10 Quick Pickups for Your Personal Finances

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If you're like most people, your New Years Resolutions have already expired. You haven't lost 10 pounds, you're not going to the gym five days a week, and when was the last time you called your mother?

Chances are, your financial goals have fallen by the wayside too. I don't want to discourage you from paying down debt, saving a down payment for a house, or any of those big goals that you may have set for yourself at the beginning of the year. But if you sort of tuckered out on the big things (or even if you're still going strong -- go you!), maybe it's time to set some more achievable goals. Here are 10 things you can do in an hour or less apiece to make yourself -- or your household -- more financially sound.

1. Join Mint

I'm an unabashed fan of the site, and not just because they do some great data-mining on their blog. (Don't worry, all at the very aggregate level). It will track and aggregate your spending for you, showing you where the money is going, and what's happening to your net worth over time. If you have sort of complicated finances -- as I do, living in a two-journalist household -- then it's an absolute godsend at tax and expense time. And in the last year they've added goals, allowing you to set your spending, saving, and debt-reduction goals and then track how you're doing with a thermometer. It's surprisingly motivating, and it's free.

I probably spend 20 minutes a week in Mint, categorizing our expenses and monitoring our financial position. But even if you don't put in that kind of time (and most of you don't have to keep track of which meals are tax-deductible), it's still incredibly helpful at tracking the broad outlines of your spending.

2. Get Your Papers Together

If you die, someone is going to have to clean up the financial aftermath. Make it easy on them by putting everything in one place where they can find it. Dave Ramsey calls this a "Legacy Drawer," and suggests putting in a cover letter and letters to your loved ones as well as the financial papers. But we're trying to keep this under an hour, so the notes are optional. Here's what it should contain:

• Insurance papers.

• Loan documents.

• A list of every financial account: loans, bank accounts, investment accounts, 401(k)s, whatever. Security experts will kill me for saying this, but I'd say this list should have the account numbers, the PINs, and the passwords.

• Deeds and titles to any property you own (cars, land, etc).

• Birth certificate and social security card, if you have them.

• Information about your will/estate plans: who has them, who the executor is.

• Funeral instructions (if any; mine are "cheapest coffin you can find").

• Tax returns.

• A list of your major recurring expenses (so people know which bills to pay).

Start by putting this in a drawer; eventually, you should move this to a safe-deposit box, and tell whoever's likely to be taking care of your final details where to find the key. This should only take you an hour -- if it takes you longer than that, well, you really needed to get these documents while you could find them anyway.

3. Buy Life Insurance

If you're single, you don't need this unless you have a kid or someone else depending on you -- your job usually offers you enough to bury you. If you're married, I think you do need a little, even if you don't have kids. Married life is usually built on the expectation of two incomes: a mortgage (or lease), the cars, all sorts of other recurring expenses. At a minimum, make sure your partner will have enough to bury you and pay off any outstanding debt -- including not only mortgages and cars, but credit cards and student loans in their name alone, if you own property. You don't want to have to hassle with someone coming after their half of the house or car to pay off their unsecured debt. Obviously, if your partner is at home, or makes very little money, you're also going to want to replace some of your income.

You do not want "whole life" insurance, "return of premium" or any other product that promises you to give you some or all of your money back -- all this is is a savings vehicle with bad rates of return, bundled with expensive term life insurance. Buy a simple term life policy for 20 or 30 years -- long enough for you to accumulate enough assets to take care of your partner if you die. You can compare rates online or mosey down to your local insurance office, but either way, this shouldn't take you too long provided that you resist the blandishments of insurance agents who will attempt to upsell you "features" you don't need. Stand firm, buy term.

4. Cancel Stupid Recurring Expenses

Remember when you thought you'd try Stamps.com? How about that credit monitoring service you signed up for eighteen months ago? The dual subscriptions to Netflix left over from before you moved in together? For many of you, I am sad to say, your gym membership also falls into this category.

Whatever it is, if you haven't used it in three months, cancel it. Cancel it whether or not you think you should be using it. You can always rejoin the gym after you've developed a burning desire to actually go. With the hundreds of dollars you will save between now and then, you will easily be able to afford any re-initiation fees.

