Walk With Money » Recession

Ask the Readers: How Much Does it Cost to Raise a Family? (Chance to Win!)

Robert Wilkinson — Tue, 12 Oct 2010 23:20:04 +0000

Those of you with kids are probably feeling the recession the hardest. In fact, many people are putting off having kids in the recession because of the "costs" involved with feeding, clothing, and gifting to a child.

Our good friend, Kimberly Palmer, understands what those who want to be financially secure may not be aware of the expenses of raising a family. She's addressed this issue (along with several other worhty topics) in her new book "Generation Earn"

In her new book, she addresses the following topics:

What should I be doing with my savings?
Should I take on freelance jobs?
Where should I invest my money?
Should I buy a house or keep renting?
Does it make sense to share a mortgage with my significant other?
Can I afford a baby?
Should I start a nonprofit?
How can I support the causes I believe in?

We want to know. What does it take to raise a family in a financially-secure way these days? If you share your tips or experiences, you'll be entered to win a $20 Amazon Gift Card and one copy of Kimberly's new book! (And don't forget to join us this Thursday at 4pm CST for our weekly Tweet chat! We'll have a chance to talk with Kimberly about the cost of raising kids. You can ask your best questions for another chance to win!)

Win one of 3 $20 Amazon Gift Cards or ...

Credit Card Offers Return To Those Who Are Qualified

Robert Wilkinson — Sat, 09 Oct 2010 06:20:09 +0000

Over the past few years we have witnessed a complete one-eighty in the way both credit card companies operate and the way consumers are using credit cards. Prior to the recession, credit card companies were practically giving away credit to anyone and everyone regardless of their ability to repay the debt. Consumers armed with easily obtained and in some cases excessive amounts of credit often made mistakes in the managing of that credit.

Photo by Gothem City via Flickr

When the recession hit, several things happened. Consumers began to fall behind on credit card payments or found themselves unable to pay them at all. New rules and regulations were put in place which require credit card companies to level the playing field with those who use their credit cards. High default rates and a new landscape in the industry resulted in many credit card companies pulling back on the credit card offers that were so easily obtained just a few years ago.

There are some signs that the economy is slowly starting to recover and with this recovery, credit card companies are once again sending out offers. This time around however, credit card companies are being a bit more picky about who gets offers and the terms that come with new accounts. Depending on your credit, you may have a mailbox full of offers or nary a one. Here we look at how your credit score will determine the type of offers you receive and the terms connected with each.

Bad Credit

The reality for millions of consumers hard hit by the recession is bad credit. If you fall in this category, specifically those with credit scores of 600 or below, expect credit card offers to be limited. For those accounts for which you do qualify, expect variable rates and an APR ranging from 19.9 percent to 29.9 percent. Annual fees have also returned and for those with poor credit, it could cost anywhere from $35 to $120 for the privilege of having the account. Lenders have always viewed those with bad credit as a higher risk, however in light of recent changes in the industry, credit card offers to those with poor credit are going to remain less than before the recession.

Average ...

What You Should Know About Homeowners Insurance

Robert Wilkinson — Tue, 28 Sep 2010 19:20:02 +0000

If you’re a homeowner, you know you need homeowners insurance coverage — but what do you REALLY know about it? Are you spending more than you need to or are you inadequately covered? Often, you could make a few small changes to your policy or how you put in claims to save considerable money over the course of the year. Here’s what you should know about homeowners insurance.

Photo by Woodley Wonderworks via Flickr

You Might Have More Coverage Than You Need

Many homeowners insurance policies increase your coverage amount automatically each year to adjust for inflation. Most of the time, this is probably a necessary expense. With the value of homes falling, increasing homeowners insurance protection may end up giving you more coverage than you need, and therefore cause you to pay higher prices than you need to in order to cover your home.

You can save about 10% of your insurance premium by lowering your replacement value around $50,000. Take a look at what your coverage is and adjust it to a more realistic value based on the current housing market.

