“A lesson every grad needs: personal finance - USA Today” plus 3 more |
- A lesson every grad needs: personal finance - USA Today
- Kara McGuire - Minneapolis Star Tribune
- On Personal Finance: 'Average Joes' still stuck in an ... - Philadelphia Daily News
- You really are richer than you think - Globe and Mail
| A lesson every grad needs: personal finance - USA Today Posted: 05 May 2010 01:28 AM PDT
| In a few years, they'll be calling radio talk show hosts like Clark Howard and Dave Ramsey, pleading for advice because they're out of work and upside down on a $30,000 car loan, or buried under $75,000 in college loans for a graduate degree that turned out to be useless, or finding out that financing a small business with credit cards is not a viable long-term plan. FICO and fraps It will happen because most of our schools — and parents like me — are not teaching young people about the basics of personal finance. They can write essays on the Peloponnesian War, but they don't know the difference between a FICO score and a frappuccino. I realized this recently when our daughter was explaining how personal finance was introduced to her high school class on "senior day." A local banker came and delivered two messages: Avoid overdrafts on your debit cards and start saving now for your funeral "because funerals are very expensive." That was the sum total of our daughter's exposure to financial literacy in the 14 years since she entered pre-K. Only 13 states make personal finance courses a high school graduation requirement, and only nine require testing on the subject. The excuses vary: Schools can't afford them; they're not important enough; who will teach them? This about a subject that affects every graduate, no matter her career path. Such courses should be fun and relevant, not boring. I'd give each student $2,000 in play money and reward those who made the smartest investments. I'd have them create budgets for variously modeled families with fixed incomes, and then make daily, weekly and monthly spending decisions. This would immerse them in real-world issues: how to set spending priorities, how to build and protect a good credit score, the joys of saving and the pitfalls of borrowing, renting vs. buying a home, mortgages to avoid, investing wisely for retirement, buying insurance, etc. Act on lessons But financial literacy isn't worth much if it's not put into practice. Our Visa bill arrived last week with the new federal requirement that credit card companies reveal the consequences of making only minimum monthly payments. This is Congress paying lip service to financial literacy, and it's an eye-opener. We use the card a lot, but we pay it off each month. The latest bill was several thousand dollars, but well below five figures. So how long do you think it would take to pay off our bill if we made only the minimum payment monthly and never used the card again: My wife guessed eight years; our daughter guessed 10. The answer: 27 years. But what about Congress, the maker of rules for others to follow? It has a nearly $13 trillion credit card balance, called the national debt. At our expense, Congress elects to pay the minimum — the annual interest — and finance the rapidly growing balance. How long will it take to pay off $13 trillion? I've no idea, but here's a good bet: When the children and grandchildren of this year's seniors gather to watch their children and grandchildren graduate decades from now, they'll still be paying it off, and $13 trillion will be recalled, if at all, as the bargain of the century. Don Campbell teaches journalism at Emory University in Atlanta and is a member of USA TODAY's Board of Contributors. Five Filters featured article: The Art of Looking Prime Ministerial - The 2010 UK General Election. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
| Kara McGuire - Minneapolis Star Tribune Posted: 05 May 2010 12:13 PM PDT Columnist/Reporter | Your Money Phone: 612-673-7293 E-mail: kmcguire@startribune.com Kara McGuire covers personal finance and the stock markets. She writes a Sunday column on topics ranging from saving for retirement to kids and money and blogs on personal finance issues. Five Filters featured article: The Art of Looking Prime Ministerial - The 2010 UK General Election. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. | |
| On Personal Finance: 'Average Joes' still stuck in an ... - Philadelphia Daily News Posted: 05 May 2010 01:21 AM PDT For an update on the state of the consumer economy, let's train our magnifying glasses on that group of Americans known, in populist parlance, as "Average Joe." Notice how members of this species of U.S. wage earner are scratching and crawling to get out of a hole they've been stuck in since the economy crashed like an asteroid into their living rooms a year and a half ago. Zoom in on the worker ants, please. Not making much headway, are they? Let's see if we can help explain how it is that members of this endangered species - also known by the more scientific designation the middle class - are still up to their antennae in dirt. In March, spending by U.S. consumers rose 0.6 percent. It was the biggest monthly gain in five months, according to the view from the Commerce Department this week. Good news! you say. Average Joe is snapping up cell phones and Shore houses again! The little guy is back in the game! Look closer. Though consumers let loose a bit in March, they did so with less money coming in. Personal income that month rose just 0.3 percent, hardly enough to keep pace with spending. So how did consumers pay for what they bought? Savings. The personal-savings rate fell to 2.7 percent, the lowest since September 2008. Ah, September 2008. Who can forget that historic month? That was when Lehman Bros. collapsed, the stock market went south, and people's retirement accounts sank into the toilet. Within a few months, unemployment would hit the roof. Savings suddenly became a refuge, a necessity. Twenty months later, many people are either squeaking by on unemployment compensation, making do despite fewer hours on the job, or collecting smaller paychecks in return for the luxury of not being fired. So even though they've decided they can't go without certain things anymore, they are tapping reluctantly into cash they would rather save, says Philadelphia-based personal financial planner Jane A. Berryman, of Raymond James & Associates Inc. Most of the 300 households she advises are finally spending on things they had been putting off. No frills, she said. "I would say at least a third of my clients have had to agree to some form of salary cut or at least lost a bonus in the past year," said Berryman, vice president of investments at Raymond James. "They're able to save less of any money that they've brought in, but they don't feel like they can delay certain kinds of expenditures any longer." Think home repairs, or dental work not covered by insurance, she said. This is true of both $40,000-a-year nurses in Northeast Philadelphia and million-dollar-a-year specialist-physician