Archive for the ‘Bills’ Category

Apparently Debt is the New Cigarettes

Thursday, June 23rd, 2011


(photo credit: paalia)

Now, debt isn’t necessarily a bad thing, okay? But this is a little crazy. For the past 25 years, people in their early and mid-twenties have reported feeling a thrill of maturity and self-confidence when they first started to dig themselves into the debt hole.

Whether the money was going toward education or just going into the “I’ll pay for this pizza later” pile, young adults – especially those in the lowest 25% of income earners – said they experienced greater “self-esteem and perceived mastery” when they began to run up a tab.

Some kinds of debt are better than others. In general, debt that can be considered an investment in something – like a home, or an education that can get you a better job – is a good thing. But debt that gets you nothing but fees, interest rates, and a pizza that has long since been digested and forgotten – i.e., credit card debt – is not good.

The most important factor in determining whether your debt is good or bad is whether you’re able to make payments in full and on time. If you don’t, your credit score will suffer and you’ll find yourself on the road to Massive Debt.

Which, by the time you reach 28 (according to the study), will start to make you feel kind of bad about yourself.

Americans Open Wallets Wider Than They Have In Three Years

Wednesday, February 2nd, 2011

The financial times they are a’changing. At least, that’s what these new statistics would have us believe…

  • In 2009, the American GDP (gross domestic product – a measurement of economic activity) dropped more than it had in sixty years. But like a phoenix made up of economic statistics, it rose back up in 2010.
  • We can’t know the exact cause, but the numbers say that people earned a little more, saved a little less, and spent a little more than they had in recent years.
  • Since consumer spending makes up almost three-quarters of all economic activity in the U.S., this is good news. But there are still those issues around high unemployment and a trashed housing market…

Facts & Figures

  • Consumer spending represents 70% of all economic activity in the U.S.
  • In 2010, spending rose by 3.5% – 0.7% of that was in December alone
  • The last time spending rose that high was in 2007 (pre-recession)

What do you think?

Have you been spending more lately? Do you think the economy will recover faster depending on where you spend your money (at independent stores versus chains)?

(Check out this week’s Today at TILE for a closer look at signs of life in the economy.)

Whoa – Credit Card Fees Higher Than Ever!

Wednesday, February 2nd, 2011

“NEW YORK (CNNMoney) — Interest rates are now hovering near record highs, at an average rate of 14.72%. And if your credit is bad enough, you could even end up with a rate as high as 59.9% APR.

That’s because while the CARD Act helped crack down on certain fees and requires more disclosures, it didn’t cap every credit card holder’s worst enemy: interest rates.”

What do you think?

Do you know how much interest your card company will charge you for a late payment?

Sneaky Tricks Debit Card Companies Play – And How To Play Them Back

Friday, January 7th, 2011

The man behind the Your Money column in the NYTimes gives a fast-moving and really useful explanation of debit and credit cards. Understanding the difference and some features of each can potentially save you a few hundred bucks a month – money you can surely put to much better use.

Feed your head, not your bank’s overdraft fee collectors.

What You Should Know Before You Budget

Monday, January 3rd, 2011

evil-marketing-rays.jpg
Credit: apium

Sticking to a budget is more or less like sticking to a diet: It sucks, and you’re almost guaranteed to fail.

BUT! There’s another way. With a few simple tricks, you can take control of your spending and avoid feeling guilty all the time. Here’s what Tara Siegel Bernard from the New York Times has to say:

  • Let the robots take control. Set up automatic transfers to your savings and investment accounts. It only takes a few minutes. If your savings is being automatically transferred out of your spending account every month, you don’t have to worry about spending it!
  • Start at the finish line. What are you saving for? Saving is easier when you have a goal in mind (a vacation, a new car, an obscenely expensive pair of shoes). Figure out how much money you need and you’ll know how much money to have automatically transferred each month.
  • Separate the fun money from the serious money. If you have a phone bill or rent to pay, keep that money separate from the money you plan to squander irresponsibly at the mall. Obviously.
  • Brace yourself for big surprises. One of the easiest ways to muck up your budget is to suddenly spend a lot of money you hadn’t planned for. This one’s easy, though. Put a little extra away somewhere each month. You can use that to cover your surprise expenses without feeling like a total budgeting loser.

Best Quote:
“Ultimately, what we want our money to be is an energy source. It should help us get somewhere or do something.”  – Amanda Clayman, Financial Therapist (only in New York!)

How can spending money save you money?

Wednesday, June 10th, 2009

No one likes having to pay bills, but some things that cost you money have a silver lining. When tax season rolls around, some of your expenses from the past year can actually help lower your taxes.

Everyone who makes money has to pay income taxes, which are generally higher the more money you make. But when the government figures out how much to charge you in income taxes, they use a measure called the adjusted gross income, which is an attempt to better represent the portion of the money you make that you actually get to use. For example, you may make $1,000 a month at your job, but that doesn’t mean you can actually put $1,000 in the bank at the end of every month: you’re spending at least some of that money on various things that the government views as tax deductible (or the amount you “adjust” your income by).

Tax deductible items are things like donations to certified charities, work expenses, and certain educational expenses. On the other hand, if you spend money on, say, an iPod or a pair of jeans, that’s money you could technically save, and you’re spending it for your own enjoyment, so it doesn’t lower your adjusted gross income. While tax deductible expenses usually don’t come from things you’d enjoy spending your money on, there is a consolation prize: those items you’re paying for now mean more money that’s yours to keep later on.

The White House Takes On Credit Card Fees

Monday, April 20th, 2009

Credit card companies aren’t always crystal clear about their fees & charges; D.C. is taking a hard look at the fine print and you should, too.

  • President Obama is seeking reform on “credit card abuses” – practices that include misleading credit offers and extremely high interest rates.
  • Congress is already working on legislation to combat certain fees and rate increases, but support from the White House should help these measures pass.
  • Banks are wary of the plan, saying the government should wait for existing legislation to go into effect before pursuing more.

Facts & Figures

  • There are already new rules limiting credit card rate increases, but they won’t go into effect until 2010.
  • Among 21 of the biggest banks that received federal bailout money, overall lending decreased by 2.2% in February.
  • Number of specific plans unveiled so far by the White House to deal with these issues: 0.

Best Quote

“As we go forward we need to be careful about piling on rules that very much may have the impact of restraining the availability of credit.” – Edward Yingling, President of the American Banker’s Association (tha banking industry’s lobbying group)

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