5. Ramp Up for Retirement

Unless you are already at the legal maximum, increase your 401(k) contribution by 1% of your income. Unless you are already pinching pennies so hard that Abraham Lincoln is actually screaming in pain, you can afford to put an extra 1% of your pre-tax income into your 401(k). Then every time you get a raise, you increase your contribution by another 1% until you hit the legal limit ($16,500) or 15-20% of your income. Almost painless, and you'll feel a lot safer in retirement. (Of course, if you want to save faster, you can -- try 2% or 3%).

6. Start Saving

If you don't have an emergency fund, you need one. Here's how to do it so that you almost won't notice: set up an automatic transfer into your savings account from every paycheck. Figure out how much can you afford, but even if it's only $25, transfer it from every paycheck, and resolve not to touch that money unless it's an actual emergency. (Emergency: my car won't start. Not an emergency: I really need a break, so I'm going to the beach for a week.)

The ideal way to handle this is to have a separate account that isn't linked to your other bank accounts, and to have the transfer done as part of your auto-deposit. That way, you never see the money -- and I think you'll be surprised to find that you don't much miss it. But if you don't want to go to the trouble, you can do this with your regular savings account, as long as you're resolved not to touch the money in that account for anything but an emergency: just use online banking to do a recurring transfer on the same day as your paycheck hits the account.

Over time, increase the amount that you're saving. Eventually you'll have a tidy nest egg, and because the money was never in your checking account, you won't have been tempted to spend it on incidentals.

7. Re-balance Your Portfolio

If you already have substantial assets, it's time to make sure they're correctly structured for your priorities. Are your mutual funds allocated the way that you want them, or over time, has one grown faster than the others, leaving your portfolio lopsided (many companies now automatically re-balance, but you should check.) You should also be thinking about your portfolio's life-cycle. If you're in your fifties, you should already be transitioning some of your money to bonds.

I know what you're going to say: you'll never be able to retire at those kinds of returns. My response is a piece of wisdom that I picked up from my driving instructor: "If you left late, you're going to get there late." Trying to flout that simple equation only gets you in trouble. Just as it's a bad idea to race through red lights in the hopes of making up the lost time, it's a bad idea to leave your assets in 100% equity because you're hoping that higher returns will still let you retire in comfort at 65. Risking destitution now is just compounding your earlier planning errors.

8. Make a Will

If your finances are pretty simple, you can do this in half an hour with something like Quicken Willmaker, which took Lifehacker half an hour. LegalZoom will also do it for you for a pretty modest fee. If your finances are complicated -- well, OK, this won't take under an hour, and you need a lawyer. But if your finances are complicated, you really need a will. If it freaks you out too much to meditate upon your own death, pretend that you are preparing this will so you can drop out of sight and assume your new identity as Agent 007 of Her Majesty's Secret Service.

9. Fix Your Withholding

Are you looking forward to a nice big refund from the IRS this year? Don't look so happy -- that refund means that you made the government an interest-free loan for most of the year. And if you're like many freelancers, and you owe the government a hefty chunk, then you may be liable for interest and penalties.

The easy way to fix either problem is to adjust your withholding. HR can help you do this. If you're getting a big refund every year, raise your exemptions; if you're having to pay, lower them. (If they're already as low as they can get, look at what you owe this year, adjust for what you'll owe next year ... and start making estimated payments every quarter.)

10. Shop for Better Deals

Can you get a better interest rate on your credit cards? How about your bank accounts? You don't have to follow through, if you decide it's not worth it. But it's worth taking 15 minutes on the web to find out. Also worth doing: threaten to cancel your cable. You don't have to actually do it -- though with Netflix and Hulu and Amazon Prime's new subscription service, it's possibly worth it. But if you call to cancel, they'll usually offer you a better deal.

That's how things stand right now. Keep in mind that any subject can change over time, so be sure you keep up with the latest news.

AP-GfK Poll: Opposition to health care law eases

If you have even a passing interest in the topic of , then you should take a look at the following information. This enlightening article presents some of the latest news on the subject of .



If you find yourself confused by what you've read to this point, don't despair. Everything should be crystal clear by the time you finish.

WASHINGTON (AP) -- As lawmakers shaken by the shooting of a colleague return to the health care debate, an Associated Press-GfK poll finds raw feelings over President Barack Obama's overhaul have subsided.

Ahead of a vote on repeal in the GOP-led House this week, strong opposition to the law stands at 30 percent, close to the lowest level registered in AP-GfK surveys dating to September 2009.

The nation is divided over the law, but the strength and intensity of the opposition appear diminished. The law expands coverage to more than 30 million uninsured, and would require, for the first time, that most people in the United States carry health insurance.

