Posted by: Kate Ashford | September 3, 2010

Money Clips (9.3)

Money Clips: A collection of interesting news that may or may not be about money.

Concealed Weapon

You can't carry a concealed weapon into a Sprint store, but it's sometimes handy in a Walmart parking lot. You know, in case of carjacking.

GPS dating? Maybe not. Evidently, lonely hearts can now use a GPS app to connect with other singles in their immediate vicinity. Advantage: You could find everlasting love. Disadvantage: You could get stalked by a serial killer. From ABC News.

How to get yourself removed from a jury: Comment publicly on the defendant’s guilt. While the trial is in progress. One juror in a recent case wrote on her Facebook page that it was “gonna be fun to tell the defendant they’re GUILTY.” Super classy. From the Kansas City Star.

The trouble with trying to carjack a Texan… is that sometimes they’re packing heat. An armed attacker who tried to take a car from a 56-year-old woman in a Walmart parking lot ended up fleeing after she whipped a pistol out of the car console. She put at least one bullet hole in his SUV as it sped away. From the Houston Chronicle.

“Yes, okay. I suppose I smuggle snakes.” A Malaysian man admitted he was smuggling wildlife, but only after his bag burst open on a luggage conveyer belt in Kuala Lumpur International Airport…revealing 95 live boa constrictors. From CBS News.

Got a health insurance claim denial? Bundle.com’s “Do One Thing” series tells you how to appeal it.

Leave. Your. 401(k). Alone. Just another reminder that tapping your retirement fund to pay for stuff isn’t the smartest idea you ever had. From USA Today.

Have a great weekend, all. And look out for Earl.

(Photo from alist on Flickr.)

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Posted by: Kate Ashford | September 1, 2010

Let’s Talk About Death, Baby

Grim Reaper
Okay, so. Let’s play a game.

  • Do you have a child under age 18?
  • Do you have a partner or spouse who’s dependent on your income? (Or anyone, for that matter?)
  • Do you have a mortgage or other significant debt?

If you answered “Yes” to any of those questions, you need life insurance. I know, I know—it’s boring and tedious and who wants to think about death? But, as my husband says, they call them “accidents,” not “on-purposes.” No one plans to die young.

Evidently, according to a recent piece in the Wall Street Journal, almost a third of U.S. households are going without life insurance coverage. And among households with kids under 18, some 40 percent said they’d immediately have problems paying for basic needs if a breadwinner died, and another 30 percent said they’d have issues after a few months. In other words, a lot of families would be in a world of hurt.

And, guys, life insurance is cheap. I promise you. It is. A healthy 35-year-old man can get $250,000 worth of coverage for as little as $13.50 a month, according to Accuquote.com.

My husband and I both got life insurance policies after our daughter was born, and we have a substantial amount of coverage for an unsubstantial amount of money.

The process isn’t scary. We both called Accuquote (I know the company and I like them) to get pricing from a variety of life insurance companies, and we just had to provide some basic information about ourselves and our hobbies. A couple of weeks later, we both had a medical exam. The examiner came to our apartment. Super easy. A couple of weeks after that, we were approved and had active 20-year policies. Done.

So why are you waiting?

(Cartoon from thomastoons on Flickr.)

Posted by: Kate Ashford | August 26, 2010

Ever the Ridiculous Optimists, Americans Are

Houses

A pretty picture, no?

If recent events have taught me anything, it’s that real estate appreciation isn’t a sure thing. And that buying a home as an investment is kind of a silly move. You should buy a home because you want to live in it, because it’s in a good school district, because you can imagine growing tomatoes in the backyard. And yes, it’s sometimes a reasonable way to build up a little equity, because some percentage of the money you’re paying every month goes toward the mortgage principal. If you buy a $300,000 house and make your payments for 30 years, eventually you might own property worth something like $300,000 (give or take some inflation, appreciation or depreciation).

But it’s no longer a reasonable way to build up a LOT of equity, as people used to do. Buying a $300,000 home and expecting it to be worth $450,000 in four years is a thing of the past.

Unless you’re a new home buyer in Boston, I guess. In the latest round of a survey by economists who ask new home buyers what they think will happen to housing prices over the next 10 years, Boston buyers said they expect prices to rise by 12 percent. Per year. Over the next decade.

Let’s think about that for a second. That means that Boston home buyers believe that their $300,000 home will be worth something like $660,000 in ten years. That seems reasonable enough.

