America Saves Blog
Tips, advice, and the latest news from the savings world.
July 12, 2012
By Dylan Tansy, America Saves Intern
Roughly one in six Savers that have signed up with America Saves has selected “paying off consumer debts” as their wealth-building goal. That does not come as a surprise as a 2012 survey showed that roughly 45% of families with annual incomes under $50,000 are relying on their credit cards to pay for basic needs such as rent, utilities, insurance and food. This consumer debt is a huge financial hurdle for low income families, especially when factors in the considerably greater cost incurred from compounding interest.
- Do you use your credit card for basic needs like rent, insurance, and food? – This, more than likely, is leading you to hold a revolving monthly balance. Ideally, you want to never be using more than 25% of your available credit limit in order to optimize your credit report and score.
- Can you only afford to make minimum payments on your credit cards? – Even if you are below a 25% utilization ratio, only making the minimum payments will lead you to higher and higher debts. You should be able to pay all, if not most, of the charges on your credit card each month.
July 11, 2012
By Andia Dinesen, AFC ® Military Saves Coordinato
I started babysitting around the time I was 12 years old for the same reasons that most adolescents get jobs: to earn some money independently of the allowance my parents gave me and to become more adult. It wasn’t much money, mind you, about $2 per hour for a few times a week, but it was more money that I was used to seeing at that age. Thankfully I had someone looking out for me: my mom. Every night when I came home from babysitting, my mom made me put the money I had earned into envelopes.
Envelopes in the Cupboard. One envelope was for the money I could spend, one was for the money I had to save, and a third for money I would donate. I vividly remember coming home each night and going straight to the cupboard to fill my envelopes with my “hard-earned” cash. I always had to save (significantly) more that I was allowed to spend. At the time, I didn’t see the wisdom in that; it was *my* money wasn’t it? In retrospect I am so happy that my mom forced me into dividing my income and starting to save so young because saving a fair-sized portion of what I make is now a natural tendency. In recent years, I have been thinking more and more about the envelopes in the cupboard and that I was lucky to learn about saving so young. It is starting to look as though my mom was definitely onto something (although, it doesn’t exactly come as a surprise to me.) Not only are adults trying to save more during the difficult economic period we are currently facing, but now the adolescents and teenagers have started becoming increasingly more “savings savvy.” Three teens recently scored exceptionally well on the National Financial Capability study stating that personal savings should be a priority for their peers.
July 10, 2012
By Michelle Volpe-Kohler, Associate Director, FINRA Corporate Communications.
It’s easy to fall into debt—especially if you are supporting a growing family. But just because you’re in debt now doesn’t mean you have to stay in debt. You are taking the first step to dig yourself out of debt by reading this Action Plan. Whether you’re in serious trouble or just want to pay down some bills, take the steps in this Action Plan to get going.
- Complete a personal financial inventory. Knowing how you got into debt will help you find the right solutions to get out. Find out what you own, what you owe and how much you’re spending. This will help you figure out how you can trim your spending in some areas to find the money you need to repay your debts. Review the action plans on calculating your net worth, tracking your spending and building a spending plan to get your financial inventory started.
- Put away the plastic. If you find yourself over your head in debt, stop using your credit cards immediately. See the Control Your Credit Action Plan for tips that can help you live without using credit cards all the time.
- Call your creditors before skipping payments. If you think you can’t make a payment, call the business you owe money to and ask for more time. If you make the call before you miss a payment, the business often will be more willing to work with you.
July 9, 2012
Over the next five weeks, the America Saves blog will feature articles and guest blogs on the topic of paying off high-interest debt. America Saves, along with our 52 local campaigns will be featuring information on how to reduce your debts and where to get help.
Borrowing more money than you can afford is costly in many ways. Americans spend well over $75 billion a year just on credit card interest and fees. That means that families who revolve credit card balances pay an average of $1,500 a year in interest and fees.
Too much debt isn’t just expensive. People with lots of debt often say they lack peace of mind. They worry constantly about paying off debts and making ends meet. The stress of these worries affects their family life, work performance, and other areas of their lives.
If you would like to join the conversation about paying off high-interest debt, download our latest resource packet. The resource packet contains:
- A sample article
- Social media content
- Tools and resources
By Dylan Tansy, America Saves Intern
Growing up, everyone knew which parent you had to ask for certain things like new clothes or to spend the night at a friend’s house. For me, almost everything was up to my mom unless I wanted something expensive or a “boy thing” like a sling-shot, in which case I would ask my dad. These gender differences obviously vary from family to family, but some level of difference is almost universal. A recent FoxBusiness article discussed an Ameriprise Financial survey that explored these differences of how middle aged men and women approach financial conversations and giving financial help to other family members.
What seemed to be the largest takeaway point is that middle aged, or baby boomer men tend to be more optimistic about their financial futures and retirement than women. Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, attributed this to the fact that the surveyed men were more likely to have set aside money for retirement, and figured out the amount of money they would need for retirement. Men seem to generally have more of a plan when it comes to retirement.
Another contributing factor that Baca pointed out was that men were less likely to have taken time off from the workforce to stay at home with children, or provide care for aging parents. This increased average time in the workforce for men allowed them to save more money in many cases.
The survey also found that while women are more willing to discuss financial issues, men are more likely, or quicker, to give financial aid to family members. De Baca says that over the course of raising a family, women tend to have more day-to-day discussions about finances which pave the way for more important conversations later on in life. Furthermore, women may be aware that they are statistically likely to outlive their partners resulting in an air of increased financial responsibility.