The poll finds that 40 percent of those surveyed said they support the law, while 41 percent oppose it. Just after the November congressional elections, opposition stood at 47 percent and support was 38 percent.

As for repeal, only about one in four say they want to do away with the law completely. Among Republicans support for repeal has dropped sharply, from 61 percent after the elections to 49 percent now.

Also, 43 percent say they want the law changed so it does more to re-engineer the health care system. Fewer than one in five say it should be left as it is.

"Overall, it didn't go as far as I would have liked," said Joshua Smith, 46, a sales consultant to manufacturers who lives in Herndon, Va. "In a perfect world, I'd like to see them change it to make it more encompassing, but judging by how hard it was to get it passed, they had to take whatever they could get."

His extended family has benefited from the law. A sister-in-law in her early 20s, previously uninsured, was able to get on her father's policy. "She's starting out as a real estate agent, and there's no health care for that," said Smith. The law allows young adults to stay on a parent's plan until they turn 26.

Congress stepped back last week to honor victims of the rampage in Tucson, Ariz., that left Rep. Gabrielle Giffords, D-Ariz., facing a long and uncertain recovery from a bullet through her brain.

There's no evidence the gunman who targeted Giffords was motivated by politics, but the aftermath left many people concerned about the venom in public life. A conservative Democrat, Giffords had been harshly criticized for voting in favor of the health overhaul, and won re-election by a narrow margin.

House Republican leaders say they're working to keep this week's debate -- and expected vote Wednesday -- from degenerating into a shouting match, but it depends on the Democrats, too. Republicans want a thoughtful discussion about substantive policy differences, said Brad Dayspring, a spokesman for Rep. Eric Cantor, the No. 2 GOP leader. The AP-GfK poll was under way when the attack in Tucson took place Jan. 8.

Opposition to the law remains strongest among Republicans. Seventy-one percent of them say they're against it, as compared with 35 percent of independents and 19 percent of Democrats. Republicans won back control of the House partly on a promise to repeal what they dismissively term as "Obamacare."

"I just think that the liberal left is more going for socialized medicine, and I don't think that works well," said Earl Ray Fye, 66, a farmer from Pennsylvania Furnace, Pa., and a conservative Republican. "It just costs too much. This country better get concerned about getting more conservative."

One of the major Republican criticisms of the law found wide acceptance in the poll, suggesting a vulnerability that GOP politicians can continue to press.

Nearly six in 10 oppose the law's requirement that people carry health insurance except in cases of financial hardship. Starting in 2014, people will have to show that they're covered either through an employer, a government program, or under their own plan.

Rich Johnson, 34, an unemployed laborer from Caledonia, Wis., said he thinks the heart of the law is good. "The problem I have with it is mandating insurance so that you have to have it or you'll get fines," said Johnson, an independent. "I just don't think people should be forced to have it. The rest of it, I have no problem with."

The individual mandate started out as a Republican idea during an earlier health care debate in the 1990s. More recently, Massachusetts enacted such a requirement under GOP Gov. Mitt Romney and the Democratic Legislature. Nowadays, most conservatives are against it, and GOP state attorneys general are suing to have the mandate overturned as unconstitutional.

Other major provisions of the law, including a requirement that insurers accept people with pre-existing medical conditions, got support from half or more of the public in the poll.

Loralyn Conover, 42 a former music teacher with multiple sclerosis, says she hopes repeal goes nowhere. Senate Democrats say they'll block it.

The new law "opens the door for people like me to have some kind of pay-as-you-go health insurance," said Conover, of Albuquerque, N.M. "It's nice to be able to have something . and not be dropped in the cracks of society." She couldn't get health insurance when she was first diagnosed, but is now covered by Medicare.

The AP-GfK Poll was conducted Jan. 5-10 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide, and has a margin of sampling error of plus or minus 4.2 percentage points.

The day will come when you can use something you read about here to have a beneficial impact. Then you'll be glad you took the time to learn more about .

Jump in hiring sends bonds lower and stocks higher

When most people think of , what comes to mind is usually basic information that's not particularly interesting or beneficial. But there's a lot more to than just the basics.



You can see that there's practical value in learning more about . Can you think of ways to apply what's been covered so far?

NEW YORK (AP) -- A surprising jump in hiring sent bond prices lower and lifted the dollar Wednesday. The Dow Jones industrial average edged higher for the third straight day of the new year.