Loyalty Doesn’t Pay as Much as Being a New Customer

During the recession, insurers have steadily been raising their homeowners insurance rates to compensate for the large losses they’ve experienced. They’ve also been focusing on enticing new customers by offering better deals and rates for new customers over their existing ones. Where loyalty used to pay in the form of loyalty discounts and offers; now it seems becoming a new customer of a company is going to give you the better deal.

When it comes time for your homeowners policy to renew, do some comparison shopping for quotes to see if you would get a better deal by becoming a new customer of a different company. Good places to start looking for homeowners insurance quotes online include our home insurance search tool and NetQuote.com. When getting quotes, see what kind of rates you can get for your automobile ...

Mint Map: Housing Sales

Robert Wilkinson — Wed, 24 Feb 2010 21:20:08 +0000

The Future of Mobile Finance

Robert Wilkinson — Thu, 11 Feb 2010 21:20:06 +0000

Mobile UPC Scanning

(Mu0x)

Perhaps the most intriguing development in mobile finance is how it extends far beyond simply bringing online banking to mobile phones. Indeed, the technology often extends beyond banking completely. One exciting example is mobile bar code scanning. While much remains to be done before mobile phones can scan and inventory bar codes as reliably as dedicated scanning equipment, early scanning programs already exist for the iPhone. One such program is RedLaser 2.0, which enables users to scan bar codes from a grocery store in real time. This has enabled consumers to comparison shop while standing in a store aisle by running scanned bar codes against a database ...

Only You Can Create New Jobs For This Country

Robert Wilkinson — Sat, 06 Feb 2010 11:20:16 +0000

2 Comments

If you’ve been following the financial news today, then you saw articles like this one from Yahoo Finance about the unemployment rate falling to 9.7%, which is a five-month low. That sounds like good news, and it could be, but when you look deeper into the numbers and throw some logic into the equation, it doesn’t make sense that the unemployment rate would fall that much. Does this mean the numbers are cooked? Are we on the road to recovery for job loss? I really hope so, because it’s the single most glaring eye sore to our economy right now. It’s the one road block that will keep our economy from heading in the right direction. Here’s a quote from the article I referenced above.

Beneath the headlines, the government reported the U.S. economy has lost 8.4 million jobs since the recession officially began in December 2007, a sharp upward revision from 7.2 million previously reported; that includes 930,000 jobs more than previously estimated in the 12 months ended March 2009.

and here is another quote from a financial analyst trying to explain the discrepancy in the numbers:

Tips To Survive The Credit Crunch

Robert Wilkinson — Fri, 05 Feb 2010 09:20:26 +0000

Today's article is written by guest blogger Trisha Wagner.

Does the economy have you feeling down? It takes a boat load of positive attitude to look at the current credit crunch and not feel a bit of apprehension regarding your finances. So if you find yourself worrying about what the next several months may have in store, you might find some relief by following these simple tips to help survive during a recession.

Diversify- Take this tip from top investors. Whenever the economy becomes unstable it is best to not have all your eggs in one basket. Your portfolio is not the only thing that should be diversified. You should never count on just one stream of income, especially when the economy goes south. The rate of unemployment is rising each day and to believe you are immune is nonsensical. If you investigate alternative forms of income now you can be better prepared for the worst if it should happen.
Budget- Since having a budget is one of the most commonly mentioned tips for staying solvent in any economy you may wonder why it is being mentioned here. As often as this tip is mentioned there remains a number of people who simply don't do it. For those of you not on a budget, start one today. Know from where and how much income you have to work with. Track your expenses to ensure you know where your money is going. When your budget is in place (which may take several weeks to get the hang of it) you will have an easier time cutting expenses.
Get rid of debt- Whether you have a small amount of debt or a large amount you should immediately work on eliminating the balance. If you think you need help on reducing debt use the vast amount of information available on the internet to help research your options- there are several of them- to find the process that will work best for you.
Unload the unnecessary- Some people are finding that the years of unabashed spending has lead to their current financial mess. Many of these same people can look around their home and find many items that they do not need or even use. You can sell items on ebay, have a garage sale or sell items in your local newspaper. This can simplify your life in addition to bringing extra money into the home. A few people may be able to take this a step farther. Do you have two or more cars? Do you need each of them? By downsizing your lifestyle you can infuse money into your budget while getting rid of non-necessities.
Emergency fund- Don't forget to contribute to your emergency fund. This is similar to having a budget, people know they should but often fail to follow through with contributing to this fund. Emergencies will happen at some point in your future and having money set aside to cover or at least offset the financial burden you are more likely to make it through a financial emergency.

Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

Photo Credits: 1

Originally posted 2009-02-02 05:25:58. Republished by Blog Post Promoter

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The New Frugality: Consume Less, Save More, Live Better

Robert Wilkinson — Thu, 28 Jan 2010 19:20:27 +0000

By Lynn Truong

Last week on Patt Morrison I heard Chris Farrell talking about "The New Frugality" and the trend towards a sustainable lifestyle. (I actually called in and mentioned Wise Bread -- you can hear me on the segment.) I was stoked that he was familiar with Wise Bread (really, we're on his blog roll!). After the show, I read his new book, The New Frugality: How to Consume Less, Save More, and Live Better, and reached out to Chris about doing an interview.

I felt this topic was extremely relevant for us at Wise Bread. When we started three years ago, frugal was a dirty word. Frugal meant cheap. It meant denying yourself pleasures. It meant sacrifice.

But from the beginning, Wise Bread sought to change this idea. We wanted to show that spending wisely meant getting more. Spending thoughtfully meant adding value and quality to purchases. And being able to get what you want for less meant, well, that was just cool.

Chris Farrell's book goes into this concept of a New Frugality (totally different than the Old one) and shows how it works and why it's here to stay. He emphasizes that we now have a greater focus on community, the environment, and living sustainably. And he explains how the economy will shift to accommodate our new attitude towards spending.

Here is my interview with him. Please check out his book, The New Frugality: How to Consume Less, Save More, and Live Better.

Lynn
What was your inspiration for writing the book?

Chris
It was a couple things. Part of it was just the impact of the Great Recession and the problems that it caused people. But also I just noticed that a lot of people I knew were being frugal and green.

One of the things that always had gotten to me was that the conversation about frugality was always about what we can't do. That had always troubled me. Then I noticed that the new frugal trend was based on sustainability. I realized this could be a big deal. The thing about sustainability is that it's really an optimistic act. You believe that you're going to make a difference. So now frugality isn't you're being cheap or denying yourself, but you're helping your community and at the same time helping your pocketbook.

Lynn
Is this why you call it the New Frugality, because the old frugality is just about saving money for money sake but this is more of a mindful and value added lifestyle?

Chris
Yes, very much so. Thinking about my parents, I used to roll my eyes at my dad who unplugged all the outlets and the hand me down clothes and all that. My parents did that because we didn't have much money. Now, a lot of these things people are just doing because it's going to make the world a better place. So it's a very different mindset, and financially you kind of end up in the same place, but the motivation is very different.

Lynn
You're right. On Wise Bread, we talk about things like how much electricity your electronics are taking when they're plugged in and sewing your own clothes. These are things that our grandparents did, but now we're doing it for completely different reasons. Now, frugality is not just about spending less money. We might buy local and organic which can cost more than conventional, but it's just as frugal as buying used or repairing things instead of replacing them. What is the cause of this shift from cost to value?

Chris
I think there's a number of trends going on. It seems that everyone's had this experience during the recession of sort of looking in the apartment, looking around house and saying, why do I have all this stuff? So in one sense, and this may sound bizarre because we're just coming out this recession with a 10% unemployment rate, we're a really wealthy society. And I think we increasingly value things like education and health, because that's what wealthy societies do. And what downturns do is they often accelerate social trends that were gathering momentum. My sense is that's partially what happened in the Great Recession.

