As President Bush takes our country's stock in the State of the Union address tonight, we encourage you to check the state of your own financial affairs.

As he touches upon a possible war with Iraq, see what it might mean for you and your investments.

When he mentions his $674 billion "growth and jobs" proposal, including removing the double taxation of dividends, read more about the controversial move and how it would affect America's corporations.

When he delves into the rising costs of health care, check out nine ways to reduce your medical expenses.

And finally, check the state of your union -- your romantic union, that is. Smooth out any unsettled business on the home front so you're not facing more wars than necessary this year.

In today's Motley Fool Take:

Kiss Debt Goodbye

"Buh-bye, double-digit interest rates. So long, fat-cat fees." If that's your New Year's resolution rallying call, then here's some help.

First off, here are some mind-boggling but strangely comforting statistics for those feeling the pinch of plastic. Americans owe $722 billion on their credit cards, as of December 2002. The Federal Deposit Insurance Corp. reported the nation's banks charged off $3.9 billion in credit card loans during the third quarter, a 34.5% increase compared to third quarter 2001. A record level of U.S. mortgage holders lost their homes to foreclosure in third quarter 2002.

Bummer, eh? Still, those stats show that if you're struggling with debt, you're not alone. Meet fellow debtors and folks who have successfully paid off hundreds of thousands of dollars on our Managing Credit/Credit Cards discussion board. It's a virtual support group at your disposal!

Here are some other simple steps to help you destroy the debt demons:

  • Lower your interest rate -- immediately. Call up your lender and ask them to give you a competitive rate. If they won't play ball, then look elsewhere for a better deal. (We offer a card with a 0% balance transfer option. See if you qualify.)
  • We created this Debt Destruction Kit to help organize your attack plan and quash any spending cravings that sneak up at inopportune times. Fools just love the Stop Spending Sleeve. Print it out and attack!
  • Expecting a check from Uncle Sam this tax season? What a great gift to yourself. Now send it along to Mr. Visa. We promise you won't miss it.
  • For extra incentive, we offer (for free!) our Get Out of Debt Guide, with a handy downloadable workbook to help track your amazing progress.
  • Get the wheels in motion toward a perfect credit score. Check out our new FICO 850 Achieving Perfect Credit online guide. You'll be the envy of all.

This is just one of the many resolutions we can help you conquer this year. Find simple ways to spend less, make more, retire in comfort, become a better investor, and more in our Financial Resolutions Center.

Quote of Note

"Credit buying is much like being drunk. The buzz happens immediately, and it gives you a lift. The hangover comes the day after." -- Dr. Joyce Brothers

P&G's Squeaky-Clean Q2

Consumer-products giant Procter & Gamble(NYSE: PG) reported solid second-quarter earnings this morning. In the wake of a shaky economy, the maker of Ivory Soap, Tide detergent, Cover Girl makeup, and Pampers diapers (just to name a few) continues to execute well.

Total sales grew 6% to $11.01 billion. Unit volume increased at a faster clip, tacking on 8% growth. That reflects some pricing pressure in some of P&G's brands, which is not surprising given the ever-vicious Diaper War with rival Kimberly-Clark(NYSE: KMB).

P&G earned $1.49 billion during the quarter, or $1.06 a share, ahead of last year by 15%. In the previous quarter, the Dow component earned $1.3 billion, or $0.93. Stripping out restructuring charges, P&G's core earnings were $1.13 per share, compared to last year's $1.03.

On the free cash flow front, P&G is well on its way to beating fiscal 2002's $6.29 billion. Through the first six months of the current year, it's generated $3.71 billion of free cash flow, 48% ahead of what it banked during last year's first half. The company's cost-cutting and restructuring program is definitely fattening its pockets.

Looking ahead, P&G sees the love continuing. Customers will keep lathering up with Herbal Essences shampoo (despite those bizarre commercials), chowing down on Pringles chips, splashing on some Giorgio Beverly Hills perfume, and brushing with Crest. All this will result in a unit volume rise for the third quarter between 6% to 8%, and a sales increase in the mid-single digits. Core earnings should improve 11% to 13%.