A survey from payroll processor ADP found that private companies added 297,000 jobs last month, nearly triple the number that economists were expecting. The report is the first chance for investors to see how strong the job market was in December.

The next look comes Friday morning when the Labor Department releases its monthly report on total U.S. payrolls and the unemployment rate. Economists expect the rate will dip to 9.7 percent from 9.8 percent.

The unexpectedly high jobs survey from ADP suggests that the Labor Department report will also be strong. But economists cautioned against reading too much into the ADP figures, which also take into account weekly figures on claims for unemployment insurance, said Thomas Simons, market economist at Jefferies & Co.

"When the ADP number comes in strong, it doesn't mean all the other labor reports will come in strong," Simons said. "But it does show that the labor market is improving. You have to take all these numbers together and come up with a mosaic view."

Signs that the economy is improving weakened demand for low-risk investments. Treasurys prices slid, pushing their yields higher. The yield on the 10-year Treasury note rose to 3.47 percent from 3.33 percent late Tuesday. The yield helps set interest rates on many kinds of loans including mortgages.

The higher rates in the Treasury market helped push the dollar up against other currencies. The dollar rose 1 percent against an index of six other currencies.

The Dow gained 31.71 points, or 0.3 percent, to 11,722.8. It closed at its highest level since August 11, 2008.

The Standard & Poor's 500 index rose 6.36, or 0.5 percent, to 1,276.56. The Nasdaq rose 20.95, or 0.8 percent, to 2,702.20.

Financial companies led the 10 groups that make up the S&P index with a 1.2 percent gain. Utilities did the worst, losing 0.6 percent.

American Express Co. rose 2.9 percent to $45.04, the largest increase among the 30 stocks that make up the Dow. Intel Corp. had the largest fall, slumping 1 percent to $20.94.

A survey from the Institute for Supply Management showed that service companies reported more new orders and higher prices last month. The ISM's monthly index measuring the economic strength of U.S. service providers rose to its highest level since May 2006.

Service providers such as retailers, hotels, banks and construction companies employ about 80 percent of the country's work force. But their growth has lagged behind manufacturers since the recession ended June 2009.

Qualcomm Inc. rose 2.1 percent to $52.03 after the technology company said it had agreed to buy chip maker Atheros Communications Inc. for $3.2 billion. The deal is aimed at giving Qualcomm, which makes chips for cell phones, a foothold in the growing market for tablet computers.

BJ's Wholesale Club Inc. fell 2.2 percent to $45.96 after the retailer said it would cut jobs and close five stores.

Two shares rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 4.8 billion shares.

Now that wasn't hard at all, was it? And you've earned a wealth of knowledge, just from taking some time to study an expert's word on .

In the trenches: The holiday crush at J.C. Penney

NEW YORK (AP) -- It's hard to keep up with Joe Cardamone.

J.C. Penney's Manhattan store manager, dressed in a suit and tie and wearing comfortable Florsheim black shoes, walks quickly, talks quickly and works quickly. At 4:30 in the morning, he gets to the store to make sure every detail is in place. The bigger challenge? Keeping those details in line on a day when 15,000 to 20,000 customers would storm the place on the busy last shopping weekend before Christmas.

"In my mind, we're ready for it," said Cardamone, standing in his basement level office at the Manhattan Mall, at 5 a.m. Saturday, an hour before the opening. "But how good is good?" The goal is to beat last year's revenue figures, which he described were "fair."

"Hopefully, they'll leave with bags in their hands," added Cardamone, a 36-year-company veteran, who started out as a stock boy at age 16.

The stakes are high. If Thanksgiving weekend is opening night for retailers, the final stretch before Christmas is the finale. With the countdown getting shorter, so is shoppers' patience. A 20-minute wait at the register or frustration of not being able to find the right sweater size for their mother can quickly turn them off to a retailer forever.

So little things matter. Cardamone clutches the walkie-talkie he uses to stay in constant touch with his team. They've got to make sure bathrooms and fitting rooms are kept tidy. Racks of clothing that are growing empty need to be quickly replenished. It's everybody's job to serve shoppers.

Cardamone isn't above helping out shoppers himself, leading them down escalators to the piles of thermal underwear. For J.C. Penney Co., whose business has lagged competitors like Macy's, it's particularly important.

