The children in this video have a delightful take on our cultural attitudes and mores about money – what it is, what it can do, and whether to share it.
The interviewer borrowed the format Art Linkletter used when asking kids questions on his Emmy Award-winning television show, “Art Linkletter’s House Party,” which aired between 1952 and 1969 – as boomers and their parents will remember.
The new video about kids and money is posted on the American Financial Services Association Education Foundation’s website. The foundation’s mission is to educate people about responsible money management, starting with young children and teenagers.
The adorable factor makes this 6-minute video fly by.Learn More
Yup, more than half of college students are using some of their student loan money to pay for spring break.
It’s the peak season, and 21st century ingenuity is being applied to the age-old problem of paying for college trips to popular, sunny climates like Miami and Cabos San Lucas in Mexico’s Baja Peninsula. LendEdu decided to do a survey to answer a question that Mike Brown put so succinctly in his blog:
How can “so many students living on a shoestring budget afford to go on a not-so-cheap weeklong getaway”?
The mechanism allowing this can be found in college financial aid offices, which funnel loan money directly to students after, wisely, deducting tuition and fees.
Fifty-one percent of the students who were surveyed are financing their beer, hotels, and air fares with another popular source: parents. Spring break is typically paid for with whatever they can scrape together from parents, loans, and part-time jobs – frequently in that order.
LendEdu, a New Jersey credit card and student loan refinancing firm, hired Pollfish for its March survey of 1,000 college juniors nationwide who have student loans and are planning spring break 2018.
Brown is 24 and earned his University of Delaware degree in 2016. His parents paid for his Cancún trip during junior year, and he did not have to use his loans, which he’s still paying off.
“If my parents found out I was using that loan check to pay for spring break, they would’ve had a couple words with me,” he said.Learn More
Enrollment in the federal food stamp program, known as SNAP – for Supplemental Nutrition Assistance Program – has more than doubled over the past decade to 47 million.
What’s remarkable is that for the first time the number of Americans receiving food stamps increased even in a period when the economy was growing. During the 2003-2007 expansion, the SNAP case load, in a break with historic trends, rose 24 percent.
One explanation is the change in the longstanding correlation between the unemployment rate and poverty, according to research findings by economists Matt Rutledge and April Yanyuan Wu of the Center for Retirement Research, which were presented at the Retirement Research Consortium meeting in August.
Poverty used to fall in tandem with the jobless rate, reducing the need for food stamps. But the researchers found that the mid-2000s expansion was different: poverty did not decline as the economy grew.
In the recovery that has followed the Great Recession, the number of people receiving food stamps continued to rise, according to federal data.
The assumption has always been that a stronger labor market will reduce the need for food stamps. But this new trend suggests rising employment might no longer be enough. Reducing the food stamp rolls may require a broader recovery or initiatives to reduce poverty and provide more jobs for the marginally employed.
Full disclosure: The research cited in this post was funded by a grant from the U.S. Social Security Administration (SSA) through the Retirement Research Consortium, which also funds this blog. The opinions and conclusions expressed do not represent the opinions or policy of SSA or any agency of the federal government.Learn More
The best place to invest, the coolest cash back rewards, the smartest or cheapest or lowest-rate mortgage – infinite spin ushers out of the financial world every day, and it’s all aimed at you.
That’s among the reasons the Center for Retirement Research at Boston College started this blog in May 2011. The blog’s focus is not financial products but financial behavior: what people do, why we do it, and how we can do it better. At its two-year anniversary, the Squared Away Blog hopes that it has become a reliable source of information for a growing number of readers of all ages who struggle every day to save and invest for their own or their children’s futures.
It’s important to explain to readers what “reliable” means for a blog housed at a university think tank. First, it’s about credibility. We are not selling anything. The blog is supported by a grant from the U.S. Social Security Administration, which has an interest in making sure Americans get good financial information.
Second, Squared Away routinely covers the latest research – our own or others – about financial behavior, or we use it to inform other articles you’ll read here. That’s because empirical research, which uses statistical analysis to figure out what’s really going on, is critical to understanding and tackling our personal finance challenges. …Learn More
Over the past 25 years, the difference in wealth held by white and black households in the United States has nearly tripled, to $236,500.