I did an event in Pasadena and a young woman there was saying that among her friends, being frugal was kind of cool. And that there's a little bit of keeping up with the Joneses. I said I think that's true, but you know what, that's a good keeping up with the Joneses. There's a lot of benefit to that. It's sustainable and it's sort of fun. Communities like Wise Bread create a very fun aspect to frugality. It's a community of ideas, and not all of them will work for you -- it depends on your lifestyle, your temperament, stage of your life -- but it's really neat to have all the ideas out there, and to experiment to see which ones are going to work for you.

Lynn
When people started to save more and spend less, there was kind of a backlash against that. People argued that because our economy is based on consumerism, we all were supposed to do our part for the economy.

Chris
It drives me crazy. First, you're not responsible to the economy. You're responsible to your own household finances and your own values and the values that you share with other people in the community. But you're not responsible to this abstract thing called the economy. And so it drives me a little crazy because people were saving more because they needed to. They had borrowed too much and were at risk. And people were losing their jobs.

I think more importantly though, is that the American entrepreneur is endlessly inventive. And if people aren't spending money on certain things, they might spend their money on other things. They'll spend it on experiences or within the community. For example, 20 years ago I tried yoga and failed miserably. There was yoga back then but it wasn't such a big deal. Now yoga's really a career. People really take it seriously. Same thing with massages. 20 years ago there ...

The New Frugality by Chris Farrell

Robert Wilkinson — Wed, 27 Jan 2010 17:20:46 +0000

The New Frugality by Chris Farrell is a new personal finance book that discusses a growing trend in America towards frugality. As we claw our way out of the Great Recession, American families are going back to smarter and safer spending after a near decade at the buffet table of cheap credit. This isn’t a book with a million different ways to pinch a penny, it’s a book that seeks to teach you how to be smarter with your money in actionable ways.

For most books, there’s usually one big idea followed by dozens of examples. Once you understand the big idea, there’s not that much more too it. For example, Automatic Millionaire’s main idea is that if you make something (saving) automatic, then you’re more likely to accumulate wealth. Set your 401(k) contribution when you start work and even if you never look at it again (which is dangerous), you’re going to be better off. The Millionaire Next Door’s main idea was that there are millionaires all around you and they didn’t do anything special, outside of being smart with their spending and their savings, to get there. The flash and jazz of superstar athletes or actors was just that, flash and jazz, but there are plenty of quiet ...

The Great Depression: A Diary – Book Review

Robert Wilkinson — Sat, 14 Nov 2009 03:20:11 +0000

Benjamin Roth was a lawyer in Youngstown, Ohio during the Great Depression and kept a regular diary of his impressions during the era. The diary was required reading for his son who also became a lawyer at the firm he started, in order to understand what their clients went through. After the recent crash, it has now been published as a book called The Great Depression: A Diary.

The book is primarily a straight transcription of the original handwritten journal, with a few editor’s notes to provide a little additional background when needed. Each entry is dated, and it is very interesting to see the first-person perspective unfold over time. Indeed, imagine a “blog” back then and you’d get this. Roth was not an economist or historian, and simply wrote down what he saw.

Historical Similarities
It is easy to find many similarities between the recession back then and now. The stock market and real estate market boomed, speculation was rampant, and then it all collapsed. Banks were stuck with mortgages that nobody could afford to keep up with, and foreclosures were everywhere. Unemployment was very high, although it was 25% back then as compared to 10% now.

[9/19/32] It looks as tho the Democrats will win because everybody wants a “change”.

Sound familiar?

Roth considered himself a Republican, and did worry a lot about “a shift towards socialism” and inflation always being around the corner. The government did end up spending a lot of money to stimulate the economy, although not exactly the same way as now. On the other hand, many things that seemed like radical changes back ...