December 2011

"Wishing you a wonderful holiday"

2011 Recap

I would like to thank everyone for reading Squared Away in its inaugural year. I’ve identified the three of the most popular blog posts that have run this year. They are:

My next blog post will be on Tuesday, January 3, 2012!Learn More

Cheatin’ Art Exhibited at Duke

Money and cheating go hand in hand – now add art to the mix.

An art exhibit was inspired in part by the research that found a “robust relationship between creativity and dishonesty” by Francesca Gino at the Harvard Business School and Dan Ariely of Duke University, a behavioral economist who founded Duke’s Center for Advanced Hindsight, the location of the exhibit.

What does the art say to you – about financial planning, the scammers who slink among us, or our money culture? Squared Away picked pieces by two of the exhibit’s 22 artists, who are from North Carolina, Israel and elsewhere. The artists’ explanations are included with their work: …
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Pieces and the board of The Game of Life, a popular boardgame.

Money Games Are Great Gifts for Kids

The Boston Globe is providing a cool list of holiday toys for your children, to help them learn early and often about handling money – while it can still make a difference. In July, Squared Away wrote about another idea that would make a fine gift – call it “not your average piggy bank.” A May blog post was about a great book to teach children about what bank accounts are all about.Learn More

A stork carrying a baby flies in front of a pink background.

Parents: College Saving Not Optional

New parents: you have been warned. Mainstream media have rolled out one horror story after another about college graduates and their parents burdened with $40,000, $50,000, even $100,000 in student loans.

Not everyone plans to pay for their children’s education. But those who do need to think early about saving, because college has become extremely expensive – tuition costs are rising much faster than inflation.

The good news is that figuring how much to save for college is not nearly as complex as planning for retirement. While retirement strategies fill hundreds of books and fuel vigorous academic debates, new parents can be reasonably certain about one major factor in calculating how much they’ll need: when the child will attend – age 18.

“There are a lot fewer moving parts” to calculating college costs, said New Orleans financial planner H. Jude Boudreaux, who has been thinking about this issue more since his daughter, Lucy, was born about 15 months ago. …Learn More

Jobless Benefits Delay Disability Filings

Photo by John E. Allen, Inc. Source: Franklin D. Roosevelt Presidential Library and Museum.

In New York, prosecutors recently charged 11 people with illegally collecting disability checks – some were caught playing tennis or golf or shoveling snow.

Boston’s mayor called “disappointing” a jury acquittal last summer of a hulky firefighter who was filmed posing during bodybuilding competitions – while on city disability.

Sensational news stories add to the stigma around people who collect disability for legitimate health reasons. New research on the Social Security Disability Insurance program provides insight into what really motivates people to file. There are two opposing ways to interpret these interesting findings, but more about that later.

Matt Rutledge, my colleague at the Center for Retirement Research, specifically researched disability filings by people who are unemployed in a new study for the Retirement Research Consortium. His work is particularly relevant at a time when the duration of joblessness has soared. Applications for disability typically increase in economic downturns, but they reached record highs in response to the Great Recession. …Learn More

A number of presents wrapped in dollar bill style paper.

Calculate Holiday Budget: If You Dare

Take a hard look at your holiday spending. A credit counseling agency in Virginia says it shouldn’t exceed 1.5 percent of your annual income.

How’s your budget doing? Click here to use the holiday planning calculator, courtesy of Clearpoint Credit Counseling Solutions, a non-profit agency in Richmond, Virginia.

The budget tells you how much you can spend and then divvies it up among gifts, parties, travel, food, and donations. There sure is a lot to spend your money on!

Clearpoint Holiday PlannerLearn More

A crowd of people rushing through the doors of a department store for Christmas sales.

United States of Credit

The holidays have arrived, and our credit cards are getting a workout. Sheldon Garon, author of “Beyond Our Means: Why America Spends While the World Saves” (November 2011), maintains that gift shopping isn’t only about giving – it’s our civic duty, we’re told.

Squared Away interviewed the Princeton University historian about world savings rates and America’s “democratization of credit.”

Q: Americans have tightened their belts. How does our current 4 percent savings rate compare with the rest of the world?

Garon: The Chinese save at extraordinary rates, about 26%. But that’s something that happens with Asian economies just as they’re taking off. The Japanese and Korean economies did that too. The really interesting place is continental Europe. . . . The United States should be going down in its savings rates, because we’re an aging society. But the Europeans should be going down even farther, because they have more rapidly aging societies and very low birth rates. But the German, French, Austrian and Belgian savings rates are around 10 percent – Sweden has gone up to 13%.

Q: How did debt become culturally acceptable here?

Garon: Before the 1920s, it was no honor to be indebted. When installment buying became popular in the 1920s, that was seen as an acceptable form of debt. But we reached a new stage in the early 1990s, when society considered you stupid if you didn’t take on more debt. Why would you save up for something if you could borrow so easily?

What do you think of Garon’s take on U.S. financial culture?   Squared Away would like to hear your comments after you read the full interview.Learn More

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