In December, Squared Away wrote about the difficulty that black families have in trying to accumulate wealth so they can pass it on to their children. New research out of Brandeis University’s Institute on Assets and Social Policy now finds that the gap between the median net worth for white and black households has widened to a chasm, as blacks have fallen farther behind.
The study also quantified the reasons for the widening gap and found that the difficulty of building up housing equity is the largest factor.
A house is usually the single largest asset owned by middle-class American families. But starkly different homeownership patterns between blacks and whites – ownership rates are lower for blacks, who also own their homes for fewer years than whites – accounted for 27 percent of the increase in the wealth gap.
Housing’s impact has been “incredibly large” and is the “key driver” of the growing black-white wealth gap, said Thomas Shapiro, the institute’s director. “It’s part of the disadvantage that keeps working its way through the life course” from one generation of a black family to the next, he said. …Learn More
Lower pay for women came up – where else! – in the foreign policy debate between President Obama and Governor Romney. It affects women’s living standards, single mothers’ ability to care for their children, and everyone’s retirement – husbands and wives.
To understand why women earn 77 cents for every dollar earned by men, Squared Away interviewed Francine Blau of Cornell University, one of the nation’s top authorities on the matter. A new collection of her academic work, “Gender, Inequality, and Wages,” was published in September.
Q: How has the pay gap changed over the years?
Blau: For a very long time, the gender-pay ratio, which is women’s pay divided by men’s pay, was around 60 percent – in the 1950s, 1960s and 1970s. Around the 1980s, female wages started to rise relative to male wages. In 1990, the ratio was 72 percent – that was quite a change, from 60 to 72 in 10 years. We continued to progress but it is less dramatic. In 2000, it was 73 percent. Now it’s 77 percent – that’s the figure that came up in the debate.
Q: Why do women earn less?
Blau: There are two broad sets of factors: the first is human capital and the factors that contribute to productivity and the second is discrimination in the labor market. Women have traditionally been less well qualified than men. The biggest reason here is the experience gap between men and women. Traditionally, women moved in and out of the labor force, and that lowered their wages relative to men.
But when we do elaborate studies – my recent study with Lawrence Kahn in 2006, for example – we find that when we take all those productivity factors into account we can’t fully explain the pay gap. The unexplained portion is fairly substantial and is possibly due to discrimination, though it could be various types of unmeasured factors. So in the 1998 data used in our 2006 article, women were making 20 percent less than men per hour. When we take human capital into account, that figure falls to 19 percent. When we add controls for occupation and industry – men and women tend to be in different occupations and industries – we can get a pay gap of 9 percent. This unexplained gap of 9 percent is potentially due to discrimination in the workplace. …Learn More
Last week, Squared Away published the first five of 10 strategies to help parents and their college-bound kids limit their borrowing through student loans. As promised, readers can find the remaining five ideas below.
On a complexity scale, finding a college is comparable to buying a house, and some of these debt-cutting strategies are extremely difficult to put into practice. In addition to the financial challenges involved, the emotional aspects of parent-child dynamics and the college application process are daunting.
But the soaring cost of an undergraduate education has made student debt prevention a top priority for most families. Here’s more help from college financial advisers.
Deborah Fox of Fox College Funding LLC in San Diego said the days of majoring in English, philosophy or history are over – or should be. Given the financial pressures of college, she said, students can’t afford to “just study what’s interesting to you.” When weighing future earnings for graduates with such majors, the numbers just don’t add up, especially if the English degree is from a high-cost institution like Columbia University (high cost among private colleges) or the University of Illinois at Urbana-Champaign (expensive for in-state students).
Fox asks her clients to identify skills the college-bound teenager is good at. When entering college, they should already have a handful of potential occupations in mind. Then they can focus on relevant internships, jobs, courses and life skills that will help them get a job when they graduate – and begin paying back their loans. Freshmen should immediately begin testing their theories about the work they’ll want to do – “possibilities they could get excited about,” she said. She tells clients’ kids to “start exploring them immediately, shadow [people in their field], take someone out for coffee. Find out what is the day-to-day work like.” …Learn More