And we thought N.J. was only about the Sopranos…… February 27, 2012
Posted by forwardfinancialplanning1 in Financial Planning, Investing-General, Personal Budgets.add a comment
Here’s an idea emanting from the state of New Jersey that should be implemented nationwide. As extracted from a February 22 article in the Hudson (County) Reporter, “ Starting with the 2010-2011 ninth grade class, all students (statewide) must take 2.5 credits in financial, economic, business and entrepreneurial literacy. By graduation, students will demonstrate an understanding about how the economy works and their own role in the economy and develop the necessary skills to effectively manage personal finances.” The article further commented about how important it was for graduating students to realize that the pizza they charge while in college could wind up costing $40 if enough interest accumulates on the credit card account.
Gee, I wonder if they’d be willing to offer remedial courses for our elected officials in DC???
Why don’t we act on our savings beliefs? October 24, 2011
Posted by forwardfinancialplanning1 in Personal Budgets, Retirement Savings.add a comment
Many surveys and studies have noted that Americans display serious deficiencies in their financial literacy. This data is often cited as an explanation for our lack of retirement preparedness. However, one has to ask if improved financial education alone will change this circumstance?
The 2011 Employee Benefits Research Institute (EBRI) Retirement Confidence Survey suggests that knowledge alone won’t improve our nation’s retirement preparedness. The EBRI found that while 55% of survey respondents aged 45-54 think they will need more than $250,000 for retirement, only 15% of this group has accumulated this amount. Likewise, 48% of those aged 55+ estimate they’ll need $250,000 or more, yet only 19% have reached or exceeded that figure. So, it’s clear that knowledge and awareness alone will not improve the situation.
My state is smarter than your state December 20, 2010
Posted by forwardfinancialplanning1 in Credit Cards, Financial Planning, Investing-General, Personal Budgets.add a comment
The FINRA Foundation has been conducting survey research into the financial literacy and fitness of our country. The results, while somewhat discouraging, are nonetheless interesting. The website, www.usfinancialcapability.org contains state-by-state comparisons on topics such as “spending vs saving”, having a “rainy day” fund, non-bank borrowing (such as payday loans), and comparison shopping for most favorable credit card terms. The site also attempts to measure and compare financial literacy with a five question quiz on some basic financial concepts. Unfortunately, the nationwide average score is only three correct answers which suggests that the general public could clearly benefit from the advice available from a competent financial planner. Take the quiz and see how you stack up!!
“I owe my soul to the company store”-2010 version September 17, 2010
Posted by forwardfinancialplanning1 in Credit Cards, Personal Budgets.add a comment
Several recent posts on this site have lamented the woeful state of household balance sheets in the United States, as well as that of the federal government. An article in the Harvard Business Review entitled, “Consumer Credit: The Next Crisis” makes the following observation. It states, “The degree to which consumer’s have come to depend on easy, inexpensive credit is a far greater threat to the economy than most realize. To pay it off, the average U.S. consumer would have to hand over every penny of his take-home pay for 16 months.” Well, maybe not being able to afford to eat will solve our national obesity problem……………………depressing!!
The Greatest Generation—at spending September 11, 2010
Posted by forwardfinancialplanning1 in Personal Budgets.add a comment
Tom Brokaw dubbed the World War II generation, “The Greatest Generation” because if their sacrifices and commitment to bettering the world. While it’s always questionable to paint any group with such a broad brush, the Baby Boomers may have earned a dubious distinction for themselves.
A recent study by James Golmant and James Woods in the September issue of the American Bankruptcy Institute’s ABI Journal noted that bankruptcy filings are increasing fastest for people between the ages of 55 and 64. There was a 65% increase in filings by boomers between 2002 and 2007 and baby boomers accounted for 42% of all filers in 2007.
The authors cite excessive debt as the likely cause, pointing out a Survey of Consumer Finance study which measured the % of families with large debt payments relative to their incomes. The percentage share of families with a debt ratio of at least 40% of income rose fastest for those older than 45 in the period 2004-07.
And, the housing collapse is only making this situation worse. The AARP observed in September 2008 that 28% of mortgage delinquencies and foreclosures were for people aged 50 and older.
These statistics, in addition to the baby boomers’ aggregate lack of retirement preparedness, paint a discouraging picture for the future. If anything, let’s hope that younger generations learn from these mistakes. It’s been said that ” those who ignore history are doomed to repeat the mistakes of the past”. Perhaps this economic episode should become required learning in our nation’s schools.
It’s still debt……… August 15, 2010
Posted by forwardfinancialplanning1 in Credit Cards, Education Planning, Personal Budgets.add a comment
Much has been written about the enormous revolving debt load of the American people. Of course, most of this outstanding financial obligation stems from credit cards. Much less heralded, however, has been a similar run-up of student loan debt. According to Mark Kantrowitz, publisher of Fin Aid.org, outstanding student loan debt reached $829.8 billion in June 2010—-a figure which exceeds even the comparable total of $826.5 billion for revolving credit. Mr. Kantrowitz also estimates that $300 billion of this debt has been accumulated in just the past four years.
Some might argue that student loan debt is “good” debt, in that it is purportedly used to improve one’s earning power. Further, they might argue that student loan interest is often tax deductible. Nonetheless, it is debt just the same and in most cases cannot be discharged in a bankruptcy proceeding. While it’s long been known that college graduates earn more than individuals lacking degrees, a diploma comes with no guarantee. Students and parents should weigh the pro’s and con’s thoroughly before over-indulging!!
It’s OK to ask for help in the earlier years April 12, 2010
Posted by forwardfinancialplanning1 in Financial Planning, Personal Budgets, Retirement Savings.add a comment
Women are faced with some unique financial planning challenges when compared to men. Women have a life expectancy that exceeds male life expectancy by several years; thus, their retirement funds must last longer. Women traditionally earn less than men, even when performing similar work (the well-heralded “gender gap”). And, women often have work careers interrupted by raising children and caring for aged parents. These realities often inhibit their account growth in both defined benefit and defined contribution type retirement plans.
Despite these greater retirement planning challenges, it’s been observed that many women defer to their husbands with regard to financial planning needs. For many women, involvement with a financial advisor only emanates after a traumatic event such as divorce, death or disability of a spouse. I think we’d all agree that everyone is vulnerable after such a life-changing circumstance and many fall prey at this time to unscrupulous or self-serving peddlers of unsuitable financial products.
According to the National Center for Women and Retirement Research, 75% of women are widowed at the average age of 56 and one in four of them end up broke within two months of being widowed. Sobering statistics such as these should serve as a powerful incentive for most women to begin building a relationship much sooner with a trusted financial advisor. Or, at a minimum, they should at least become more deeply involved in the family’s financial planning process.
