Saving/Investing
Five New Financial Normals
Monday, August 23rd, 2010
Writing about the “new normals” brought on by the Great Recession has become, well, a new normal for many media outlets. Adding to the conversation, Fortune magazine has come up with five new normals that it believes really will stick. Here they are, along with my thoughts. 1. Long-term unemployment. For those who have jobs, ... [Read more]
How Much Would It Take To Feel Rich?
Monday, August 9th, 2010
CNNMoney.com recently posed that question among a random sample of people and financial advisors. Most people based their answer on an overarching objective of having enough money so that they would not have to work. Individuals said that would require anywhere from a couple thousand dollars a month to a billion dollars. Advisors put the ... [Read more]
Superstar Savers Share Their Secrets
Tuesday, July 20th, 2010
Do you find it tough to save money? Money Magazine and CNN recently profiled some super savers, and they offer great lessons for all of us. Ed Haskell and Debbie Chasteen save a whopping 50 percent of their after-tax income. How do they do it? They have a clear, compelling goal of retiring before age ... [Read more]
Lots of People in Danger of Running Out of Money
Tuesday, July 20th, 2010
Nearly one-half of the oldest Baby Boomers (those ages 56-62) are at risk of not having enough income to pay for basic needs and uninsured healthcare costs during retirement. That’s the central finding of a new Employee Benefit Research Institute report. The solutions are obvious and have been repeated many times before. First, run a ... [Read more]
Learning How to Save for College
Wednesday, July 7th, 2010
For anyone trying to figure out the best ways to save for a child’s future college costs, SavingForCollege.com used to be the go-to source of information. However, as reported by Mainstreet.com, Morningstar has become a valuable added source. I can’t say one site is better than the other; both have their advantages. Both offer helpful ... [Read more]
The Case for Index Funds
Wednesday, June 23rd, 2010
A new study by professors at the University of Chicago and Dartmouth reinforces the wisdom of the small print in mutual fund advertisements: “Past performance does not guarantee future results.” The research found that “virtually all actively managed funds” fail to outperform the indexes against which they are compared, and that any success achieved by ... [Read more]
Trying to Catch Up in the Retirement Race
Wednesday, May 26th, 2010
Over half of all employed American adults feel “a little” or “far” behind in their financial preparations for retirement, according to a new survey from TD Ameritrade. The most common explanation? Respondents said they simply have no money left to save after meeting their regular expenses or they started saving too late. Many parents also ... [Read more]
The Lawn Mowing Millionaire
Tuesday, May 11th, 2010
If your child plans to work a summer job, encourage him or her to open a Roth IRA. According to a Mainstreet.com article, money you pay your child for chores won’t qualify, but money the child earns mowing other people’s lawns, babysitting, working a paper route, and many other jobs probably will. A Roth IRA ... [Read more]
How Gender Impacts Investor Behavior
Monday, March 22nd, 2010
Who do you think tends to be better investors: men or women? The latest in a fairly large body of research on the topic sides with women. As reported by The New York Times, a Vanguard analysis of 2.7 million IRA investors found that women were less likely to sell their equity investments at last ... [Read more]
Youth is Entrusted to the Young
Friday, March 19th, 2010
There’s an old joke that youth is wasted on the young. Financially, it’s easy to back that up. According to tax information service CCH, for example, just 28 percent of workers younger than 25 are contributing to an employer-sponsored retirement plan. Of course, the best way to take advantage of the power of compound interest ... [Read more]
Retirement Realities Sinking In
Tuesday, March 9th, 2010
