Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Wednesday, June 17, 2009

Mascara, Movies & Other Odd Economic Indicators: From Kiplinger's

Movie theaters, dry cleaners and mascara can tell us a lot about the economy, according to Kiplinger.com , which has put together a funny list of "10 Quirky Economic Indicators." Here's a sample from the list:

· "Dry Cleaning Pickups Are Down The International Drycleaning and Laundry Institute is hearing gripes from many of its 5,000 members. Because of the poor economy, customers are visiting less frequently and leaving clothes longer. Customers who once came weekly now visit every two weeks, monthly customers visit bimonthly, and some people delay their pickups even longer to avoid the bill.

· More First Dates. Misery loves company. In the fourth quarter of 2008, online dating service Match.com was its busiest in seven years. When the Dow Jones industrial average dropped to a five-year low last November, the company had its second-busiest weekend of the year. Match.com believes people are looking for someone with whom they can forget about money troubles—or share the pain.

· More Green Thumbs. The National Gardening Association finds that the number of households that will grow their own fruits, berries, vegetables and herbs this year is 19% higher than in 2008. That makes 43 million gardeners in the United States this year—54% of whom say the prospect of saving money on groceries motivates them to till the soil.

· Goopier Eyelashes. You’ve got that recession look in your eye. Total eye-makeup sales at supermarkets and drugstores were up 8.5% in the one-year period that ended on March 22. In that period, more than $260 million was spent on eye makeup—in particular, eyeliner was up 9% and mascara almost 13%, the industry says. The leading lipstick indicator—the past trend that lipstick sales rose in economic downturns as consumers settled for inexpensive luxuries—is not holding up. Lipstick sales are down 11%.

· Romance Novels Are Hot. Harlequin, the giant romance-novel publisher, says its sales were up 32% in 2008 from the year before. In 2009, sales are still rising. The publisher credits the increase to its uplifting stories that offer a haven, and to the low prices of the books relative to other entertainment. Harlequin saw a similar sales increase during the recession of the early '90s.

· Packed Theaters. When times get tough, people go to the movies. Box-office sales have increased in all of the last five recession years. According to the National Association of Theatre Owners (NATO), the number of movie tickets sold in the first quarter of 2009 increased more than 9% from last year. People continue to fill theater seats, NATO says, because movies are one of the least expensive entertainment options out of the house. "

--source: Kiplinger.com

The full list of “10 Quirky Economic Indicators”

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Sharon is the author of the Frugal Duchess: How to Live Well and Save Money -- a coming of age memoir about money -- and a contributing writer in Wise Bread's 10,0001 Ways to Live Large on a Small Budget.

Sunday, February 22, 2009

I'm Pissed. Partisan Politics: Drilling a Hole in the Boat

Partisan politicians should work for tips in a restaurant. That's because if our government and politics worked like a corporation, a restaurant or even a health spa, somebody -- a lot of short-sighted players -- would be getting pink sheets, without unemployment benefits. And that scenario fires me up.

This is not a political rant. This is about my money, and I'm not getting my money's worth from some congressional leaders. With their eyes on 2012 or hard-line, party-line positions, they're trying to drill holes in the federal boat. The idea: if the stimulus boat sinks, they can run to the rescue four years later and play hero. But that Rush to create failure-and-rescue scenarios ignores two major realities:

1) Time Factor: There's no time for posturing or politicking. The global financial crisis demands solutions and intellectually honest debates. Old-school partisan politics deserve failing grades in the new economy.

2) Same Boat People: There's a famous story about a boater who decides to drill a hole under his seat. The rest of the boaters become upset and the driller does not understand why. In his ill-planned Rush to drill a hole under his seat, he doesn't understand that he's sinking the entire boat. That's the classic version of the story.

In 2009, the storyline goes like this: Resentful drillers decide to create holes under their opponents seats. Their implied logic: Why should the opposing party get credit for successfully riding out the financial storm? Let's drill holes under their seats, pray for failure, so we can rush in and play savior? That selfish logic makes me want to hand out pink sheets.

