In case you missed the Arlo & Janis (by Jimmy Johnson) comic strip on "Black Friday":
Arlo: "It's 'Black Friday,' the most profitable day of the year."
Arlo: "They say our spending is vital to the economy, especially the stock market."
Arlo: "They're only telling half the story!"
In the background Janis is digging into her purse as she prepares to go shopping...
Arlo: "It's 'Red Friday' for most of us!"
See it in color at: http://comics.com/arlo&janis/2010-11-26/
November 29, 2010
The Wall Street Journal Sunday
Each Sunday the Salt Lake Tribune includes The Wall Street Journal Sunday in the "Sunday Money" section of the paper. WSJ Sunday is a fabulous free source of personal finance and investing info. It's available online at WSJ.com/Sunday and then click on the newspaper of your choice. get in the habit of checking the site each week.
A couple items that caught my eye include Medicare Enrollment 101 (under "The Aggregator" section which includes a variety of helpful subjects each week.
Also of value: "How to give children the gift of investing." I can't tell you how many times women have said to me that they wished they had learned about basic concepts like the Time Value of Money (compound interest) when they were younger. Educate your children by giving them the gift of investing this holiday season instead of the latest techno toy that will soon be outdated and end up as toxic waste in the landfill.
A couple items that caught my eye include Medicare Enrollment 101 (under "The Aggregator" section which includes a variety of helpful subjects each week.
Also of value: "How to give children the gift of investing." I can't tell you how many times women have said to me that they wished they had learned about basic concepts like the Time Value of Money (compound interest) when they were younger. Educate your children by giving them the gift of investing this holiday season instead of the latest techno toy that will soon be outdated and end up as toxic waste in the landfill.
Giving thanks is good for your mental & physical health!
Don't stop giving thanks now that the T-day turkey is history (or soup). According to an article in The Wall Street Journal, "a growing body of research suggests that maintaining an attitude of gratitude can improve psychological, emotional, and physical well-being."
"Adults who frequently feel grateful have more energy, more optimism, more social connections and more happiness than those who do not."
"They're also less likely to be depressed, envious, greedy or alcoholics. They earn more money, sleep more soundly, exercise more regularly and have greater resistance to viral infections."
New research shows that gratitude provides similar benefits for kids. Cultivating gratitude is a type of "cognitive-behavioral therapy." For tips on helping raise kids to be grateful check out this link: http://online.wsj.com/article/SB10001424052748704243904575630541486290052.html?KEYWORDS=grateful+people
("Thank you. No, thank, you," by Melinda Beck, WSJ 11/23/10, p. D1)
November 24, 2010
MetLife 2010 Study of the American Dream Finds Many Americans Feeling the Stress of Living Close to the Financial Edge
According to the MetLife 2010 Study of the American Dream:
"Americans are taking significant steps to improve their financial situation. More than half (56%) are taking on more responsibility at work, almost two-thirds (64%) have started saving more and spending less, and an additional 29% plan to cut spending."
"Americans are helping their family members financially – even though they may also be struggling themselves."
"Many Americans still find themselves close to financial ruin should they lose their job: 45% could not take care of expenses for more than a month, and 65% could not do so for more than three months."
Insufficient emergency savings/cash reserve adds to the stress. "Americans who consider themselves to have an adequate personal safety net are twice as likely to feel they have achieved the American dream as those who do not (57% vs. 24%)."
One disturbing finding: "Though many are struggling to make ends meet, needs and expectations continue to increase. More than half (58%) of Americans believe that the bar is constantly rising in terms of the basic necessities in life. Three in ten (29%) feel more pressure to buy more and better material possessions." (bold added)
http://www.metlife.com/business/insights-and-tools/industry-knowledge/metlife-study-of-the-american-dream/index.html?WT.mc_id=vu1234
What to do?
"Americans are taking significant steps to improve their financial situation. More than half (56%) are taking on more responsibility at work, almost two-thirds (64%) have started saving more and spending less, and an additional 29% plan to cut spending."
"Americans are helping their family members financially – even though they may also be struggling themselves."
"Many Americans still find themselves close to financial ruin should they lose their job: 45% could not take care of expenses for more than a month, and 65% could not do so for more than three months."
Insufficient emergency savings/cash reserve adds to the stress. "Americans who consider themselves to have an adequate personal safety net are twice as likely to feel they have achieved the American dream as those who do not (57% vs. 24%)."
