Posts Tagged "personal finance"

Video: Boomers in RVs Seek Job, Security

Sales and rentals of recreational vehicles have skyrocketed during the pandemic as people working remotely use their newfound freedom to move their workplaces to the great outdoors.

Outdoorsy – the Airbnb of recreational vehicles (RVs) – reports that 40 percent of its new rental customers are under age 40. But long before younger adults hit the road, thousands of baby boomers were buying RVs to roam the country in search of work.

Rather than seeking psychological relief from COVID, as younger workers are doing, the boomers – some retired and some unemployed – are looking for financial security.

In this excellent PBS NewsHour segment, Paul Solman talked to boomers who park their RVs at campsites near whatever seasonal jobs they can find at places like Amazon and JCPenney warehouses, sugar beet farms, and theme parks and national parks.

During the summer tourist season, Judy Arnold has been working at Yellowstone National Park in Wyoming. But with so many businesses shut down by the pandemic, she worries about where her next job will come from. “I definitely need an income,” she told the NewHour.

George Stoutenburgh gave two reasons for his wanderlust. …Learn More

Students in class

How High School Finance Courses Fail

States with personal finance course requirementIn more than 30 states, completing a personal finance course is required for a high school degree.

The requirement started gaining traction around the country in 2005, despite the long-running debate about whether the courses even work.

A new study gets at whether high school instruction is effective by asking a fresh question: do the finance classes make people feel better about their situation – and feeling better about one’s finances is an indication things are, in fact, improving.

This departs from past studies focused on objective measures like credit scores and past-due loans.

The researchers find that high school courses have generally been a positive development: adults who grew up in states that require the courses do, in fact, feel better about their finances compared to people from states lacking a requirement.

But what’s interesting in this study is that a group of disadvantaged Americans feel worse off for having taken the courses: high school graduates who didn’t go on to college. Rather than helping them manage their financial challenges, the classes are only making things worse.

Before examining the reason for this, consider how the researchers measured the feeling of well-being. They used recent data from a series of questions asked by the FINRA Investor Education Foundation: Do you feel you have control over your money? Could you afford an unexpected expense? Do you have a sense of achieving your financial goals?

Most important, FINRA asked, do you have the financial “freedom to make choices that allow a person to enjoy life”? FINRA’s survey was conducted in 2018, but this question is relevant in the COVID-19 recession. Enjoying life is essentially the flip side of having financial stress, which is currently very high among low-income workers without college degrees.

The researchers argue that adults with no more than a high school diploma who’d taken the personal finance classes feel worse, because the classes delivered a “harsh dose of reality” that can “make economically vulnerable people more aware of their precarious financial situation.” …Learn More

The Profound Financial Pain of COVID-19

It was hard to miss the news last year that four out of 10 people couldn’t come up with $400 if they had an emergency. The coronavirus is that emergency – on steroids.

A wave of new surveys asking Americans about their personal finances reveal the depth of a crisis that has suddenly befallen untold numbers of people. And the worst, economists say, is probably still ahead of us.
Financial Stress chart
As of last week, 36.5 million people had filed for unemployment benefits, and that doesn’t include some workers who were furloughed or have not yet been able to file their applications for benefits. The Federal Reserve said nearly 40 percent of people living in households earning less than $40,000 have lost their jobs.

As the virus tore through the country in April, most adults cited a lack of savings as the reason for their financial stress in a survey by the National Endowment for Financial Education.

What many people have, instead, is debt. In recent years, consumers loaded up on credit card and other debt – for bigger houses, new cars, vacations. This is what people do when the job market is strong and confidence is riding high. …Learn More

A sculpture looking shameful

Money Shame Surfaces in Tough Times

It’s easy to overlook the emotions that swirl around money. But they often come to the surface when our financial security is thrown into question.

The spread of the coronavirus has kicked Americans’ financial anxieties into high gear, a Kaiser Family Foundation poll found last week. More than half of the workers who were surveyed fear they will lose income when their workplace is closed or their hours are reduced.