But if Congress and politics worked like a corporation or a restaurant, here's how the agenda would work:


  • Restaurant Tips: When I was a waitress, I discovered that it was not enough to do my job. If the restaurant was dirty, if the hostess was rude or if the cook burnt the food, my tips (my money!!! my earnings!!!) suffered. A financial payoff -- great earnings for all -- didn't depend on my performance alone. What's more, it took more than just the serving staff to deliver a strong financial performance for the entire organization. It was a group effort. The entire staff had to cooperate for bottom-line financial success. Therefore, our elected officials should work in a restaurant for six months. That's the sentence I would hand out to underscore the importance of bi-partianship. Serve this dish: Get over yourself; get beyond petty party politics and do your damn job!

  • Corporate Agenda: Imagine this scenario: As part of a corporate planning committee, I've suggested a slogan, a blueprint, a to-do list and even a budget. My career would get a major boost if I am crowned the corporate hero. But someone else --my boss or a co-worker -- has a different plan. I don't agree, but it's the plan that passes through the strategic committee and gets rolled out to the general public. Now what would happen to my career, if I trash-talked the plan to customers and co-workers. What if I actively sabotaged a plan launched by my boss? Quite frankly, I would be fired and perhaps lose eligibility to collect unemployment benefits. But in the spirit of partisan politics --the loyal opposition -- can try to sabotage a federal recovery agenda, hope for failure and pretend to be patriots.

  • Department Politics: We all have our silos. If I work on the business desk at a newspaper, I might not care about the sports coverage as long as I am doing my job. But I would be foolish to undercut the Sport Department because I realize that revenue from the Sports Department also helps to pay my salary. When my petty concerns or obsession with office politics prompts me to sabotage colleagues in other departments, I should realize that when I drill holes in their financial plans, I drill holes in my own fiscal well-being.

Basically, if I acted like a selfish player in the office, I would be threatening my job security and my fiscal well-being. But apparently, that's how partisan politics work, where people just drill holes and pretend their creating life-saving situations.

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Here's how to buy my book:




@ Amazon.com
@ Barnes & Noble
@ Borders
@ Target.com

Tuesday, December 23, 2008

Survey: We Fail Holiday Financial Tests

"The Center for Economic and Entrepreneurial Literacy released the results of the holiday economic literacy survey, which shows that Americans lack basic math and personal finance skills—especially as those skills relate to being financially responsible over the holidays. The national survey conducted this month shows that an overwhelming number of Americans are unable to answer basic financial literacy questions.

The survey showed:
· 65% answered incorrectly when asked how many reindeer would remain if Santa had to lay off 25% of his 8 reindeer because of the bad economy;

· 75% of people thought that it would take 15 years or less to pay off $5,000 in Christmas presents if making the minimum payment on their credit card. In reality, it would take 46 years to pay off those holiday expenses!

· 1 in 3 people did not know how much money a person would be spending on gifts if they spent 1% of their 50,000 per year salary;

· 16% of respondents admitted that they do not expect to have their holiday debt paid off by March 1st, 2009.

"Santa would be well advised to leave “Personal Finance for Dummies” in stockings across the country," said James Bowers, managing director at the Center for Economic and Entrepreneurial Literacy. “Many Americans don’t even have the basic math skills required to balance their checkbook, forget about understanding complicated mortgages or credit card statements."

“This holiday season, it is important that all Americans redouble their efforts to ensure that they have the knowledge to make the best financial choices for their families and their budgets.”
Here's the a link to the full survey released earlier this month."

Sunday, October 05, 2008

Please Register to Vote: An Election Reality Check & Weekly Roundup

Are you registered to vote? That question is a popular query in the world of personal finance, where important issues like the economy matter.

Here are a few reality checks about issues that shape our paychecks, plus a roundup of posts from the Frugal Blog Network.

From Paying Off My Future: _VP Debate & Voter Registration

From Get Rich Slowly: Another Frightening Show About the Economy

From Blueprint for Financial Prosperity Please Register to Vote

From CashMoneyLife: The 2008 Financial Crisis - Causes and Effects

From Moolanomy: How To Save Your Home From Foreclosure

From The Digerati Life: 10 Frugal Steps To Help You Survive A Tough Economy

From the Frugal Blog Network:

From Tight Fisted Miser : My Bank Was Bought Out

From Frugal Zeitgeist: The Bad Old Days

From Not Made of Money: home organizing on a budget

From Frugal Babe: The Jogging Stroller as Grocery Getter.

