you prepare for those inevitable moments of crisis? I asked some of the experts on Twitter.

@Singlema suggests that people take advantage of the flush times in order to prepare for the lean periods. “In the same way animals prepare for the winter, store up your reserves for when you need them,” she advises. This can be as simple as resisting the urge to spend your income tax refund and instead placing it into savings. Bonuses, pay raises, and financial gifts can also spruce up emergency funds.

Barbara Friedberg (@Barbfriedberg) advises people to make the hard choices. “It’s worth it in the long run,” she says. I completely agree. Of course you may have to sacrifice some of the things you like or have grown accustomed to, but having an emergency nest egg makes it worthwhile. Her final bit of advice: Take it “Bit by bit.”

You don’t have to create your emergency fund all at once. Creating your emergency fund is a work in progress. Saving even $20 or $30 a week allows you to slowly build a cushion of financial security. Small simple changes matter. Consider these tips:

Learn to trim the fat.

You may be struggling and think you don’t have the money, but ask yourself, have you really trimmed all the fat?

I’m amazed when people complain about the state of their finances but then I see them eating out at KFC or McDonald’s. Fast food is nearly two to three times as expensive as home cooked meals.

Super-size you’re emergency fund instead by cooking at home. If you’re pressed for time, cook several meals on Sunday and place them in the fridge or freezer for use during the week. This simple tip alone could easily save you $40 a week.

Likewise, take a close look at the rest of your spending. Scrutinize it with a fine tooth comb.

• Have you called around to negotiate a lower auto insurance rate?
• Are you utilizing all of your cell phone minutes? Could you switch to a cheaper plan?
• Could you do a better job of avoiding the vending machines at work?
• How good have you been at consolidating trips to save on gas?
• Could you switch to a credit union to avoid high bank fees?
• Have you considered visiting the hair salon every three weeks instead of every two?

The truth of the matter is that once you scrutinize each and every expense, you’ll discover ways to save that you never even considered before.

Put the little “luxuries” on hold.

If you don’t have a small emergency cushion saved you shouldn’t even consider going to the movies. Not when you can rent free videos from the library. Same goes with meeting friends for drinks, going out to the club, or engaging in a little “retail therapy.” Building a financial life raft is just too important.

To help with your “luxury fast” realize it’s only temporary. Once you have your emergency fund in place you can always return to the little luxuries you enjoyed so much. Besides, you may just find some new low cost or free ways to have fun.

Sell some of your stuff.

One woman’s junk is another woman’s treasure. You’d be surprised at how quickly your old futon or Ikea shelf sells on Craigslist. Books and textbooks can be sold on Amazon using their third party seller services. Likewise, Ebay and consignment shops can turn your old fashions into cold hard cash.

Find a side-hustle.

Are you a school teacher? Perhaps you did well in college Chemistry 101? If so, tutoring could bring you some nice cash. But don’t only think in traditional terms. Your skills might prove valuable. You’d be surprised at how many people would pay you to teach them how to use WordPress, Photoshop, or Microsoft Excel.

Websites like Craigslist make it easier than ever to advertise your services. Just make sure to meet your clients in a public location.

Freelance writing, reselling vintage clothes you find at thrift stores, pet sitting, and website design are just a few of the other ways could earn some serious money. (For a great read on creating your side-hustle check out the How to Start a Side Hustle series by Rosetta Thurman, founder of HappyBlackWoman.com)

L. Marie Joseph, author of First Generation White Collar, frequently reminds people of the African Proverb: “Save your money and one day it will save you.” When it comes to building an emergency fund no truer words were ever spoken.

Your turn. How do you save for emergencies when times are tough?

A new report released yesterday by the advocacy group Corporation for Enterprise Development (CFED) reveals that a large percentage of Americans are living on the financial edge, just one unfortunate event away from disaster.

“Growing numbers of families have almost no savings or other assets to see them through if they lose their jobs or face a medical crisis,” explained Andrea Levere, president of CFED.

The report, entitled the Assets and Opportunity Scorecard, describes 43% of US households as “liquid asset poor,” meaning they have few financial resources that can be quickly converted to cash in case of an emergency.

The results confirm earlier findings that Americans are increasingly living paycheck to paycheck without significant savings.

Last year research by the National Bureau of Economic Research found that one half of Americans surveyed said they either definitely or probably couldn’t come up with $2000 in 30 days. Similarly, a National Foundation for Credit Counseling survey suggested that 64% of Americans don’t have at least $1000 in savings.

But for households of color, the situation is even more grim. Sixty-five percent of households of color are considered “liquid asset poor”, a situation that can leave them at the mercy of predatory title loan and payday lenders.

Perhaps that’s why financial gurus from Dave Ramsey to Suzie Orman all suggest that creating an emergency fund should be a person’s first financial priority.

Yet, experts worry that since many of these “liquid asset poor” families are receiving regular paychecks they may not grasp how close they are to financial danger. As a result, they may not realize the importance of building emergency savings.

You can download a copy of the Corporation for Enterprise Development’s Assets and Opportunity Scorecard report here.

Marcia Adams stopped at her local Chevron Food Mart to buy her boyfriend a Hershey bar, but she came away with something even sweeter.

While in the store the Georgia couple purchased a Mega Millions lottery ticket worth $72 million just an hour before the drawing.

“It still hasn’t set in,” Adams said after learning of her new found fortune.

Instead of being one of those riches-to-rags lottery tragedy stories, Adams is intent on managing her new found money the right way.

“I’m hiring a financial planner,” Adams told reporters. Any investments she makes will have to be smart ones she asserted. In addition, she’s avoiding the extravagant spending that has gotten other lottery winners in trouble. The only significant purchases in her immediate future are a new house and wedding.

Adams took the cash option which will net her $52 million. But surprisingly, she’s said she will not quit her day job. The corporate accountant told reporters, “I love what I do. I have a purpose.”

Which begs the question, how many of us enjoy our jobs so much that we’d still work after becoming millionaires? Perhaps that’s when you know your job is your passion and not just a 9 to 5?

If you became an instant millionaire, would you still keep your job?

We say we want to save money.

We promise ourselves this will be the year we create an emergency fund or swear up and down we’ll finally set up our IRA or 401K.

But we never quite get around to it. Saving money is harder than we think.

Consider these simple tips for putting more money in your nest egg.

Put your savings on autopilot. There’s an old expression that goes, “You can’t spend what you don’t have.” Every payday have part of your paycheck automatically direct deposited into a special savings account.

Experts suggest ten percent, but times are tough. Start off small if you have to. Transfer 5%, 3%, or even 1% of your paycheck. As time goes by, you can slowly increase the percentage. You’ll become accustomed to living on less as you watch your savings grow.

Find a jar or large piggy bank. Place it someplace prominent. As you return home every evening, simply unload your pennies, dimes, and quarters. By the end of the year you’ll have easily saved a couple hundred dollars or more. Simple and painless.

Want to build your nest egg a little quicker? Consider the dollar game. At the end of the night, reach into your wallet and remove all the single dollar bills and place them in a show box. As the year draws to a close your shoebox will have a nice little stash waiting for you.

If all else fails, eliminate one thing. We have so much. Smart phones, 250 channel cable television, gym memberships, weekly pedicures, dinners out. Pick just one and give it up. Trade your expensive smart phone plan for a basic no-frills alternative or cancel that unused gym membership. Now, instead of making a payment to someone else, apply the new found monthly savings to an emergency fund or rainy day stash.

Your turn. How do you save money? Share your tips. Leave a comment below.