One disturbing finding: "Though many are struggling to make ends meet, needs and expectations continue to increase. More than half (58%) of Americans believe that the bar is constantly rising in terms of the basic necessities in life. Three in ten (29%) feel more pressure to buy more and better material possessions." (bold added)
http://www.metlife.com/business/insights-and-tools/industry-knowledge/metlife-study-of-the-american-dream/index.html?WT.mc_id=vu1234
What to do?
- Recalibrate your expectations! It's time to downsize and simplify your life; get off the consumption escalator. If all your friends are on consumption treadmill, it's time to start expanding your circle of friends to people who have a healthier (for themselves and the planet) perspective on the American Dream. Start by reading Greg Mortenson's book Three cups of tea (see related blog). Check out websites about downsizing your consumption and simplifying your life.
- Start or build your emergency savings. A great place to begin is with an online savings account. Check out some options at:
- Ally Bank http://www.ally.com/ (1.09% 11/22/10)
- Sallie Mae Bank (www.salliemae.com) (Nov. 16, 2010: 1.3%)
- http://go.salliemae.com/bank/?dtd_cell=RDAPS1WBSMAL02100556
- Discover Bank (http://www.discoverbank.com/): 1.25%
- Read more of my blog!
Do Parents Live It Up When Children Fly the Coop?
Norma B. Coe, Zhenya Karamcheva, and Anthony Webb at the Center for Retirement Research at Boston College answer the question.
“Today, responsibility for a comfortable retirement rests mostly on the individual. This change has led to widespread concern about the adequacy of households’ retirement savings.”
What do parents do with the money that is freed up when their children leave home? Do they spend it or do they invest for their retirement?
IF they save the extra money, parents benefit in two ways. “First, they are able to quickly build up retirement savings. Second, they keep their per-person consumption low and thus need less money to fund consumption in retirement.”
This study reports how these households really behave. “It shows that parents maintain household-level and increase per-capita consumption when their children leave home. These findings …show that more households are at risk of an unsatisfactory retirement.”
“Households face a choice when their children leave home. They can save more for retirement or increase per-capita consumption. The… research shows that households choose the latter, increasing per-capita, non-durable consumption by 51 percent on average. As a result, many are at risk of entering retirement with insufficient wealth to maintain the level of consumption they enjoyed while the children were in the house, let alone the increased consumption they enjoyed after the children left home” (p.4).
What about you?
Read the 4 page report at: http://crr.bc.edu/images/stories/Briefs/IB_10-18.pdf
November 23, 2010
Black Friday or Buy Nothing Day? You decide
The day after Thanksgiving is traditionally one of he biggest shopping days of the year, complete with news stories of predawn shoppers lining up in the cold. (Remember the trampling death at Walmart a few years ago?)
The alternative is "Buy Nothing Day," http://www.buynothingday.org/ an international day of protest against rampant, run-wild consumerism. Two years after the September 2008 world financial meltdown, the Global Financial Crisis drags on and the U.S. is still mired in (the aftermath of) the worst recession since the Great Depression. Although the National Bureau of Economic Research has declared the official end to the US recession, unemployment remains high (nearly 10%) and the foreclosure rate in Utah is still going up (note the appalling number of Legal Notices (a.k.a. foreclosures) in the newspaper.
With Thanksgiving ("the forgotten holiday") upon us, and Friday the beginning of the holiday shopping season, now is a good time to take a deep breath and reflect on what is really important to you. Some of us did much of our shopping at the Alternative Gift Market in Logan. It's never too late to give a meaningful gift to help the world (and reduce the pressure on the local landfill). Check out http://www.altgifts.org/. In Northern Utah shop at: Global Village Gifts, 146 North 100 East, Logan, UT 84321-4610; (435) 713-4347 http://www.globalvillagegifts.org/. "Global Village Gifts is a non-profit shop in Logan that supports struggling artisans in developing countries by selling their fairly-traded handicrafts."
Don't forget Logan's Gallery Walk from 6:00 p.m. to 9:00 p.m. Fri. Dec 03, 2010. Buy locally!
Yes, the economy depends on consumer spending to get back on track and create jobs but consider giving tickets to a music or dance performance, pump your $ into the local economy rather than buying this year's hot gift made in China. For a great deal on last year's hot gifts, just check E-bay.