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Here's how to buy my new book:



@ Amazon.com
@ Barnes & Noble
@ Borders
@ Target.com

Tuesday, September 23, 2008

Frugal Book Party in Miami & 5 Errors to Avoid in a Tough Economy

CNBC features an insightful list from Bankrate.com about 5 traps to avoid in a bearish economy. No. 1 on the list: Using credit to make ends.



"Rather than continue a lifestyle financed by credit cards -- and compounding debt in the process -- consumers should "circle the wagons" by figuring out where they spend their money, Cunningham says.

Just as calorie-counters keep logs of every meal and snack, consumers should keep a meticulous watch on incidental purchases such as meals in restaurants, nights out at the movies, and, of course, gourmet cups of coffee. Think of it as an expense report to yourself. "
-- Source: Bankrate.com on CNBC.com


Here's the link to the full article about common financial mistakes.


The list of common errors includes:
  • #2 devouring long-term savings,
  • #3 skipping financial aid for college,
  • #4 ignoring your investment portfolios or becoming emotional paralyzed by the downturn and
  • #5 cashing out the equity in your home.

    I'll also have more financial and frugal tips tomorrow night at a book signing party. If you're in South Florida, please stop by the event!



    Time: Wednesday, September 24, 2008
    When: 7:30 p.m.
    Location: Books & Books, Bal Harbour Shops
    9700 Collins Avenue
    Bal Harbour, Fl
    305.864.4241

    "Award-winning journalist Sharon Harvey Rosenberg shares how she lives a life of high style without the stress of high costs or deprivation. In The Frugal Duchess of South Beach (DPL Press, $14.95), she chronicles her often hilarious journey of luxury living for less in one of the most expensive cities in the U.S., while equipping readers with the tools they can use in their own cities." --Source: Books & Books

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    Here's how to buy my new book:




@ Amazon.com
@ Barnes & Noble
@ Borders
@ Target.com

Friday, July 18, 2008

Everyday Expenses & Housing Costs Ate Stimulus Checks

How did consumers spend federal stimulus payments? Basic expenses ate a big chunk, according to this poll from CCCS:


"Approximately $106.7 billion in stimulus payments will be made this year to 130 million households. The payments began on April 28 and are scheduled to be completed by mid-July. Rather than spend funds on new purchases, the survey also shows that some Americans are using the stimulus checks to make additional payments on their mortgage, car or other loans, and others are using the funds for home repairs.

A survey of 3,004 persons across the United States who receive financial counseling from a national nonprofit agency found that 29.4% used funds from their tax stimulus check to pay for everyday expenses, such as food and gasoline, while 20% said they paid down their credit card debt.

In addition, almost 5% of those surveyed said they utilized the funds to help them prevent foreclosure of their home or avoid bankruptcy. An additional 7.5% said the funds "give some more time to organize their finances and possibly avoid" these two scenarios.

In response to the question, "If you are facing foreclosure, will this check help you avoid foreclosure?" 3.5% responded "yes." An additional 5.1% of those surveyed, said the stimulus payment "gives some more time to organize finances and possibly avoid foreclosure."

Approximately 1.4% surveyed, said the funds would help them avoid bankruptcy, while 2.4% said the funds will allow them more time to organize their finances and possibly avoid bankruptcy.

The survey was conducted in late June by Consumer Credit Counseling Service (CCCS) of Palm Beach County and the Treasure Coast, which is part of a family of nonprofit agencies that provides credit counseling, as well as counseling to prevent foreclosure and avoid bankruptcy, to people in all 50 states. Of the 3,004 responding to the survey, 2,147 had received their check from the federal government.

"Many Americans are using the federal stimulus checks to help them get by and pay for everyday expenses," said Jessica Cecere, president of CCCS. "The extra money is providing them breathing room with their creditors, including those who want to avoid foreclosure and keep their homes."

Here are other findings:

  • 7.8% said they would use the funds to make an additional payment on their mortgage;
  • 9% said they would make an additional payment on another debt, such as a car payment or a student loan;
  • Approximately 5.6% of respondents said the funds will be used to make home repairs;
  • 2.5% said they would use the funds to pre-pay their property or income taxes for 2008.

Other survey findings include:
Approximately 82% of the people surveyed said they plan to save 20% or less of the tax stimulus funds they receive.