Nowhere is that fight more visible than in Manhattan, where Penney opened a few blocks away from Macy's storied flagship store (the one in the movie "Miracle on 34th Street"; Penney is on 33rd Street) almost two years ago. Penney has to sell twice as many items as Macy's because the average item retails for half as much, Cardamone says.

The Associated Press shadowed Cardamone from 5 a.m. until 8 a.m. on Saturday, and then went back a few hours later, when crowds peaked.

Here's how the day fared:

5 a.m.: Cardamone, who lives in Danbury, Conn. but stayed at a hotel near the store the night before, is at his desk. He glances at the weather reports. About 150 big carts of clothing, from children's wear to accessories, clog the hallways of the basement offices. Most of 22,000 items delivered the night before had been unloaded on the floors. The store doesn't have its own warehouse so there's not much wiggle room for making big merchandise mistakes.

Cardamone says the big sellers will be women's and men's clothing, particuarly sweaters and coats, with children's clothes and shoes taking a back seat. The jewelry department should also be packed. The big concerns, he says, are popular sizes running out, and not being able to give customers something they can walk out with.

5:30 a.m.: Cardamone walks through the two-level store with Jill Groce, general merchandise manager, and Kirk Bell, district manager.

"I'm looking for emptiness," he says.

He soon finds some empty racks in the fleece sleepwear area, and calls Bill Pandolfo, sales support manager, on his walkie-talkie to make sure it's replenished quickly. He checks out the bevy of early morning specials on display, including an assortment of $18.99 griddles marked down from $48.99.

"We'll sell a couple hundred of those," he says.

5:45 a.m.: Cardamone huddles with several merchandise managers to fire them up. "It's more than, 'Hey, how are you?' It's about what can I help you with? You have to be free to help."

5:56 a.m.: Cardamone and other executives gather 80 staffers and offer some final reminders before the store opens: Help customers so they can get them out quickly -- and don't point. Lead the customers to what they want. If shoppers can't find something, steer them to the store's website or gift cards.

At the end, they lead an loud and enthusiastic cheer that echoed through the store: "Happy holidays! JCP NYC! Go team!"

6:05 a.m.: Ruby Booker, 63, of Queens, is among the first customers. She's looking for boots, pants and tops. "I'm trying to keep to a budget," she says. She also encounters one of the day's first problems: She can't find the right size in a particular sweater.

6:30 a.m.: Cardamone has already been around the store floor several times. He returns to his office for a Pepsi. "I feel good," he says. He'd better; it's still just the first mile of a marathon.

6:38: Cardamone meets with Waldina Olivera, who oversees staffing, on the sales floor to make sure workers are where they need to be. The store staff will swell to 250 by the day's peak in the afternoon.

6:45 a.m.-7:08 a.m.: Cardamone walks by the home area, then scans clearance racks marked 60 percent off. "This will be heavily shopped today," he said. He spots skimpy offerings of teen scarfs and quickly dispatches an employee to fill them back up.

7:11 a.m.: Cardamone meets with an employee make sure fitting rooms are clean. "Restrooms need to stay perfect," he says. Customers start to steadily file into the store.

7:36 a.m.: Victor Mercado, 48, is sitting on a bench, thumbing through the Penney's flyer. "Want to make sure I'm not missing anything," says Mercado, who showed up at 6:30 a.m. and already has bags filled with sweatshirts and tops for his brothers, brother-in-law and son. He says he only spent $100 and will have to go back another day this week to buy holiday items for his wife. He's on a deadline; he has to be to work by 9.

8 a.m. The crowds increase. Cardamone is eyeing shopping bags to see how filled they are. He says the goal is to have shoppers leave with two or three items.

11 a.m.: The crush of customers has started to take a toll on the store. Some sweater displays look particularly dissheveled.

Noon: It's showtime now. The store is jammed.

Cardamone is watching how the lines are moving and greets sales associate Lemar Poindexter, wearing a Santa hat. Poindexter is handing out water bottles and candy canes to customers in line. "Customers should only wait a minute" in line, Cardamone says. He's confident it's about that, but it looks like it could be more.

12:15 p.m. Cardamone notices Penney is almost out of $5.99 holiday bears and dispatches an associate. The store has sold more than 1,000 so far this season. There won't be any more bears on Saturday, but they'll be replaced by other toys in the afternoon.

12:30 p.m. Cardamone goes upstairs to Manhattan Mall's lobby to find out how the signups for Penney's credit cards are doing and says the store has sold more than 100 gift cards that day.