Oh wait. NO IT DOESN’T. Are these people high? Home sales dropped 27 percent between June and July this year, and Boston homeowners think they’re still sitting on the real estate market of 2004.

The good news (I suppose) is that buyers have somewhat more realistic expectations about next year’s price growth, but they evidently still dream of real estate days gone by when it comes to the future.

The New York Times had an interesting article recently about the idea that housing is fading as a means to build wealth. In fact, until the 1950s or later, houses used to be viewed like cars—“as a consumer durable that the buyer eventually used up,” the article says. The idea of housing as an investment didn’t occur until after the second World War, and decade after decade, houses began to appreciate faster and faster.

By the late 1990s… the rate was 4 percent a year. Happy homeowners were taking about $100 billion a year out of their houses, which paid for a lot of good times.

“The experience we had from the late 1970s to the late 1990s was an aberration,” said Barry Ritholtz of the equity research firm Fusion IQ. “People shouldn’t be holding their breath waiting for it to happen again.”

Unfortunately, I think Americans are still holding their breath. How long will it take us to recognize that buying a house is no longer about building superhuman wealth?

(Drawing, “Sold,” from moonape on Flickr.)

Posted by: Kate Ashford | August 25, 2010

College Savings: Got Some?

College costs
Depending on the calculator or chart you consult to determine how much you should be socking away for college, the answer can be downright horrifying.

Example: According to this chart from SavingForCollege.com, even if you send your child to public school and start at birth, you should be saving $432 per month. PER CHILD.

Heaven help you if you’re even contemplating a private university, in which case you should be siphoning off nearly $1,000 from birth for the privilege. (Isn’t that, in itself, an argument against sending your kids to a private school?)

But yesterday there was a New York Times story that made me breathe a little bit easier. Evidently Fidelity Investments put together their own estimates of what parents should be saving for college, based on income, financial aid estimates, and whether they’re leaning public or private.

And the answers are somewhat more reasonable.

  • Making $50,000 a year? You should be saving $160 a month for a public school.
  • Making $75,000? Save $190.
  • Making $100,000? Save $250.

Thinking private? You should be saving $410, $410 or $460 a month, respectively.

Now, I’m not saying that $160 a month isn’t a chunk of change. But it’s certainly less daunting than $432 per month, and at 3.5% of household income, it seems like a number that might be within reach. Even the $250 per month is only 3% of income for the $100,000 family.

But frankly, the lesson in all this is simple: The earlier you start saving, the less you actually have to save every month. Right now, my husband and I are putting $100 a month into a 529 for our 17-month-old. If we do nothing else, and we earn about a 6% return on that money (hahahahaha, but humor me), we’ll have more than $35,000 by the time she’s ready to go to school.

No, it won’t cover all of her costs. But it’ll definitely help. And I’m sure if you asked her if she’d rather have a $35,000 head start or a $5,000 head start, she’d choose the former.

How are you handling college savings?

(Cartoon from drharoldland on Flickr.)

Posted by: Kate Ashford | August 20, 2010

Money Clips (8.20)

Money Clips: A collection of interesting news that may or may not be about money.

Candlelit Dinner

These ladies get candles. Diners in a new restaurant? Not so much.

Talk about flying blind. A new restaurant in New York plans to use blind waiters to serve meals to diners in total darkness. (And guess what? It’s not the first one to do so.)

1 in 5 Americans are ridiculous. A new poll from the Pew Forum on Religion and Public Life found that 18 percent think Barack Obama is a Muslim. (Which is incorrect, folks. INCORRECT.) That’s up from 11 percent in March 2009. Sigh. From ABC News.

The 4-day school week is (wait for it) a bad idea. A Georgia school system went to a 4-day school week and nearly cost 1,000 kids their high school diploma. Way to go, U.S. educational system. From the AJC.

Stupid thief story of the day. A man accused of breaking into a Georgia elementary school left his cell phone behind. Police scrolled through his address book and called the listing titled “Ma.” His mother gave the police her son’s name.

Anderson Cooper staying silver. A company marketing a pill called “Go Away Gray” has offered him $1 million to get rid of his silver hair for five years. Anderson Cooper is politely declining. From NYMag’s Daily Intel.

“Stop giving money to my sister.” Do your parents keep bailing out a sibling even though she’s irresponsible and money unsavvy? You’ll like this latest Bundle.com Money Confession.