Asked to rate the state of their current financial situation on a scale of 1 to 10, with 1 being the "most stressful," about 33.6% of respondents rated their situation a "1."

When asked, "What is your confidence level in the economy six months from now," 66% expect it to worsen and only 11% expect it to improve. The remaining people surveyed expect the economy to remain the same."

source: CCCS

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Friday, May 02, 2008

9 Ways to Teach Kids About Money

A little while ago, I wrote about a little boy who thought money came out of walls (a visual image of ATMs.) The sluggish economy provides an ideal time to teach kids how to be savvy about money, according to Eric Tyson, a financial author.


Here's a guest column on the topic of kids and money, featuring 9 financial lessons from Tyson.


"With inflation on the rise (gas prices, grocery bills, health insurance premiums, etc.) and many companies being more conservative, more American families are feeling squeezed. So if you're feeling guilty because you can't buy your child that video game system he desperately wants or send him to that trendy summer camp, Eric Tyson has one word for you. Don't. In fact, he says, now is the perfect time to teach your kids some valuable financial lessons.

"Kids are surprisingly aware of what's going on in the world," says Tyson, author of the new book Let's Get Real About Money! Profit from the Habits of the Best Personal Finance Managers (FT Press, December 2007). "And if they don't know that times are a little bit tough and Mom & Dad are having to watch their spending, it's time to tell them. Sheltering kids from financial realities does them no favors."

Indeed, the opposite is true, says Tyson. A good grasp of personal finance is one of the most valuable life skills a person can have. And while previous generations may have been raised with the constant admonishment that "money doesn't grow on trees!," too many of today's parents neglect that lesson. It's time to change that—and the economic slowdown we're in now provides a great incentive for doing so.

"In many ways, a slower economy can be a blessing in disguise," admits Tyson. "It leads families to make a budget and stick to it. It forces them to be conscious about how they handle money. That's good for kids. It shows them how the world is supposed to work."


Tyson offers the following hints:


1. Realize that kids learn what they live. It may sound like common sense, but we are our kids' most influential teachers. When you ring up a barge-load of credit card debt, take out exorbitant mortgages or car loans, and fail to save anything, that's what your kids come to see as normal. If you are modeling unhealthy financial habits, you can't realistically expect your kids to "do as I say, not as I do."

"Adults who live it up now and fail to save for the future can expect to raise children who are accomplished spenders and poor savers," notes Tyson. "Be honest with yourself about the powerful money messages you're sending your kids. If your financial habits are poor, overhaul them now. You owe it to your kids."


2. De-program them. Kids are constantly bombarded with information about what things cost, whether it's the fancy sports car they like or the wardrobe of their favorite athlete or actor, not to mention the 40,000 commercials that the American Academy of Pediatrics estimates the average American child sees each year. What they aren't bombarded with is knowledge on how to manage money effectively. And while schools are increasingly incorporating money issues into the existing curriculum, the broader concepts of personal financial management still aren't taught. Frightening though it may be, some schools rely on free "educational" materials from the likes of VISA and MasterCard!

"These credit card titans provide materials that implicitly and explicitly support carrying consumer debt as a sound way to finance significant purchases and living expenses," says Tyson. "In fact, VISA and MasterCard school-supplied resources endorse spending upward of 15 to 20 percent of one's monthly take-home income to pay credit card and other consumer debts! Explain to your kids that such spending puts a lot of money directly into the credit card companies' pockets, so of course they're going to offer that advice...but that smart people don't listen to it."


3. An allowance is a great teaching tool. You don't have to break child labor laws to find great ways to help your kids earn their allowance rather than just have it handed over to them. A well-implemented allowance program can mimic many money matters that adults face every day throughout their lives. From recognizing the need to earn the green stuff to learning how to responsibly and intelligently spend, save, and invest their allowance, children can gain a solid financial footing from a young age.

"A great time to start is when your kids reach the five-to-seven age range," says Tyson. "Start them on some household chores, and explain to them that they will be paid for their work. Of course, the size of the allowance should depend, in part, on what sorts of expenditures and savings you expect your child to engage in and, perhaps, the amount of 'work' you expect your child to perform around the house. I recommend paying $0.50 to $1.00 per year of age. So, for example, a six-year-old child would earn between $3 and $6 per week."