12:45: "You seem lost? Are you OK?" Cardamone asks a customer. One snafu occurs. An associate approaches him to inform him the accessories register is down again. Cardamone asks them to bring up another one.

12:50 p.m. Customer Lois Green approaches Cardamone to inquire about thermal tops she saw advertised in the flyer. He takes her to the Hanes thermal underwear section. "I remember you. You helped me with my shoes last week," she says. She turns to the reporter: "I wear a size 11, and he took me around to find a pair." But the Hanes items aren't exactly what she's looking for.

Cardamone leads her to another section of the store and shows her thermal tops for $9.99 under the South Pole brand.

Green scoops up two. Another crisis averted.

Shoppers crowd the malls in Christmas countdown

NEW YORK (AP) -- Packed malls? Healthy gains in holiday spending? It's beginning to look at least a little like a pre-recession Christmas.

Americans spent more on clothing, luxury goods and even furniture, delivering healthy gains across the board, according to MasterCard Advisors' SpendingPulse, which tracks spending across all transactions including cash. The online category continued to be a bright spot. The big exception was consumer electronics, dragged down by deep discounting of TVs amid a glut. That area was virtually unchanged from a year ago.

"This is the first normal Christmas in three years," said Michael McNamara, vice president of research and analysis for SpendingPulse. He said there is "genuine demand" for a variety of products, even higher-ticket items.

Sales of clothing rose 9.8 percent, with particular strength in men's clothing. Jewelry revenue rose 2.6 percent and furniture rose 3.4 percent, according to SpendingPulse, whose data covered the period from Oct. 31 through Saturday compared with the same period a year ago.

Malls reported higher traffic over the weekend, including the Saturday before Christmas, known as "Super Saturday." It's one of the busiest shopping days of the year. Research firm ShopperTrak expects it will be the third-busiest this year. The lack of any major storms nationwide was a boon for shoppers.

The strong numbers are encouraging to retailers, who only this fall remained worried that the inventory they ordered earlier in the year when the economic recovery looked stronger might end up being too much.

But after a slowdown in spending this summer, spending has picked up amid more positive economic signs. McNamara said that there's no evidence of emergency discounting and that stores have appropriate levels of inventory.

Robin Lewis, CEO of The Robin Report, a retail insiders' newsletter, said the spending stems from three factors: consumers have been paying down their debt slightly, the savings rate has decreased slightly and working hours have increased, partly due to seasonal demand.

"Those three things put a few more bucks in their pocket," which becomes signficant combined with pent-up demand.

Still, spending is still below pre-recession levels in many categories. McNamara estimated that furniture is about 20 percent below the level before the Great Recession, while luxury and jewelry sales are about 10 percent below the peak before the big downturn. Clothing sales are recovering faster.

At the Mall of America in Bloomington, Minn., the nation's largest mall, Public Relations Director Dan Jasper said a big snowstorm the weekend before that closed the mall early had shoppers packing the mall to catch up. Preliminary reports showed 200,000 came to the mall Saturday, making it one of its busiest days ever and the busiest day so far this year.

"People are a little panicked. I'm hearing them say 'We've gotta get this done,' and that doesn't usually show up until the 22nd or the 23rd."

It wasn't the only mall that saw packed stores and parking lots. Greg Maloney, CEO of the retail practice of Jones Lang LaSalle, which operates about 90 malls across the country, said traffic was up 10 percent to 12 percent across the country over the same weekend last year.

Karen MacDonald, a spokeswoman for Taubman Centers Inc., which owns or manages 26 shopping centers, said many stores were reporting higher traffic.

Most shoppers still had about half their Christmas shopping left heading into the weekend, according to the National Retail Federation trade group. It raised its holiday sales forecast last week to a 3.3 percent rise, approaching 2007 levels, from an earlier forecast of a 2.3 percent increase.

In an interview with The Associated Press last week, Myron E. Ullman III, chairman and CEO, noted that he feels good about the holiday season so far, and that inventory is in line with demand. Like many other retailers, Penney had slim offerings last Christmas because it worried about having too many leftovers. Consequently, many merchants, including Penney, sold out of some items earlier in the 2009 Christmas season.

"People seem to be feeling better," he said.

Shoppers stuck to lessons learned during the recession: using cash, not credit, and sticking to a budget. Although they are spending slightly freer, with unemployment still stuck at 10 percent and a strained housing market consumers are still under pressure to spend wisely.