Other gift ideas: 2 books by Greg Mortenson who is fighting the Taliban by building schools for girls in Pakistan and Afghanistan. Books, not bombs! His first book, Three Cups of Tea: One Man’s Mission to Promote Peace, One School At A Time, is an inspirational worldwide best seller and mandatory reading for all Army Special Forces. I just finished reading his second book, Stones into Schools, and highly recommend it. Both books make great gifts for women and men.If you and your family and friends have already read both books, consider making donations to the Central Asia Institute http://www.ikat.org/ in the name of a loved one. (Check the website to learn about ikat). Greg is speaking at Weber State October 1, 2011... but it's already sold out. I guess I'll have to wait for the movie which is surely coming (Sundance 2012??).
Three Cups of Tea is also available in a young readers edition: Three Cups of Tea: One Man’s Journey to Change the World…One Child at a Time.
"Listen to the Wind, the children’s book, is told in the voice of Korphe’s children, and illuminates the humanity and culture of a relevant and distant part of the world while sharing a riveting example of how one person can change thousands of lives. Visit www.threecupsoftea.com for more information."
Also check out Pennies for Peace, "an international service-learning program," for kids
http://www.penniesforpeace.org/
Happy holidays!
The alternative is "Buy Nothing Day," http://www.buynothingday.org/ an international day of protest against rampant, run-wild consumerism. Two years after the September 2008 world financial meltdown, the Global Financial Crisis drags on and the U.S. is still mired in (the aftermath of) the worst recession since the Great Depression. Although the National Bureau of Economic Research has declared the official end to the US recession, unemployment remains high (nearly 10%) and the foreclosure rate in Utah is still going up (note the appalling number of Legal Notices (a.k.a. foreclosures) in the newspaper.
With Thanksgiving ("the forgotten holiday") upon us, and Friday the beginning of the holiday shopping season, now is a good time to take a deep breath and reflect on what is really important to you. Some of us did much of our shopping at the Alternative Gift Market in Logan. It's never too late to give a meaningful gift to help the world (and reduce the pressure on the local landfill). Check out http://www.altgifts.org/. In Northern Utah shop at: Global Village Gifts, 146 North 100 East, Logan, UT 84321-4610; (435) 713-4347 http://www.globalvillagegifts.org/. "Global Village Gifts is a non-profit shop in Logan that supports struggling artisans in developing countries by selling their fairly-traded handicrafts."
Don't forget Logan's Gallery Walk from 6:00 p.m. to 9:00 p.m. Fri. Dec 03, 2010. Buy locally!
Yes, the economy depends on consumer spending to get back on track and create jobs but consider giving tickets to a music or dance performance, pump your $ into the local economy rather than buying this year's hot gift made in China. For a great deal on last year's hot gifts, just check E-bay.
Other gift ideas: 2 books by Greg Mortenson who is fighting the Taliban by building schools for girls in Pakistan and Afghanistan. Books, not bombs! His first book, Three Cups of Tea: One Man’s Mission to Promote Peace, One School At A Time, is an inspirational worldwide best seller and mandatory reading for all Army Special Forces. I just finished reading his second book, Stones into Schools, and highly recommend it. Both books make great gifts for women and men.If you and your family and friends have already read both books, consider making donations to the Central Asia Institute
Three Cups of Tea is also available in a young readers edition: Three Cups of Tea: One Man’s Journey to Change the World…One Child at a Time.
"Listen to the Wind, the children’s book, is told in the voice of Korphe’s children, and illuminates the humanity and culture of a relevant and distant part of the world while sharing a riveting example of how one person can change thousands of lives. Visit www.threecupsoftea.com for more information."
Also check out Pennies for Peace, "an international service-learning program," for kids
http://www.penniesforpeace.org/
Happy holidays!
November 11, 2010
Teaching Your Kids About Saving and Investing
http://www.investoreducation.org/teachingyourkids
The nonprofit Alliance for Investor Education (AIE) highlights 10 of the best Web-based resources for parents to teach their kids about how to save and invest in today’s tough financial times.
The nonprofit Alliance for Investor Education (AIE) highlights 10 of the best Web-based resources for parents to teach their kids about how to save and invest in today’s tough financial times.