Reduced income is hitting low-wage, part-time and hourly workers hardest and fastest. But even among people with more financial resources, more than half are concerned they’ll have to dip into retirement savings or college funds.

Even when financial problems stem from events that are outside of an individual’s control, a feeling of shame can take over. Shame is the thread running through three TED videos that explore the emotions around money.

With economists increasingly predicting a recession in the wake of the virus, it might be useful to keep in mind the insights and coping mechanisms discussed by the speakers in these videos.

Shame is that “intensely painful feeling or experience of believing that we are flawed … based on our bank account balances, our debts, our homes, or our job titles,” Tammy Lally explains in the first video.

Lally, a financial coach, believes her brother was driven to suicide by his shame about his bankruptcy filing earlier that same day. She said she was judgmental at first but, after encountering financial problems of her own, came to a better understanding of the intense pressures her brother was feeling.

Lally’s and her brother’s shame around money was rooted in their childhood, she said: the siblings learned from their parents that money would make them happy. “We internalized that into the money belief that our self-worth was equal to our net worth.”

As the coronavirus pummels the stock market and slows the economy, many workers are feeling under enormous financial pressures. But Thasunda Duckett, who runs the consumer division of a major bank, said in a second video that people only compound the pressures when they blame themselves.

“We have a fraught relationship with money, because it comes with judgment,” she said.

Duckett and Lally both recommend one thing people can do if they’re experiencing money issues. To overcome some of the shame and anxiety requires letting the burden go by talking openly with others about money – you will quickly learn that you are not alone.

“Money can no longer be a taboo topic,” Lally said.

In 2007, a year before the financial crisis hit, Elizabeth White, a Harvard Business School graduate and one-time international consultant, was tumbling into “economic freefall.” …Learn More

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Happy Holidays!

Next Tuesday – New Year’s Eve – we’ll return with a list of some of our readers’ favorite blogs of 2019. Our regular featured articles will resume Thursday, Jan. 2.

Thank you for reading and posting comments on our retirement and personal finance blog. We hope you’ll continue to be involved in the new year. …
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Photo of turkey

Happy Thanksgiving to All!

Whether you’re having Thanksgiving with family or your celebration will take the form of a Friendsgiving, the staff at Squared Away and the blog’s sponsor, the Center for Retirement Research at Boston College, wish you a wonderful holiday. …Learn More

Aerial photo of a row of houses

Many Demands on Middle Class Paychecks

Ask middle-class Americans how they’re doing, and you’ll often get the same answer: there are still too many demands on my paycheck.

Several recent surveys reach this conclusion, even though wages have been rising consistently at a time of low inflation.

Student loans trump 401(k)s. Two top financial priorities are in conflict: student loan payments, which people described as a “burden,” and saving for retirement, which they viewed as “important” in a TIAA-MIT AgeLab survey.

The debt seems to be winning: three out of four adults paying off student loans say they would like to increase how much they save for retirement but can’t do it until their loans are paid off – and that can take years. One woman described her loans as “draining” her finances.

A promising sign on the horizon is that some employers are finding creative ways to help employees pay down college debt, giving them more leeway to save money in their 401(k)s. But these efforts impact a small number of workers, and the amount of debt continues to rise year after year for every age group, from new graduates to baby boomers who helped send their children and grandchildren to college, a Prudential study found.  

Buying a house isn’t an option. The good news is that about half of Millennials already own a home. Most of the others want to buy a house but can’t afford it, 20- and 30-somethings told LendEdu in a survey. Their top reasons were student loan and credit card payments and a lack of savings, which is the flip side of having too much debt.

Millennials are also putting off other goals until they get a house – marriage, children, even pets. “It’s quite obvious that this uphill battle” and debt “is having secondary effects,” said LendEdu’s Michael Brown.

Medical debt looms large. Americans borrowed $88 billion last year to pay their hospital, doctor, and lab bills. That debt fell hardest on the 3 million people who owe more than $10,000, according to an estimate by the Gallup polling company and a group of healthcare non-profits. …Learn More