"The consumer has returned, not blindly, but thoughtfully," said Stifel Nicolas analyst Richard Jaffe.

"I have a budget and when it's gone, it's gone," said Nicala King of Vancouver, Wash., who was at Barnes & Noble picking up a few final items. She was set on preserving the savings she built up after paying off her credit cards last year.

Retailers are offering promotions that are more planned than last year, Wall Street Strategies analyst Brian Sozzi said.

Ann Taylor Loft, for example, has had a 40 percent off promotion in its stores since Black Friday, although on Saturday it increased that to 50 percent off for sweaters.

"It's not slash-and-burn on prices, but promotions are out there, and that is one of the main ingredients driving sales," he said.

Online shopping was going strong as well. On Saturday, online retail spending rose 18 percent, and the average order size rose 4 percent to $169.04 compared to the same day a year ago, according to IBM Coremetrics. As of Friday, shoppers have spent $27.46 billion online since Nov. 1, up 12 percent from last year, according to research firm comScore Inc.

Paul and Connie Surface drove about 60 miles Saturday from their Waveland, Ind., farm to downtown Indianapolis to buy a bottle of Coach Inc.'s Poppy perfume for their daughter-in-law and take in the mall scene. They've shopped every weekend since Thanksgiving and are pretty much finished.

"This is not a bad economy if you've got a job," said Paul, 62. "The stores are discounting nice, and the interest rates are low."

AP Business Writers Sarah Skidmore in Portland, Ore.; Anne D'Innocenzio in New York; and Tom Murphy in Indianapolis contributed to this report.

The worst performed the best in this bull market

NEW YORK (AP) -- The daredevils are winning big this year.

Investors who bought the riskiest stocks when the economic recovery was in doubt this year are clocking the biggest gains. Among them: stocks from companies at risk of defaulting on their debt, ones already priced high and those that other investors bet would drop fast. Returns from this dicey lot are as much as double the gains in the broad market.

"Greed is increasing, and people are going to risky stocks for higher return," says Paul Hickey, co-founder of stock researcher Bespoke Investment Group.

Consider shares of companies that rating agencies think could stiff lenders. Stocks of so-called junk-rated companies rose 19 percent from the start of the year through Dec. 16, according to Bespoke. By comparison, those of stable and flush companies with ratings of AA or higher returned six percent.

One possible reason risky stocks are booming: the stop-and-go economic recovery. The idea is that some investors who buy risky shares in recoveries held back earlier this year out of fear this one would stall. Now they are jumping in and that is extending the rally. Typically, riskier stocks rise the most early in recoveries because they fall the most in the recessions preceding them. During a recession, investors figure high-risk companies won't churn out profits or even stay in business. But then bargain hunters pounce on the survivors in anticipation of better times and the stocks climb fast -- for a while at least. Eventually, investors shift money into bigger, more stable companies called blue chips as the recovery gathers steam.

But this time, 21 months into the rally, investors still prefer the dangerous over the dull.

"We spent most of the year worried about earnings and a double dip," says Mark Bronzo, manager of Security Global's big company fund. But then "earnings came in better than expected and people are playing catch-up."

The danger now is that small investors who are edging back into stocks will buy these high flyers just as the trend breaks and prices fall.

Investors are "pulling money out of bond funds but where is the money going?" says Steven Ricchiuto, chief economist at Mizuho Securities. "We've had a huge run. I'd get more defensive now."

Conventional wisdom says that at this point in the bull, investors should avoid stocks priced high compared with their earnings. A low price-earnings ratio suggests a stock is a bargain. But if you followed that strategy, you would have missed out on big returns this year. The 10 percent of stocks in the Standard & Poor's 500 index with the highest price-earnings ratios at the start of the year returned 23 percent through Dec. 16, according to Bespoke. That was eight percentage points higher than the return for stocks with the lowest price-earnings ratios.

Likewise, stocks that Wall Street traders targeted for so-called short sales have shot up. In a short sale, an investor bets against a stock by borrowing shares and selling them. If the stock falls, the investor can buy back the shares and return them to the original owner, pocketing the difference. But the 10 percent of stocks in the S&P 500 that attracted the most short sales at the start of the year are up 26 percent, according to data provider FactSet. Those with the least short sales rose 17 percent.

