Archive for May, 2013

How America Spends Money on Food

Posted on May 30, 2013 by Saldutti

Thirty years ago, the average household spent about 17% of its income on food. Today it spends about 11%. It’s a global trend: Food is getting cheaper relative to incomes everywhere with rising incomes. But there’s also a distinctly American thing going on here. We spend less of our cash on food than any other country – half as much as households in France and one-fourth of those in India, according to Bloomberg Business Week. In fact, if you consider “cheap eats at home” the most important measure of social welfare, the United States is the greatest country on earth….

Study: Higher Levels of Homeownership Can Kill Jobs

Posted on May 28, 2013 by Saldutti

Homeownership is a vaunted cornerstone of the American Dream. It’s viewed as providing a path to financial security and the good life. And it’s often posed as a barometer of the health of the economy.  However economists have long wondered whether higher rates of homeownership can actually make unemployment even worse. One possibility is that if people are tied down to their homes, it’s harder to move to find a suitable job. So maybe more people should rent. Back in the 1990s, British economist Andrew Oswald first showed that higher levels of homeownership were correlated with higher levels of unemployment…

How Fast Should You Cut Your Debt?

Posted on May 24, 2013 by Saldutti

Unfortunately, there is no quick fix to eliminate debt. Not only does it take patience, time and diligence, but also a clear understanding of why we get ourselves into debt in the first place. Was it that our wants were greater than our means? Did we think we could pay down our debt, only to realize after our bills, we had nothing left over? Determining how fast we can and should eliminate debt starts with a few simple steps. 1.      Write it down. Get a visual handle on where you are with your mortgage, home equity, auto, medical, student loan…

Just How Useful Are "Free" Credit Scores?

Posted on May 21, 2013 by Saldutti

Credit scores were long something that lenders got to see and consumers only found out about later. Now, pretty much anyone can take a look at their credit scores whenever they want to, but it’s not clear which of those scores matter. Most scores that consumers see for free are not the same ones bankers are using to weigh customer creditworthiness.  But according to a recent Consumer Federation of America report, consumers remain confused by credit scores.  With dozens of scores on the market, it’s hard to figure out which ones count and what they mean. A credit score is a…

Cyber Attacks Continue to Overpower Banks

Posted on May 14, 2013 by Saldutti

Since September, at least 13 of the nation’s biggest banks have experienced cyber attacks, rendering their online and mobile banking inoperable – with several institutions being assailed repeatedly. Hacktivists who call themselves the al-Qassam Cyber Fighters have claimed responsibility for the incursions. Why can’t the targeted institutions, some of which have extremely sophisticated technology, defend themselves against the onslaught? The main answer lies in the massive volume of the attacks, which unleash a torrent of data at websites with the goal of overwhelming them. “Twelve months ago, the maximum protection for a major financial institution was 10 gigabytes per second,”…

Americans Are Secretive About Their Financial Woes

Posted on May 10, 2013 by Saldutti

One of the reasons financial literacy is so abysmally low among Americans is simply the fact that the subject itself is somewhat of a taboo.  Parents hide their financial woes from children to protect them. Spouses hide their financial mistakes to save face in front of their partners.  Children grow up thinking money is a dirty word that parents fight about, that student loan applications are simply too confusing to bother deciphering, and that if they overdraw their bank accounts, then it must be the Big Bad bank’s fault.  It’s a vicious cycle, and although the fallout from the Great…

Don't Overlook Your Biggest Investment

Posted on May 07, 2013 by Saldutti

We often hear that the biggest investment we will ever make is buying a home. It’s an emotional experience that involves a lot of time and energy.  In fact, in 2010 the median home price in the U.S was $222,000.  According to the National Automobile Dealers Association, the average price of a new car sold in the U.S. is about $30,000; the average used car is $11,850. Once again, it involves hours of research, test-drives and time at the dealership.  But many people overlook their biggest investment. It’s one that is larger and more important than either of the previous…

Characteristics of Debt-Free People

Posted on May 02, 2013 by Saldutti

The good news: The percentage of U.S. households holding some form of debt declined from 74% to 69% between 2000 and 2011, according to the U.S. Census Bureau. The bad news:  At the same time, the median amount of household debt increased over this period from $50,971 to $70,000.  Many families find themselves deep in debt – they have so much money going out, they can’t keep their head above water. Whether it’s an overbearing mortgage, credit cards, a hefty car payment or just making poor choices, their debt keeps them from making progress.  All of their income gets sucked…