American workers are becoming more realistic about their prospects for retirement. The latest annual Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI) found that nearly 25 percent of all of today’s workers expect to retire at age 70 or older, the highest number expecting such a late retirement since the EBRI started its ... [Read more]
Recession Lessons: Diversification Still Works
Wednesday, February 24th, 2010
The Great Recession prompted many pundits to declare much of the conventional investment wisdom null and void. But not so fast. An analysis by brokerage house T. Rowe Price (see the article starting on page 15) makes a compelling case that a properly diversified portfolio, including stock market exposure, is still the best route to ... [Read more]
Why You Need Two Savings Accounts
Monday, January 4th, 2010
A very common New Year’s resolution is to save more money. That’s a worthy goal, but I recommend that you maintain two savings accounts—an “If” savings account and a near-term “When” savings account. “If” savings is your emergency fund. It’s for all of life’s if’s—if you incur significant medical or house repair expenses that are ... [Read more]
Becoming a Nation of Savers
Monday, December 21st, 2009
After many years of declines in our household savings rate, the recession seems to have sparked a savings revival. The rate even hit a high of 6.4 percent of disposable income in May, the highest since 1993. It was 4.4 percent in the most recently reported month of October, whereas it had been hovering around ... [Read more]
What I Believe
Wednesday, November 18th, 2009
I am very excited about the launch of this new web site and blog. Switching from the eNewsletters I’ve been writing for the past three years to a blog will allow for more of a two-way dialogue with readers and will free me to write about more money-related topics. Since this marks the beginning of ... [Read more]
The Fragile State of Our Finances
Friday, November 13th, 2009
If you faced an unexpected $2,000 expense, how confident are you that you’d be able to come up with the money? According to a recent survey from the market research firm TNS, less than half of us believe we could find the funds. Of those who said they could, about half said they would tap ... [Read more]
Text to Save
Thursday, November 12th, 2009
Texting is usually seen as a high cost item, with teens sending their families off the financial cliff with their constant missives about what to wear and who said what. However, a new study reported on by the Wall Street Journal found that texting can be an effective way to foster increased savings. In three ... [Read more]
Money Market Funds Lose Insurance Protection
Wednesday, September 23rd, 2009
A temporary program insuring money market funds has expired. However, according to an article in on Kiplinger.com, there’s not much reason to worry about the safety of money invested in such funds. The insurance program was put in place last fall after the Reserve Primary Fund “broke the buck” – that is, the fund’s investment ... [Read more]
Financial Stress Cutting Into Sleep Time
Wednesday, September 23rd, 2009
Money matters are still keeping a lot of us up at night, but a new survey from Harris Interactive and Principal Financial Group also contained a few slivers of positive news. As reported by U.S. News & World Report, inflation is the top concern among retirees, keeping nearly 40 percent from getting a good night’s ... [Read more]
Lots of People Just Getting By
Wednesday, September 23rd, 2009
According to a new national survey by CareerBuilder, over 60 percent of today’s workers always or usually live paycheck to paycheck. As reported on the MSN Smart Spending blog, that’s up from 49 percent last year and 43 percent the year before. Even 30 percent of workers earning $100,000 or more say they’re living paycheck ... [Read more]
Putting Off Retirement
Wednesday, September 9th, 2009
People’s lack of savings plus the recession has left an increasing number of people realizing they may need to work longer than expected. Understanding that such news may not sound pleasant, a Mainstreet article noted that you don’t have to sign on for an extra 10 to 20 years in order to afford retirement; another ... [Read more]
Is Frugality Fading?