married couples. "I was also amazed this year at the number of clients who already had their tax refund earmarked for something they had to do," said Berryman, who teaches financial-planning classes, too. "I think people recognize the economy is doing somewhat better, but they just don't think they can delay certain things any longer." If you've hung on to your job without a pay cut, you're not in as bad shape as those who haven't, said economist Joel Naroff, based in Bucks County. "The people who are having real problems," he said, "are those who were probably middle-income households who lost one or both of their wage earners. Because they've moved down the income scale, and their prospects are not great." With unemployment at 9.7 percent, it's hard to see how incomes will pick up anytime soon. And if what we're all really hoping for is a solid economic turnaround, that's a big deal: When Americans spend money, the economy generates jobs. "If we don't get job growth with this high unemployment rate, people are not going to get good salary increases," Naroff said. "And without job growth, the economy's not going to generate a whole lot of additional income. "And if we don't get a whole lot of additional income, where are we going to get the spending from?" Savings. That precious, finite resource. But for how long? Average Joe could really use a hand climbing out of that hole. Let's see if one comes along before the walls cave in. Contact Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com. Five Filters featured article: The Art of Looking Prime Ministerial - The 2010 UK General Election. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. | |
| You really are richer than you think - Globe and Mail Posted: 05 May 2010 10:25 AM PDT Welcome to the Globe and Mail Personal Finance Reader. I'm Rob Carrick, personal finance columnist at The Globe, and twice weekly I compile a list of articles, blog postings, videos and websites that represent the best of what the online world has to offer on money-related subjects. It's true – you're richer than you think. Bank of Nova Scotia rode this slogan for a while (much parodied during the worst of the financial crisis), but what I'm talking about here is something called the Global Rich List. It's a website that will show you how your income compares to people around the world. Check it out and get some context about how rich you are. Then, check out the many other resources in the Reader for making people smarter money managers. We've got an entertaining video series on basic personal finance called Saving Penny, tips for managing your credit rating and a directory of online coupons for goods and services. There are also lots of housing and investing links, including one for a quiz to help you determine how much investing risk you can stand. Special note: We're compiling a list of best Canadian personal finance and investing blogs and we'd love to hear your suggestions. Please send them to me at rcarrick@globeandmail.com From the Globe and Mail Interest rates: Signs of anxiety Interest rates are rising faster than predicted, and consumers are feeling the heat. Broker or bank? Fixed rate with strings, or flexible terms? Borrowers need to get their houses in order Variable or fixed mortgage? When is one better than the other? Analyst Vince Gaetano explains in this video. Planning for her daughters The latest in our Financial Facelift series features a recently widowed woman who looks for ways to provide for her children after she is gone. It was followed by an online reader discussion on estate planning: Clever estate planning protects your money Whose interests does your financial adviser have at heart? Some have yours. Others are sales hacks. The regulations make it hard to tell the difference Saving for a summer vacation It's not too late to start, and it's not that painful, writes Chaya Cooperberg Extreme frugality: Can you outcheap 'em all? Tough economic times and environmental awareness have caused many people to cut back on consumerism – but reusing old dental floss may be crossing the line Must Reads From Around the Web Dollars and Sense The Global Rich List is a website where you plug in your annual pay and find out where you stand on a global basis. The numbers behind the calculations aren't as up to date as they should be, but the message that we're pretty well off here in Canada stands up. Saving Penny is the name of a series of short, well-crafted personal finance videos about a young woman named Penny, her boyfriend Doug and her friends Jane and Allison. These videos cover topic like budgeting, saving for a home and buying a car, and they offer a nice mix of watchability and useful information. A recent study shows that use of coupons found on the Internet soared 263 per cent last year in the United States. We have plenty of Canadian online coupon sites, including Flyerland, which I just noticed. Let me know if you're interested and I'll round up all the sites of this type that I know about. Seven mistakes that will hurt your credit rating, and how to fix them. Housing Developments Financial industry consultant Dan Richards weighs in on the debate over whether there's a housing bubble in Canada. His verdict: not so much, except maybe in Vancouver. Here's Richards on whether your home can be considered a good investment. Stay with variable-rate mortgages, suggests David Larock, a mortgage planner and blogger. His argument is that while rates will start rising this summer, the increase won't be as sharp as some believe. Investorama Try this quiz, developed by a pair of U.S. finance professors, to examine your tolerance for investment risk. I took the test and scored "average/moderate." A great chart for keeping track of the returns from various categories of stocks and bonds over the years. While you're on this website, called The Stingy Investor, check out some of the other excellent articles and resources for available at no cost. Investors-Aid, an educational co-operative for individual investors, has issued an advisory about the no-charge 10-per-cent redemptions that deferred sales charge (DSC) mutual funds offer. An investment adviser argues in this blog that the stock market's going to get crazy again at some point, so be prepared. Even investment writers have trouble understanding the jargon-infested legalese that prospectuses for financial products are written in. Editor's note: If you don't receive Rob Carrick's newsletter twice weekly by e-mail, you can sign up to get it for free at The Globe and Mail. All you need to do is register for the site, or if you've already registered, login and go to your profile at the top of the homepage. Once you're in your profile, look under Alerts and look for the Personal Finance Reader and other newsletters. Other financial newsletters include:
Five Filters featured article: The Art of Looking Prime Ministerial - The 2010 UK General Election. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
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