- Investing ABCs: Teaching Your Children About Stocks – the American Institute of Certified Public Accountants’ 360 Degrees of Financial Literacy
- Gen I Revolution - Council for Economic Education
- A Hitchhiker’s Guide to Planning for College Expenses – CFA Institute
- Choose to Save: Savingsman Episode 5: Saving Early - Employee Benefit Research Institute
- Tips for Teaching Students about Saving and Investing - Securities and Exchange Commission
- Teach Your Children - Certified Financial Planner Board of Standards
- The Basics of Saving and Investing - Investor Protection Trust
- Cover the Basics Before Your Child Leaves the Nest - National Endowment for Financial Education
- Great Minds Think: A Kid’s Guide to Money - Board of Governors of the Federal Reserve
- Fraud Scene Investigator - North American Securities Administrators Association
Credit Reports and Scores Consumer Guide
"Your credit history is important to a lot of people: mortgage lenders, banks, utility companies, prospective employers, and more. So it's especially important that you understand your credit report, credit score, and the companies that compile that information, credit bureaus. This site--maintained by the Federal Reserve Board--provides answers to some of the most common, and most important, questions about credit."
http://www.federalreserve.gov/creditreports/
http://www.federalreserve.gov/creditreports/
Benefits of middle age
The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation is the title of a research study that reports we hit our peak financial decision making ability in middle age. According to the four economists/authors: "We conclude that financial mistakes follow a U-shaped pattern, with the cost-minimizing performance occurring around age 53."
Further info: "Many consumers make poor financial choices and older adults are particularly vulnerable to such errors. About half of the population between ages 80 and 89 either has dementia or a medical diagnosis of 'cognitive impairment without dementia.' We study lifecycle patterns in financial mistakes using a proprietary database that measures ten different types of credit behavior. Financial mistakes include suboptimal use of credit card balance transfer offers, misestimation of the value of one's house, and excess interest rate and fee payments."
Further info: "Many consumers make poor financial choices and older adults are particularly vulnerable to such errors. About half of the population between ages 80 and 89 either has dementia or a medical diagnosis of 'cognitive impairment without dementia.' We study lifecycle patterns in financial mistakes using a proprietary database that measures ten different types of credit behavior. Financial mistakes include suboptimal use of credit card balance transfer offers, misestimation of the value of one's house, and excess interest rate and fee payments."
Implications?
Young adults: listen to your parents' advice.
Oldsters: get help with your finances from your kids or a trusted advisor.
Middle agers: enjoy your wisdom but watch out for your parents (and keep learning as the financial world evolves and becomes more complex).
If you haven't already initiated the conversation with your parents about financial management in old age, maybe this info can help. (Although the focus of the study is on needed public policy changes to help consumers avoid poor decisions, it has application in the realm of family finance.)
Young adults: listen to your parents' advice.
Oldsters: get help with your finances from your kids or a trusted advisor.
Middle agers: enjoy your wisdom but watch out for your parents (and keep learning as the financial world evolves and becomes more complex).
If you haven't already initiated the conversation with your parents about financial management in old age, maybe this info can help. (Although the focus of the study is on needed public policy changes to help consumers avoid poor decisions, it has application in the realm of family finance.)
Citation: Agarwal, Sumit, Driscoll, John C., Gabaix, Xavier and Laibson, David I., The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation (October 19, 2009). Available at SSRN: http://ssrn.com/abstract=973790
November 10, 2010
Health insurance for uninsured Utahns
Uninsured adults can apply for basic health insurance through Utah's Primary Care Network (PCN). Beyond the annual enrollment fee of $50, the program is free and covers doctors visits, emergency room care, prescriptions (birth control included), and some dental and eye care. Requirements: age 19-64, U.S. citizen or legal resident, no other health insurance, not eligible or Medicaid, and meet income requirements (i.e., Max. $33,075/year for family of four). Apply online: http://www.health.utah.gov/pcn or 1-888-222-2542.
Deadline is Monday, Nov. 22. Thanks to The Salt Lake Tribune for this info.
Deadline is Monday, Nov. 22. Thanks to The Salt Lake Tribune for this info.
November 8, 2010
Women's Institute For A Secure Retirement
"Improving the long-term financial security of all women through education and advocacy"
WISER is a terrific resource for planning your financial future, finding great resources and learning about financial planning. Check out the WISER website: http://www.wiserwomen.orgFind out the Top 5 Things Women Need To Do For Retirement, discover great care giving resources, get resources to help yourself or a friend/family member who is experiencing divorce or widowhood, or learn about annuities by reading a free chapter in Mark Miller's new book, The Hard Time Guide to Retirement Security, which is geared to the specific needs of baby boomers who are now nearing retirement. And lots more!
AARP Retirement Calculator
"For many, the first step to evaluating their financial future begins with a retirement calculation to determine when they can retire and what is needed to do so. AARP launched a new Retirement Calculator that balances usability and accuracy to provide retirement planning resources to all Americans."
“Based on user feedback and a changing retirement landscape, AARP revamped its retirement calculator to enhance usability, but maintain accuracy in its results.”