Have a great weekend, kids. If you decide to burgle someone, don’t leave your phone behind.

(Photo from anna__k on Flickr)

Posted by: Kate Ashford | August 18, 2010

Income and Infidelity

Cheat

A cheating egg. Somewhat different from a cheating heart.

Well, here’s depressing news: In relationships in which the woman makes more than the man, the man is more likely to cheat, according to a study from Cornell University. And in relationships where either the woman or the man makes significantly more money, they’re both more likely to cheat.

Evidently making much less bank than his significant other threatens a man’s ideas of himself as the king of the castle, so he looks elsewhere to boost his fragile male ego. (Or so the theory goes.) And women and men making more tend to have ample opportunities to fool around—they might travel more, work longer hours, etc.

The relationships that were most infidelity free were the ones in which both partners made a relatively equal amount of cash, or when the woman made slightly less (about 75 percent of what the man made). And couples who were more educated or attended regular religious services were less likely to stray.

But here’s what I wonder about: These numbers came from a study of 9,000 people beginning in 1997, when they were children, and these results come from the years 2001-2007, when participants were between 18 and 28 years old.

So included in the 7 percent of men who cheated and 3 percent of women who cheated were, well, some pretty young adults. They weren’t necessarily married, and they weren’t necessarily particularly mature. I know plenty of people who did stupid things while they were in college who wouldn’t dream of cheating on their spouses now that they’re older and married.

I’d be more impressed if these results came from couples in their 30s or 40s with established careers and years-long relationships.

Where’s that study?

(Image from joyjwaller on Flickr.)

Posted by: Kate Ashford | August 12, 2010

Going to College…and Living at Home?

Dorm Room

Remember dorm rooms? What if you lived at home instead?

When I went to college, I moved to a city roughly three hours away from my parents. I lived in the dorms my freshman year, and after that I lived with roommates in off-campus apartments. I was lucky to be able to do so—I lived in Virginia and went to an extremely affordable in-state university.

But I also didn’t go to college in the midst of a recession. In fact, the job market was so crazy when I graduated that I’d already had a position lined up for six months. (Remember those days?)

College is more expensive now and money’s tighter, so families are doing what they can to cut costs, according to the third annual “How American Pays for College” report. About three-quarters of families reduced spending to make school more affordable and nearly half bumped up work hours or earnings.

But the most interesting statistic is this one: Some 43 percent of families say their student lived at home.

Well, obviously that saves money. If your in-college kid is still living in her bedroom upstairs, you’re saving a bundle on housing costs. And unless you live in a city that’s home to a large university of some kind, you might also be saving cash by sending her to community college for a couple of years.

Frankly, I think that’s smart. Experts have long suggested that families send kids to community college for a few years before transferring (and getting the degree) from the bigger school to save money.

But I also wonder whether these students are missing out on the college experience, which often serves as the stepping stone to an independent adult life without Mom and Dad. College is a nice little microcosm where you can learn to pay bills on time and juggle multiple responsibilities. Oh, and maybe cook once in a while.

But I also don’t believe in going miles into debt for an experience, and if living with Mom and Dad is what gets you a college degree without saddling you with $50,000 in student loans, then that’s what you do.

If you had it to do over again, would you live with your parents while you went to a local college?

(Image from Wheelock College Archives on Flickr.)

Posted by: Kate Ashford | August 10, 2010

Text Education – and a POLL

Texting at dinner

Rude? Acceptable? (Take the poll!)

About seven years ago, I spent a few months living in London. While I was there, I purchased a cell phone and used prepaid minutes to communicate with friends and coworkers. But since cell service was expensive at the time, mostly I just texted. That was back when no one in the U.S. had text messaging, and I thought it was great. Why call when you can text? It’s so easy! So quick! So efficient!

A couple of years after I returned to the U.S., text messaging started to catch on here. And now, look at us. We can’t walk down the street, eat or drive without simultaneously typing away on our phones. I recently had to make a rule for myself: No texting while crossing the street, for fear of being hit by a bus. Isn’t that sad?

The more I notice it, the more I think about text etiquette. Recently I ran across a New York Times article, “To Text or Not to Text,” in which the author wonders when texting is appropriate:

“When is it acceptable to send texts and tap out e-mails around other people? Is it O.K. to check and send e-mail during a work meeting? What about at a family dinner? Do those rules vary depending on the age of the people around you?”