Tuesday, August 25th, 2009
Frugality has been all the rage during the recession. But now there’s some evidence that our money-saving ways may be going by the wayside. A CNN.com story noted that the personal savings rate dipped in June after several months of strong growth. And, while an HSBC survey found that 85 percent of people have modified ... [Read more]
Don’t Get Taken for a Fee Ride
Thursday, July 9th, 2009
It wasn’t long ago that banks would not allow debit card transactions to go through if you didn’t have enough money in your checking account. But then they discovered how profitable it could be to allow such transactions and then hit you with an overdraft fee. Such fees will total an estimated $38.5 billion this ... [Read more]
Online Tool Reviews
Tuesday, June 9th, 2009
The Internet is making personal money management easier. I recently wrote a guest post for U.S. News & World Report, looking at the pros and cons of various online budget tools. I’m using Mint.com and enjoying it for the most part, but I plan to switch to Yodlee next year because it offers a few ... [Read more]
Amish Money Management
Tuesday, June 9th, 2009
There was an interesting post on the Houston Chronicle’s web site about the money management habits of the Amish. According to the story, Amish children all learn a trade such as farming, welding, or woodworking. Money earned through apprenticeships goes to their parents, who give the child 10 percent for spending and put the rest ... [Read more]
Home Improvement
Friday, May 1st, 2009
“I delight in your decrees; I will not neglect your word.” – Psalm 119:16 In the mid 1990s, Kevin Bauman began photographing abandoned houses in his hometown of Detroit. It was a creative outlet, a way to express his amazement and concern that “a once great city could find itself in such great distress.” Viewing ... [Read more]
New Retirement Realities
Thursday, April 23rd, 2009
Our economy has left very few people feeling confident about retirement. Just 13 percent of current workers say they are “very confident” about having enough money to live comfortably throughout their retirement years, according to the latest annual retirement study from the Employee Benefit Research Institute (EBRI). That’s the lowest level since the organization began ... [Read more]
Nobody’s Fool
Wednesday, April 1st, 2009
“Of what use is money in the hand of a fool, since he has no desire to get wisdom?” – Proverbs 17:16 No one wants to be thought of as a fool – not on April first, not at any time. The Bible uses that strong term only a handful of times in regard to ... [Read more]
Calculate Your Financial Comeback
Monday, January 12th, 2009
If you’re like most people, your investment accounts took a beating in 2008. Wondering when you might recover from those losses? The New York Times has a free online calculator that’ll help you estimate an answer to that question. Of course, no one knows what future market returns will be. And a wise person once ... [Read more]
Overdraft Protection For Less
Wednesday, December 10th, 2008
More than three-quarters of all banks automatically enroll their customers in the most expensive form of overdraft protection. That’s a key finding from a new FDIC survey, as reported by MarketWatch. If you are among the 25 percent of people who spend more than is in your checking account at some point in a given ... [Read more]
More Savings Now Insured
Wednesday, October 8th, 2008
Previously, I mentioned that the federal government is now insuring money saved in money market mutual funds. The move was made in response to a rare dip below a dollar for the value of shares in the Reserve Primary Fund. Two points of clarification are warranted. First, as reported by ABC News, the insurance only ... [Read more]
Controlling What We Can Control
Wednesday, October 8th, 2008
Eight in ten Americans feel stressed about money, according to a survey by the American Psychological Association. Nearly 60 percent of respondents say they are concerned about job stability, while 50 percent say they are increasingly concerned about their ability to provide for their family’s basic needs. How are people responding to the stress brought ... [Read more]
Anchors in the Storm
Wednesday, October 1st, 2008
“The grass withers and the flowers fall, but the word of our God stands forever.” – Isaiah 40:7 (Note: I was going to conclude our five-part series on getting out of debt this month. However, with the current state of the economy I thought we could all use a refresher on the timeless biblical principles ... [Read more]
Money Market Funds Now (Temporarily) Insured
Wednesday, September 24th, 2008
Whereas money market accounts are a type of insured savings account offered by banks and credit unions, money market funds are mutual funds, which until last week were not insured against investment loss. Historically, money market funds have been widely viewed as extremely safe. However, within the mix of bad news last week came word ... [Read more]
