Showing posts with label Money Mondays. Show all posts

[Money Mondays]: Savings and Emergency Funds

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What percentage of Americans have less than $400 in an emergency fund?


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Answer:  47%
Almost half of Americans say they would have to borrow money or sell something to cover an emergency cost of $400 or more.
  • Are you surprised?
  • What are some reasons why 47% of Americans cannot afford this cost?
  • Can you think of 3 emergency costs that are $400 or more?
From the Wall Street Journal:  “But for many Americans, household finances remain fragile: 47% said they wouldn’t be able to cover a $400 emergency expense or would have to borrow money or sell something, and 31% said they went without some form of medical care in the last year because they couldn’t afford it.”
That may go a long way towards explaining why banks collect so much in overdraft fees as credit card companies earned over $158 billion in 2015 and payday lending is such a growth industry.
Resources:
Wall Street Journal - Economics Blog “Household Finances - Fed Survey”
Wall Street Journal - Credit Card Issuers are Charging Higher
The Guardian - US Payday Loans Crisis


Anonymous

[Money Mondays]: How do people decide what credit card to get?

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How do people decide what credit card to get?




Credit Card Selection Reasons by Income according to Credio
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Answer: Benefits and Rewards wins at every income level with Low Interest Rates #2 and Build Credit #3.
Your income level may say something about why you applied for a specific credit card.
Data from Credio, an online credit card information website, show that Americans choose credit cards primarily because of the rewards they offer.
But when it comes to secondary reasons, Americans differ based on income level.
For example, those with higher incomes are more likely to select credit cards because of their benefits and rewards, whereas those with lower incomes are more likely to choose cards that will help build credit.
Meanwhile, middle-income earners are more likely to choose credit cards with low interest rates.
Two questions to consider:
  1. Why do you think Benefits and Rewards are the main criteria people use when selecting a credit card?
  2. As income level increases, fewer people select credit cards so that they can build credit. Why do you think that is?



Resources:
Credio
Discover:  Credit Card Resources
Money Under 30

Anonymous

[Money Mondays]: How do people pay for things (by age)?


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How do people pay for things (by age)?



2015 Diary of Consumer Payment Choice *figure-15-2015dcpc-payment-instrument-use-by-age-102716.png
* Federal Reserve Bank of San Francisco

Consumers 65 and older made the most cash transactions, averaging 36 percent of their total monthly transactions. Every age group made more cash transactions than credit card transactions, and cash transactions continued to comprise at least 24 percent of each age group’s total reported transactions.

Are you surprised?

  • Looking at these six payment types, what do you think your individual
bar chart would look like?
  • What payment type do you use the most?  How about the least?
  • What are some of the factors you personally think about before deciding
how to pay for something?

Resources:

Federal Reserve Bank of San Francisco

Frekonomics

Minnesota Public Radio

Anonymous

[MoneyMondays]: April is Financial Literacy Month!

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The month of April is recognized in the United States as Financial Literacy Month.  On Mondays throughout  April, we will highlight different financial literacy topics and share some tips with you!
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How much more do college grads make than high school grads?
College graduates, on average, earn more money than people who do not go to college.  But just exactly, how much more do college graduates earn 5 years after graduating?
Answer:  $19,045.13           CollegeEarningPremiums.jpg


Are you surprised?  That means, over the course of working 40 years, someone with a high school diploma will make $1,116,600 while someone with a bachelor’s degree will make $2,048,204. That’s nearly a million dollars more!
The job market is only getting more competitive.  People who don’t have a degree are going to find it increasingly harder to get a job.  College presents you with challenges that you don’t find in high school, and gives you independence and opportunities that you wouldn’t get any other way.

Resources and Additional Articles of Interest:
  • May 2016 NY Times: “It’s A Tough Job Market For The Young Without College Degrees”
  • 2016 Annual Report San Francisco Federal Reserve: “Does College Pay”

Anonymous

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