I frequently keep my phone on my lap when I’m eating dinner out, but that’s because I have a toddler at home, and I like to be accessible to the babysitter. I’m certainly not typing messages to my friends between courses. But I know plenty of people who do. Sometimes it bothers me, sometimes it doesn’t.

But there has to be a line, doesn’t there? Certainly you wouldn’t whip out your Blackberry and start texting your buddies in the middle of a fancy work dinner (or at least, I hope you wouldn’t), so why is it any different if you’re eating dinner with friends? Or with your spouse or children? When my daughter is old enough to have a cell phone (do I really have to buy her one?) the dinner table will be a phone-free zone.

What’s your call? Is texting other people rude when you’re visiting with someone? At dinner? In a meeting? If so, how do we discourage it?


(Photo from tantek on Flickr.)

Posted by: Kate Ashford | August 6, 2010

Did You Have an Allowance?

Money on Trees

If only money actually DID grow on trees.

I never had an allowance when I was a kid. When I needed money, I asked for it, and I rarely asked for money I didn’t need. But I’ve also never been particularly great about sticking to a budget (there, I said it), and sometimes I wonder whether an allowance might have boosted that particular skill.

One thing that did help: Getting a checking account when I got my first job at age 18. (I was a waitress at Pizza Hut. Let’s not talk about the hat.)

Today, less than half of teens (age 13 to 17) get an allowance from their parents, and only about a third have a checking account, according to a Capital One survey. And evidently, 70 percent of teens with a checking account rate their money management knowledge as “good” or “very good,” compared to 58 percent of teens who don’t have one.

Half of teens say they want to learn more about how to manage their money, and they’d prefer to do so from their parents, but only 27 percent say their parents talk about money with them on a regular basis.

I will say this: I fully intend to give my daughter an allowance, once she’s old enough not to eat the money. (Literally.) And I plan to talk to her about checking accounts, credit cards, and smart spending, because if I don’t, who will?

The levels of debt in this country suggest that a lot of people have a tough time living within their means, and I wonder how much of that could be prevented if parents took the time to teach their kids the money basics. Or, another idea: I spoke to a financial planner for a story recently who wished that high schools and colleges taught a mandatory course in personal finance.

Did you have an allowance? And how did you learn about money? From your parents or another source?

(Photo from Tyler_Willoughby on Flickr.)

Posted by: Kate Ashford | August 3, 2010

My New Favorite Book on Wine

Good Better Best WinesI have a friend who’s a wine connoisseur. (Becca? I’m talking about you.) It’s awfully nice to share a meal with her, because she really knows her wine menu. And she’s got an impressive collection of bottles in her basement—all carefully selected, all wonderful.

On my own, however, I’m a buy-the-bottle-with-the-prettiest-label kind of girl. I see no need to purchase anything that costs more than $20, because I’m not an advanced enough wine drinker to taste what I’m gaining in a more expensive bottle.

But anyone who’s ever shopped for $15 wine knows that there’s plenty of selection—and some of it’s not all that great. So I was excited when I received a copy of Good Better Best Wines: A No-Nonsense Guide to Popular Wines a few weeks ago. The author, Carolyn Evans Hammond, is a qualified sommelier, and this book is my new best friend.

In it, Hammond presents winning (and cheap!) wines in every conceivable category, from Sauvignon Blanc to Shiraz to dessert wine. Within categories, they’re organized by price, from $4.99 and under to $11 to $15. Within a price range, they’re ranked: Good, Better, and Best.

So, for instance, are you looking for a Merlot for $8 to $11?

  • Good: Fetzer Vineyards Valley Oaks
  • Better: Bogle Vineyards
  • Best: Rosemount Diamond Label

The book is easy to use, and her recommendations are accompanied by serving suggestions and wine storage tips. Frankly, the only problem I face is that the wine stores near me don’t always carry some of the wines on her lists—an issue which is probably unique to Manhattan, where retail space is limited. But when I can find it, I’m a lot more confident about buying a bottle of Cavit Collection Pinot Grigio (a “Best” in the $8 to $11 range).

It also makes a good little gift. Check it out.

http://www.amazon.com/Good-Better-Best-Wines-No-Nonsense/dp/1592579779/ref=sr_1_1?ie=UTF8&s=books&qid=1280860302&sr=8-1

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