The new AARP tool strikes the right balance between giving users the information they want while making it engaging and easy to use. The calculator features pre-populated answers that can be adjusted easily, the ability to develop a retirement plan for a dual-income home and simple navigation. It provides an easy to understand explanation of where an individual is currently at in their retirement planning and the ability to experiment with various retirement scenarios to create a plan that is right for them. Upon completion of the calculator, individuals will be provided links to a number of AARP resources to learn more about Social Security, financial planning and health care in retirement. The new AARP Retirement Calculator does not promote any product or service.
To try out the new AARP Retirement Calculator, visit http://www.aarp.org/work/retirement-planning/retirement_calculator/
For more information about retirement and financial planning, visit www.aarp.org/money
Best college & university values
Kiplinger’s Personal Finance magazine publishes a yearly article on best values in private and public colleges. The November magazine had their latest on private colleges: http://www.kiplinger.com/tools/privatecolleges/
For public colleges see: http://www.kiplinger.com/tools/colleges/
It’s enlightening to see how they rate the schools. The article is especially helpful in showing the average amount of student debt of graduates and info on need-based and non-need based aid.
The best way to save for college is through 529 college savings plans and Utah’s Educational Savings Plan always ranks among the best due to its low costs. Check our www.UESP.org
November 3, 2010
Pay cash at grocery store? Eat better
We know from previous research studies that customers paying with a credit card spend more than those who pay cash. Now there is evidence, published in the Journal of Consumer Research, that paying cash at the grocery store may result in healthier food choices.
People are more likely to buy unhealthy foods when they pay using credit or debit cards. Why? "First, there is a correlation between unhealthiness and impulsiveness of food items: Unhealthy food items also tend to elicit impulsive responses. Second, cash payments are psychologically more painful than card payments, and this pain of payment can curb the impulsive responses to buy unhealthy food items."
Maybe it's time to try using old fashioned cash when grocery shopping. Save money and eat better.
Read more at:
People are more likely to buy unhealthy foods when they pay using credit or debit cards. Why? "First, there is a correlation between unhealthiness and impulsiveness of food items: Unhealthy food items also tend to elicit impulsive responses. Second, cash payments are psychologically more painful than card payments, and this pain of payment can curb the impulsive responses to buy unhealthy food items."
Maybe it's time to try using old fashioned cash when grocery shopping. Save money and eat better.
Read more at:
November 1, 2010
Will you have enough $ to retire?
From Consumer Reports
In the October 2010 Issue Consumer Reports ran article titled: “Will You Have Enough to Retire?”
"If you can't answer that question, you're in good, or at least plentiful, company these days. Just 46 percent of U.S. workers say they or their spouses have tried to calculate how much they need to save for a comfortable retirement, according to a recent survey by the nonprofit Employee Benefit Research Institute in Washington, D.C. And 14 percent of that group admit to guessing. Even if you never plan to retire fully, or the day is still decades off, having more than a guess about how much money you'd need can help you avoid some unpleasant surprises years from now. "It may sound like a lot of work," says Steve Vernon, an actuary and blogger on retirement topics in Oxnard, Calif., "but it's worth it given that you're planning the rest of your life." It doesn't have to be a lot of work if you shoot for an approximate number rather than try to account for every possible variable. With all the unpredictable factors involved, including future inflation rates and investment returns, as well as your own longevity, an approximation may be the best you'll do anyway. Here's how to come up with one.
Dementia and Money Problems
The Vanishing Mind: Money Woes Can Be Early Clue to Alzheimer's
By GINA KOLATA
"New research shows that one of the first signs of impending dementia is an inability to understand money and credit, contracts and agreements."
This NY Times article, although geared to financial planners, has a clear message for family members-- the need to plan for possible mental deterioration due to aging. The message is clear: we need to watch out for signs of dementia with our parents and grandparents and have a plan in place to address the problem. For those of us without children-- who will watch out for our needs as we age?
http://www.nytimes.com/2010/10/31/health/healthspecial/31finances.html?pagewanted=1&_r=1&emc=eta1
By GINA KOLATA
"New research shows that one of the first signs of impending dementia is an inability to understand money and credit, contracts and agreements."
This NY Times article, although geared to financial planners, has a clear message for family members-- the need to plan for possible mental deterioration due to aging. The message is clear: we need to watch out for signs of dementia with our parents and grandparents and have a plan in place to address the problem. For those of us without children-- who will watch out for our needs as we age?
http://www.nytimes.com/2010/10/31/health/healthspecial/31finances.html?pagewanted=1&_r=1&emc=eta1
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