The Dark Side of the Personal Finance Industry

New York journalist Helaine Olen’s new book (published January 2013), Pound Foolish: Exposing the Dark Side of the Personal Finance Industry has garnered praise – from The Economist, The New York Times, and others – and criticism from the industry.

According to Olen, "I don’t have anything against all financial advisers, but a lot of people are selling themselves as experts in things they are not expert in. I believe that their commissions are almost inherently conflicted. I also believe that the minute you start selling things as, “I can protect you.  I can do better than…,” you’re getting into dangerous territory, because it’s simply not true.” read the interview at http://fsp.bc.edu/olen-explains-%E2%80%98pound-foolish%E2%80%99/
Olen continues "the idea that we will all be okay if only we learn proper money management – is an excuse to blame people for their troubles.  Since the late 1970s, a massive inequality issue has opened up. We have very little class mobility in our country. We know that our net worth plunged by 40 percent in 2007-2010.  To turn around and tell people that their issues are all their fault is naïve at best and it’s an outright lie at worst." Read Olen's book for more perspective on our economy and the personal finance industry. 

Data Privacy Day

Data Privacy Day is on Monday, January 28th. The day marks an effort to educate and empower people to protect their privacy and control their digital footprint.

In our online world, data is free flowing. All of us - from home computer users to the largest corporations - need to be aware of the personal and private data available and remain vigilant and proactive about protecting it.

Get information and resources about protecting your privacy.

Concerned about Credit Security?

Hardly a week goes by without a major security breech somewhere in the U.S. Although consumer slip ups in security practices may be the cause of ID theft or credit misuse, often it is a theft of data beyond the control of the consumer. Utah suffered a major breech of health data in March 2012. Victims are often offered a year of free credit monitoring service.

However, it much better to prevent the breech rather than be notified and have to deal with the messy and time consuming clean up process. A Security Freeze is a better approach. It is also advised for persons who don't anticipate applying for credit in the near future who want to protect themselves. Read more at: http://www.consumersunion.org/campaigns//learn_more/003484indiv.html

Time to Buy a Home?

Is it time to buy rather than rent? Interest rates are at historical lows and rents are rising in many cities.  One of the first factors to consider is how long you plan to stay in your current location. It should be a minimum of 3 years; 5 years is better.  Explore the pros and cons and get advice from Wall Street Journal writer Rachel Louise Ensign at http://online.wsj.com/article/SB10001424127887323968304578245540679893874.html?mod=personal_fin_newsreel

Educating Teens About Money

"The Federal Deposit Insurance Corp. is offering a money guide on its website to educate teens and young adults about financial issues such as credit cards, interest rates and managing money. Other information includes tips for getting a good auto loan and repaying student loans." Read the details in this Kansas City Star article by Steve Rosen:
The idea behind the special online content is to help young people and parents buy into the need for taking responsibility for developing sound money handing practices at a young age.
http://www.kansascity.com/2013/01/21/4022919/kids-and-money-fdic-sets-out-to.html

Read more here: http://www.kansascity.com/2013/01/21/4022919/kids-and-money-fdic-sets-out-to.html#storylink=cpy

"For young adults and teens: Quick tips for managing your money" -download the PDF at http://www.fdic.gov/consumers/consumer/news/cnfall12/Fall2012.pdf

The 1% More Savings Calculator

"Increasing your savings by one more percentage point – or even better, another percentage point a year – can add up to big additional savings over time." Check out this helpful calculator from the New York Times which illustrates one of the concepts of Small Steps to Health and Wealth (SSHW) http://njaes.rutgers.edu/sshw/) that small changes in behavior and small increases in savings can add up to large benefits over time. You don't need a big raise in pay to increase your savings rate or debt payoff. So quit kidding yourself that you're going to make large changes in your behavior; start with small sustainable changes to accomplish your goals. See: http://www.nytimes.com/interactive/2010/03/24/your-money/one-pct-more-calculator.html

Consumer feedback needed on Credit Card Law

Please take the online CARD Act Impact Survey to provide the Consumer Financial Protection Bureau (CFPB) with feedback on how the credit card law has helped - or hurt - you in the last two years.The last day to participate in January 22. Consumer Action is teaming up with the CFPB to provide data on the effectiveness of the 2009 credit card bill http://www.surveymonkey.com/s/card_act_poll
to review provisions of the 2009 law see: http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders

Turning Resolutions into Realities

"As we begin 2013, you may be wondering what the best course of action is to reach your goals this year. To turn New Year’s resolutions into a new year of realities, you must have a plan. That plan needs to consist of laying out a series of steps (large and small) that will guide you down the path toward success over the next 12 months." http://practicemanagementblog.fpanet.org/2013/01/04/turning-resolutions-into-realities/ Although written for financial advisors, the steps are the same for consumers.
Create Clarity Around Your Goals
Compartmentalize Your Goals
Attach Emotion to the Activities
Find an Accountability Partner
It takes time to change old (bad) habits. Enlist the help of a partner who shares your goals and will support you in maintaining your new habits. These recommendations are similar to SMART goals. For help in sticking with your resolutions, sign up for the Small Steps to Health and Wealth challenge: http://njaes.rutgers.edu/sshw/

College Cost Maze

Have college costs, especially at private colleges, become like airfares with every seat priced differently? As college costs rise faster than inflation, the actual price has become harder to discern. Everyone contemplating college costs should read this article from the Charlotte Observer: "Colleges all offer a breakdown of expected costs, but totals after calculating loans, scholarships and other financial considerations may vary widely depending on the family's situation, Lee Bierer writes. The most important thing for parents, Bierer advises, is to consider just how much debt the family can reasonably shoulder. This will come in handy when comparing what the federal government considers to be the "expected family contribution" -- the amount they think you can afford -- even if it's not the same as what you realistically can pay." It's a jungle out there! Get the details at: http://www.charlotteobserver.com/2013/01/08/3770009/countdown-to-college-how-much.html

Debt = Depression

At least short term debt (credit cards, past due bills, and payday loans) contributes to depression. Long term debt (for mortgages and education) does not have the same effect according to University of Wisconsin professor Lawrence Berger.  The associate professor of social work determined that a 10% increase in the  amount of an individual’s debt increases his or her depressive symptoms by 14%. "To be clear, having debt does not lead to full-blown clinical depression.  But it does trigger the garden variety blues that most people experience.  Symptoms vary from losing one’s appetite or being unable to shake the blues to feeling lonely" http://fsp.bc.edu/%E2%80%9Cdamn-right-ive-got-the-blues%E2%80%9D/. watch the YouTube video: Household Debt and Adult Depressive Symptoms http://www.youtube.com/watch?v=nwROZNBt5aY
Get help in reducing your debt from the Housing and Financial Counseling program at the USU Family Life Center: 435-797-1569; http://www.usu.edu/fchd/housing/