Making Sure Your Money Is Safe
Wednesday, September 24th, 2008
The news of the past couple of weeks has been unsettling for many people, with Lehman Brothers filing for bankruptcy, Merrill Lynch being sold, and AIG getting a government bailout. Even if you don’t have money in these institutions it can make you wonder how safe your money is. In the midst of all the ... [Read more]
Protect Yourself From Overdraft Protection
Monday, August 18th, 2008
If you use your debit card to make a purchase but don’t have enough money in your account, chances are good that your bank will allow the transaction to go through, helping you avoid the embarrassment of a checkout line rejection. However, as pointed out in a recent CNNMoney.com article, there’s a cost to the ... [Read more]
Changing Our Money Ways
Monday, August 18th, 2008
With our tough economy leading people to eat out less often, switch from SUVs to gas sippers, and generally spend less, an MSN columnist recently wondered what would happen if we all suddenly got and stayed money-smart? That is, what if we paid our credit cards in full each month (46 percent of households carry ... [Read more]
A Mysterious, Maddening Law of Economics
Monday, July 7th, 2008
The Wall Street Journal recently reported on the “insidious and unforgiving Law of Household Economics.” Don’t remember this one from Econ 101? It goes like this: “For every financial windfall that comes into your home, there will be an equal, unexpected household cost.” The article’s author recited several first-hand experiences, such as the garage sale ... [Read more]
Life Without a TV
Tuesday, June 10th, 2008
There was an interesting post on Free Money Finance about the many benefits of going without a TV, including the financial savings, and the quality of life improvements. Of course, there’s nothing inherently wrong with watching TV (especially when there’s a good golf tournament on!). However, it’s pretty easy to make the argument that we ... [Read more]
How to Save for College
Thursday, May 8th, 2008
The go-to source for information about saving for college has been the aptly named Savingforcollege.com web site. But Morningstar is giving that site a run for its money with a new analysis of the best and worst 529 plans, along with a comprehensive set of articles about the pros and cons of such plans and ... [Read more]
Saving for College While You Shop
Wednesday, March 26th, 2008
Upromise, the first of several programs that enable you to earn money for a 529 college savings plan while you shop, is offering a $10 bonus if you sign up and make a purchase before the end of April. Okay, $10 isn’t much when you consider how much college is likely to cost by the ... [Read more]
Your Number
Wednesday, March 26th, 2008
Financial services company ING is heavily promoting a new interactive web site designed to help you figure out “your number” – that is, how much money you’ll need to have saved by the time you retire. I took it for a test ride, and while it gets high marks for user friendliness, it doesn’t help ... [Read more]
Getting Ready for Your Rebate
Wednesday, March 12th, 2008
Are you among the 130 million taxpayers who will receive a rebate as part of the government’s economic stimulus plan? (Check eligibility requirements here) If so, with the government poised to begin sending checks in May, now would be a good time to decide what you’ll do with the money. Single tax payers will receive ... [Read more]
Too Few Playing the Savings Game
Wednesday, March 12th, 2008
Just 28 percent of all Americans say they save at least 10 percent of their income. That’s one of the findings from a new survey by the American Savings Education Council. What percentage of your monthly gross income do you save each month? For most people, 10 percent should be the absolute minimum. Do you ... [Read more]
Savings Momentum
Sunday, February 10th, 2008
A hot topic among “consumer behavior” researchers is “shopping momentum.” The idea is that once a shopper makes a purchase they cross an important threshold making it much more likely that they’ll make other purchases on the same trip. While marketers work at spurring faster first purchases, I wonder if the same concept might apply ... [Read more]
“The Best of Things”
Wednesday, October 3rd, 2007
“Be joyful in hope.” –Romans 12:12a In the movie, The Shawshank Redemption, prisoner Andy Dufresne demonstrates the power of hope. Wrongly convicted for the murder of his wife, his hope that the truth would one day come out sustains him. When the truth finally does come out, but a corrupt warden refuses to acknowledge it, Andy ... [Read more]
The Wisdom and Foolishness of Saving Money
Monday, April 2nd, 2007
“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.” – Proverbs 21:20 Three times during several recent financial workshops with college students I was asked a surprising and refreshing question: Does saving money reflect a lack of faith in God’s provision? It was ... [Read more]