Another winner in the stop-and-go economy: stocks of so-called cyclical companies whose profits are bound up tightly with economic cycles. Consumer discretionary companies like toy maker Mattel Inc., for instance, gained 90 percent last year from their lows as investors anticipated that people would spend more on non-essentials. Then prices kept rising, up another 25 percent this year. What's more, they've trounced stocks of non-cyclicals whose sales are steadier and should be outperforming now. Stocks of consumer staple providers like Campbell Soup Co. have returned 11 percent.

Stocks of small firms are beating stocks of big companies, too. Big companies are thought safer because they sell many products and services in many countries and can tap various sources to finance themselves. Yet the S&P Small Cap 600 index, after returning 85 percent last year from its March low, is up another 24 percent in 2010. That's more than double the 11 percent gain in the S&P 500, a large-company index.

"These things go in cycles," says USAA stock manager Arnold Espe of the small-stock outperformance. "We think we're at an inflection point."

Alas, some experts were saying the same thing 10 months into the rally a year ago.

Pioneer Investments' John Carey owns Pfizer Inc. and Eli Lilly & Co., drug makers with fat dividends but whose stocks have been hurt by fears that President Barack Obama's health care plan will eat into profits. A shift by investors into blue chips, which he figures is already six months overdue, would have helped lift those stocks. No dice. Pfizer is down 2.1 percent so far this year while Eli Lilly is up 4 percent, a third of the S&P 500's gain.

"During the course of a bull market, people start focusing more on dividends and earnings" but that hasn't happened, Carey says. But he adds, "I'm a patient investor."

Gawker hack underscores flaws with passwords

SAN FRANCISCO (AP) -- The fallout from a hacking attack on Gawker Media Inc. a week ago underscores a basic security risk of living more of our lives online: Using the same username and password for multiple sites is convenient, but costly.

After the attack on the publisher of such blogs as Gawker, Gizmodo and Jezebel exposed account information on as many as 1.4 million people, several unrelated companies had to freeze their accounts and force users to reset passwords.

Gawker Media itself didn't have all that much sensitive information about its users. But the usernames and passwords obtained there could open doors to more valuable accounts elsewhere, including e-mail and banking.

Twitter, Google Inc. and Yahoo Inc., among others, saw the potential damage and began resetting their passwords en masse, disrupting users as they tried to check their e-mail or post a tweet.

"It shows one of the fundamental problems with passwords -- they get reused and shared across multiple sites," said Jeff Burstein, a senior product manager with the Symantec Corp. security firm.

Despite repeated warnings from security companies not to do so, users tend to reuse passwords anyway because they can be hard to remember and manage. Users may have dozens, perhaps hundreds, of accounts -- for e-mail, Facebook, Twitter, e-retailers, banks and the growing number of news websites and blogs requiring registration.

Although account information gets compromised all the time, the infiltration of Gawker's servers is noteworthy because the hacked data were posted online, for free. In most other breaches, the stolen data are never made public, but sold underground to criminals.

Because the databases were freely available, other sites were able to score the data and look for matches with their users.

Twitter acknowledged resetting some passwords for its 175 million users after hackers used the Gawker data to break into Twitter accounts and pump out links to a site selling acai berry drinks.

At least two of the biggest web e-mail providers, Yahoo and Google, also reset some passwords. Neither would say how many of its users were affected. Google described it as a "small subset" of its users.

Job-networking service LinkedIn also changed a small number of its 85 million users' passwords.

Some websites said the breach didn't affect them because they don't rely solely on passwords.

JPMorgan Chase & Co. said it didn't have to change any passwords because the bank has "multiple layers of security."

Banks typically require security questions and other challenges beyond just usernames and passwords to get into their sites, particularly when someone logs on from a specific computer for the first time.

So what can be done to better protect consumers? Security experts say the Gawker breach shows that it's time to move beyond passwords.

But people are used to needing only usernames and passwords to log onto accounts, and piling on more layers of security can be a hassle.

Many sites are trying to do the best with what they've got and what they think their users will accept. They require strong passwords that are tough to break with "brute force" attacks -- using computers to keep trying commonly used passwords against an account until one works.

But those requirements have made it harder for people to remember their passwords, and that increases the likelihood that they'll be used across multiple sites.

Security tools that take advantage of smart phones can make it harder for strangers to break into your accounts. You're given a code through your phone to enter on the website with your password. That way, the website knows it's not a hacker, who wouldn't have access to your phone.

Burstein said imposing additional layers of security on users can backfire if the measures are too cumbersome, but added that the push for mobile phone security applications has been well received.