Investors looking for a stable company with a cupboard full of everyday products should give P&G a thorough once-over. (To read more about P&G, check out this recent Drip column written by our beloved Rex Moore.)

Shameless Plug: Need Help Planning for 2003?

Are you looking for personal attention from an expert financial planner? If so, TMF Money Advisor might be for you. You'll also get access to our crash courses, self-paced online seminars, a monthly letter from our co-founders, your own online planning tool, Fool product discounts, and, yes, you guessed it, full access to The Motley Fool's discussion boards.

Merck Works It

Most press covering Merck(NYSE: MRK) the past five years mentioned that several of the company's major drugs would hit patent expiration early this century. That became the standard way to introduce the company. However, while five patent expirations in 2000 and 2001 slowed drug sales, Merck has weathered the storm.

Today, Merck announced 2002 earnings per share of $3.14, flat with 2001, on a 9% rise in consolidated sales. The better news is that management increased earnings guidance for 2003 to $3.40 to $3.47 per share, representing 10% net income growth. Double-digit earnings growth in its core pharmaceutical business is anticipated.

At $53 per share, the second-largest U.S. pharmaceutical company trades at 16.8 times trailing earnings and 15.3 times 2003 estimates. Its $120 billion market value is 17 times free cash flow for October 2001 to October 2002. The stock is flat with prices of five years ago, and yields 2.8%.

One reason Merck remains discounted to peers such as Pfizer(NYSE: PFE) and Johnson & Johnson(NYSE: JNJ) is that its best-selling drug, cholesterol-buster Zocor, will start to come off patent on Dec. 26, 2005. The drug is expected to clear about $5.7 billion in sales this year, or 20% of Merck's drug revenue.

The company's pipeline continues to be less robust than investors would like, but a wave of new products is scheduled to launch by 2005 and after (at least, as well as can be scheduled), and should help offset Zocor's losses. Three new drugs may launch this year, and existing drugs continue to grow sales. Singulair, for asthma, grew sales 19% last year to $1.5 billion. The market is much larger. Vioxx, for arthritis, grew sales 8% to $2.5 billion. Higher hopes remain for the drug.

Merck plans to spin off its Medco prescription business this year, which accounts for $30 billion of its $50 billion in annual sales. What's left is pharmaceutical sales, which have grown from $14.2 billion in 1997 to $21.4 billion in 2002, about an 8% compound annual growth rate. Merck is working hard to keep that growth rate, and thus keep its valuation.

Discussion Board of the Day: Living Below Your Means

Online retailer has thrived thanks to bargain hunters looking to strike good deals on closeouts. Are you pinching pennies? Would you like to learn how to spend less than you earn? All this and more -- in the Living Below Your Means discussion board. Only on

Quick Takes

With mortgage rates dragging the river and housing starts through the roof, it shouldn't come as much of a surprise that mortgage brokers are rolling in the money right now. American Home Mortgage(Nasdaq: AHMH) saw revenue levels double in the fourth quarter on the way to earning $0.80 a share. The only real surprise here is how slow analysts have been to keep up with the trend. Wall Street was expecting the company to earn just $0.63 a share. Don't they know? The house always wins.

Speaking of which, gaming operator Station Casinos(NYSE: STN) reported higher earnings on flat revenue growth to close out its fiscal year. The company also provided its first glimpse into what 2003 should bring. It expressed comfort with analysts' bottom-line projection of $1.07 a share. In other words, analysts don't have to fold or raise their projections.

In a farewell to ARM, British microprocessor specialist ARM Holdings(Nasdaq: ARMHY) saw its fourth-quarter profits tank. Industry skittishness and the unpredictability of future licensing fees find the company warning that revenues should be "flattish for the foreseeable future." Flattish? What a quaint way to describe the woe.

New York Times Co. (NYSE: NYT) beat out profit projections in reporting earnings of $0.69 a share on $840.2 million in revenue. That's quite the headline for an industry that's starting to bounce back from the weak ad dollar.

And Finally...

Today on

Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim