-
Are Money-Market Funds Safe?
Tweet Share on Facebook September 18, 2008 Comment (10)Consumers looking for a safe place to store their money and also earn interest have long turned to money-market funds, which invest in short-term bonds and are usually considered virtually risk free. But this week's news of Lehman Brothers' bankruptcy and the federal government's bailout of American International Group called the safety of such funds into question. At least one, the Reserve Primary Fund, lost value, partly because it held Lehman bonds.
But that doesn't mean consumers with savings in money-market funds should cash out and store their money in an FDIC-insured bank account, which usually pays much lower interest rates. It does mean, however, that it's a good time to check out the details of how your money-market fund is managed and what kind of securities it holds.
-
Reporter’s Query: Got a Money Problem?
Tweet Share on Facebook September 18, 2008 Comment (2)For an upcoming video project, I'm looking for someone in the Washington, D.C., area who has a financial question or problem related to saving money, retirement, or paying off debt. If you fit this description and are willing to talk about it, please E-mail me at alphaconsumer@usnews.com.
-
Sexism from Sales Reps
Tweet Share on Facebook September 17, 2008 Comment (4)Megan at Jezebel tells her refinancing story, which involves being treated poorly by loan officers. She writes:
This guy was from the hard sales side of the aisle. He kept telling me how he, and he alone, was looking out for my financial interests. Why would I want my mortgage rate to go up in 2008? Didn't I know rates were rising? How was I going to be able to keep my home if my ARM adjusted upwards by 3 points or more? Didn't I understand that he did this for a living and he was just trying to help me? I share this story because it wasn't the first time I've had a dude try to muscle me into a bad financial arrangement.
I've also experienced such condescension, most notably when my husband and I were buying a car and the sales rep addressed all of his comments to my husband, as if I were just a passive observer. (Another pet peeve—after we bought the car, all of the mail related to payments and car maintenance comes addressed to Mr. and Mrs. My Husband's Name, when that is not even my name. From the car company's perspective, I don't even exist.)
What do you think—is this sexism or oversensitivity?
-
Dealing With Stock Market Jitters
Tweet Share on Facebook September 16, 2008 Comment (4)Has all of the latest financial news made you nervous? My own 401(k) has plummeted more than 15 percent since January, which doesn't feel good. But the only thing to do—unless you're among the Lehman employees who have suddenly found themselves without jobs—is to ignore all the drama about the markets plunging and bankruptcies being filed. While our portfolios may have gone down, those of us who buy into the market regularly (through 401[k] purchases, for example) are also purchasing stocks on the cheap right now, and the financial advisers I've spoken with say they still expect returns over the long run to be around 8 percent.
Here's how other bloggers are handling the news:
• The Budgeting Babe: "While the front-page stories haven't yet really affected me directly (as in, my day-to-day life hasn't changed), it seems a lot of other people are affected. Several of my young, capable friends are out of jobs. I know a lot of young couples hoping to "trade up" who can't sell their condos. Gas is still crazy expensive (really high today due to Ike), and credit is harder to come by. For those nearing retirement, 401(k)'s are a nightmare right now. Is America in for a major lifestyle change?"
-
Why Do Celebrities Get Into Money Trouble?
Tweet Share on Facebook September 15, 2008 Comment (7)After reading about Annie Leibovitz's $715,000 debt from unpaid taxes, outstanding rental equipment fees, an uncompleted book deal, and renovation payments, I wondered: How in the world do rich people (Leibovitz earns at least $2 million a year through her Vanity Fair contract) go into debt? (For the record, Leibovitz says her debt issues have now been resolved.)
When I posed that question to several financial planners for an upcoming story, one of them made a point that stuck with me. The average consumer makes the same kind of financial missteps, says Tim Maurer, director of financial planning for Financial Consulate, a Baltimore advisory firm, but the only difference is that no one is watching. Whether it's leaving bills unpaid, like Leibovitz, failing to save, like Britney Spears, or facing foreclosure, like Dustin Diamond (aka Saved by the Bell's Screech), celebrities are just as vulnerable to bad money decisions as we are (or maybe even more vulnerable, because they have more money to lose).
Still, it's hard not to feel some amount of frustration with a celebrity's mismanagement of wealth—perhaps only because I'd like to believe that given the opportunity to manage millions, I would do it so much better.
-
The Upside of Recession?
Tweet Share on Facebook September 12, 2008 Comment (4)Trend-spotter Faith Popcorn says all the financial pressure consumers are facing during this down economy is driving many of us to wilder behavior. One in five adult Americans report drinking more, 17 percent say they are smoking more, and 19 percent report increased sexual activity.
Popcorn, chief executive of her eponymous consultancy, says, "In the face of adversity, many people, especially young adults, propose to 'cut loose,' have some fun and worry about the consequences, financial or otherwise, later."
For those following that trend, an economic recovery might be something of a letdown.
-
Black Women's Relationship with Money
Tweet Share on Facebook September 12, 2008 Comment (4)A new study from ING, working with Essence magazine, explores black women's attitudes toward money. The participants said they worried about finances more than their health, appearance, job, or relationships. Here are some highlights:
- 47 percent of black women surveyed said it is difficult to have the lifestyle they want because of financial obligations to immediate family.
- More than one third have loaned more than $1,000 to friends or family in the last year.
- 71 percent said it was "very important" to donate money to their place of worship.
- 41 percent feel guilty about how much they spend on expensive brands.
- 2 in 5 reported total savings of less than $10,000.
-
Podcast: Spending to Save
Tweet Share on Facebook September 11, 2008 Comment (1)In this week's Alpha Consumer Podcast, I talk to Melissa Tosetti, founder of the online magazine Budget Savvy, about setting financial priorities. She recommends scaling back on what's not important to you so you can spend money on what is. For her, that means less money on cars and more on travel. Some of her favorite websites are:
You can also pick up the Alpha Consumer Tip of the Week on making money through blogging.
-
Small Notebook Supports Simplicity Movement
Tweet Share on Facebook September 10, 2008 Comment (7)On her blog SmallNotebook.org, Rachel offers advice and, as she puts it, "encouragement" for living a simpler life. Her site is both personal, with stories from her own family life, and practical, with daily tips. I asked Rachel to answer a few questions about how and why she got started.
How and when did you decide to start SmallNotebook.org, and what is your background?
Small Notebook began as my personal blog about six months ago. I wanted a place to keep photos and notes to remember the day, like how I draw and write in my paper notebooks. I didn't expect anyone to be interested, and I'm pretty sure my mom was the only subscribed reader for the first several weeks. -
Video: Obama, McCain, and Your Taxes
Tweet Share on Facebook September 10, 2008 Comment (2)Are you wondering how Barack Obama's and John McCain's tax plans will affect you? Katie Couric's CBS Evening News team explains, with three helpful real-world examples:
