This is the largest increase in consumer credit I've seen in a long while.
What would be happening in June, of all months, that would cause such an increase in our consumer debt?
Why do Americans keep taking out more debt? In June, consumer credit increased at an annual rate
of 7-3/4 percent, with revolving credit increasing at a rate of 8 percent and nonrevolving credit increasing at a rate of 7-1/2 percent. Read more at www.federalreserve.gov |
This was interesting, unknown advice for me. I did not know many companies try to influence their young execs to take on a large lifestyle in order to overly leverage their finances so they stay working for the company. I guess it puts new understanding to the term, "Company Man"; a person too in debt to risk leaving the company.
4. Watch your “lifestyle leverage,” especially early in your career.
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Those partnership-track careers? The dirty little secret: Those firms love to get their young employees leveraged up. They will even help you get that way, co-signing mortgages for big houses or even directly lending you the cash on favorable terms. |
They encourage up-and-comers to spend extravagantly; they extend lines of credit to their rising stars. You need a big house with a jumbo mortgage; you cannot pull up to a business meeting in anything less than the best luxury car. It is part of their corporate culture. |
Not really. The big banks, investment shops, law firms and accountants have learned how profitable it is to have “golden handcuffs” on their best employees. These highly-leveraged, debt-laden wage slaves will work harder, put in longer hours and stay with the firm longer than those debt-free workers. |
Besides, overleveraged employees do not leave to work at a new start-up or a smaller, more family friendly competitor. |
In this article, Greece's economic problems were compared to a Ponzi scheme.
Could this analogy be used for personal finances?
More household debt is required in the system in order to pay old debts and keep the economy growing. It cannot be solved by piling debt on debt. There is an analogy to a Ponzi scheme, under which more money is continually paid in to keep the pyramid-like edifice from collapsing. The debt/GDP ratio increases over time because new loans are given to pay old debt and to finance the remaining fiscal gaps. Read more at finance.yahoo.com |
The panel of forecasters are predicting more growth by year's end. Their forecasts are based on their predictors that show citizens are becoming less thrifty and will slow down their savings.
But isn't that what got us into this mess, citizens not being efficient with their money and citizens spending more, instead of saving more?
So, why would we encourage that kind of behavior again? Do we expect a different result?
http://kp.beatingdebt.org/ The panel of forecasters boosted its expectations for growth in 2010 to 3.2 percent real gross domestic product, up from 3.1 percent in its February outlook. It also pegged the 2011 growth rate at 3.2 percent. |
Household spending, while still lagging the overall economy, is still expected to grow significantly this year. The forecasters attribute part of that to consumers being less thrifty, with the saving rate for 2010 seen dropping to 3.4 percent from the 4.6 percent they predicted just three months ago. Read more at www.msnbc.msn.com |
The below advice was published on MSN Money from a fellow PF blogger, Frugal Dad. I think it is great that the corporate names are recognizing the ability of PF bloggers to contribute with "free" advice. I would encourage you to check out the PF bloggers. Instead of paying some financial guru a bunch money for advice, check out the PF bloggers.
Live humbly, Stay away from debt, and Give generously,
http://www.beatingdebt.org | Take out three times as much in student loans as your first year's salary. |
| Borrow thousands to start a new business. |
| Spend $2,000 on your new corporate wardrobe before getting your first check. |
| Give up credit virginity for a free T-shirt. |
| Pay off a credit card with a credit card, without retiring one of them. |
| Buy a car because you can "afford the payments." |
| Spend six months' salary on an engagement ring |
| Blow thousands you don't have on a wedding |
| Sign a long-term lease based on the salary you think you will earn out of college. |
| Don't put any money down on that new mortgage |
| Stretch to get into a new home because it is a good investment. |
| Don't get out of debt before having a baby. |
| Wait until kids are 16 to start saving for college |
| Give your 6-year-old a cell phone |
| Open an online brokerage account to trade single stocks before funding a 401k because you want to get rich quick |
| Get your investing advice from late-night infomercials |
| Shop for clothes with labels that impress your "friends." |
| Eat out every single meal |
Obviously, there are costs involved in providing education. But many could start reading free PF blogs and start learning and applying some fundamental truths to running a great financial marathon. We do not need to lean on debt settlement companies for relief.
http://blog.beatingdebt.org/2009/03/19/debt-relief-and-credit-counseling/
There is so much we could do and learn without having to pay for it. However, if someone is able to help you, I think some form compensation is appropriate. That is why I believe the nonprofit model of providing debt advice works best than a for-profit business model. But it only works if people that are able to get back on their feet help those that are down on their luck.
Live humbly, stay away from debt, and give generously.
http://www.beatingdebt.org/BDORunRoute.php
| "In the UK, one person in 10 is struggling to manage his or her debts and the total of all consumer debt is enormous, some £1,500bn." |
The committee errs in suggesting there is a need to expand the role of for-profit companies in providing advice and support. Paying for debt advice is costly and unnecessary when free advice is available. |
| As you state, the committee points out that "face-to-face advice costs an average of £265 for each person", and "recommends directing consumers to cheaper telephone and internet advice services". Its report says telephone advice costs just £51 per consumer and internet advice is cheaper still. Unfortunately, however, the Treasury does not permit the funds it provides for face-to-face advice to be used for telephone or internet counselling, even though they are cheaper and preferred by many users.Read more at www.guardian.co.uk |
When talking about providing for our kids, it is always a tough conversation. There are many that believe that no expense is too great to afford the best for kids. However, there should be some rational conversations with parents and kids that if they don't have the money, then they need to seek alternative measures to accomplish their goals besides using massive amounts debt. Or parents and children need to be willing to live with less.
God will provide all of our needs. But if provision is not coming and does not come, that is a clear sign that He never intended for you to go in that direction.
http://kp.beatingdebt.org/ D.J.'s daughter has been accepted to two colleges: an in-state public university that the family can pay for out of savings and an out-of-state private university that would require borrowing $150,000. |
"Our daughter worked very hard to get accepted to her dream school, and we would very much like to reward her by paying for her to attend the private school," D.J. wrote me. "Does it make financial sense to take on this debt?" |
Great questions and ones Christians need to ask themselves personally and corporately. Matt 25:35 -"I was hungry and you gave me food...What you did to the least of these my brethren, you did unto me". I am praying that Christians in wealthy America learn the alternative values talked about by Jesus. I pray that Christians come to the realization that if they live humbly, stay away from debt, and give generously the issue of hunger for this world 'can be conquered'.
http://kp.beatingdebt.org/ | Two completely different conversations about food are taking place around the world. One is among the well-fed, who ask themselves, "What should I eat?" The other is among the underfed, who wonder, "How can I keep from starving?" |
Why are there still starving people? Isn't there enough food for everyone? |
One thing we saw in 2008, when the price of food skyrocketed, was greater demand from India, China, and other emerging econ-omies. As people become more prosperous, they are eating more meat. So their hogs and cattle need more feed. Read more at www.christianitytoday.com |
I put this book on my books to read list. The excerpt provided by this magazine peeked my interest. The simple paragraphs provided are so revolutionary to the current American Christian mindset. | Christians are not called to be "successful"; we are called to be faithful. |
An excerpt from the late-2nd-century Letter to Diognetus sums up the early Christian understanding of success and faithfulness: "Christians do not find happiness by ruling over their neighbors, or by seeking supremacy over the weak, or by being rich, or by attacking the inferior. On the contrary, Christians see success in taking upon themselves the burdens of their neighbor, using their positions of superiority to benefit the deficient, and in distributing whatever they receive from God to the needy. This is what it means to be an imitator of God." Read more at www.christianitytoday.com |
And this is a problem, why? Wasn't most of our problems related to easy credit? Maybe this will force everyone to start using cash and live within their true means and not the inflated credit means.
http://www.kp.beatingdebt.org | consumers are about to face a new financial burden: a sustained period of rising interest rates. |
| The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing. |
| Americans have assumed the roller coaster goes one way |
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