4. Start them saving and investing early. It's never too early to start saving, and the sooner you can instill the importance of saving money into your kids the better. After they start earning an allowance, have your kids save a significant portion (up to half) of their allowance money toward longer-term goals, such as college (just be careful about putting money in children's names as doing so can harm college financial aid awards). Tyson recommends that children reserve about one-third of their weekly take for savings. As they accumulate more significant savings over time, you can introduce the concept of investing.

"Rather than trekking down to the boring old local bank and putting the money into a sleepy, low-interest bank account, I prefer having kids invest in mutual funds," says Tyson. "Another option is for kids to buy individual stocks. Kids can learn more about how the financial markets work and understand stocks better by sometimes picking individual stocks rather than using funds. Just be careful to keep transaction fees to a minimum and teach your kids how to evaluate a stock and its valuation and not simply buy companies that they've heard of or that make products they like. The money they are able to save and invest will be a huge help to them later on in life."


5. Reduce their exposure to ads. The primary path to reduced exposure to ads is to cut down on TV time. When kids are in front of the tube, have them watch prerecorded material. You can direct the television viewing of younger children, in particular, toward videos and DVDs. And for older kids, if you use digital video recorders (DVRs), such as TIVO, you can easily zap ads. But when an ad does sneak under the radar and set the kids to begging, address it. Explain to your kids that there's never a good time for frivolous impulse spending—but it's especially harmful when money is tight.


"Invest the necessary time to teach and explain to your kids that the point of advertising is to motivate consumers to buy the product by making it sound more wonderful or necessary than it really is," says Tyson. "Also explain that advertising is costly and that the most heavily promoted and popular products include the cost of all that advertising, so they're paying for it when they buy those items."


6. Find entertaining ways to teach good money habits. You'll probably be facing an uphill battle when trying to get your kids to sit down and learn about personal finance. That's why it's so important to find entertaining ways to instill good financial habits in them. For younger kids Tyson recommends age-appropriate books like The Berenstain Bears Get the Gimmies. For late-elementary-school-aged kids, Quest for the Pillars of Wealth by J.J. Pritchard is a chapter book that teaches the major personal finance concepts through an engaging adventure story. You could also get them a subscription to Zillions, a kids' magazine from the publishers of Consumer Reports, which covers money and buying topics.


"Another great opportunity to teach your kids about personal finance and get to spend quality time with them in the process is through board games," suggests Tyson. "Monopoly and Life are two games that are very effective at getting your kids to think about the best way to manage money and plan whether they should spend or save."


7. Teach them how to shop wisely. Family shopping trips, whether for groceries or something else, are likely to be your kids' first encounter with spending. They'll see you make decisions based on what the family needs, maybe see the occasional coupon used, and will observe how you pay. These trips are a great time to teach them lessons about money.


"Explain that being a smart consumer requires doing your homework, especially when buying more costly products," says Tyson. "Teach your kids the value of product research and comparison shopping. Demonstrate how to identify overpriced and shoddy merchandise. Finally, show them how to voice a complaint when returning defective products and go to bat for better treatment in service environments, two additional tasks that are part of being a savvy consumer."


8. Introduce the right and wrong ways to use credit and debit cards. Those plastic cards in your wallet offer a convenient way to conduct purchases in stores, by phone, and over the Internet. Unfortunately, credit cards offer temptation for overspending and carrying debt from month to month. Teach your kids the difference between a credit and debit card, explaining that debit cards are connected to your checking account and thus prevent you from overspending as you can on a credit card.


"Explain to them that credit cards should be used sparingly and then practice what you preach," says Tyson. "Wean yourself off of using your credit card, and tell your kids why you've decided to do so."


9. Encourage older kids to get a job. An allowance doesn't have to be the only way for your kids to earn money. Your child's initial exposure to the work-for-pay world can start with something as simple as a lemonade stand. Depending on age, he or she might do yard work for neighbors or offer babysitting services. And the fact that we're in a recession makes it all the more appropriate for older kids to "help out" by getting a part-time job—especially to fund unnecessary purchases like DVDs or cool clothing.

"I had an extensive newspaper route for a number of years, and I cut lawns and did other yard work during high school and college summers," says Tyson. "By holding down such jobs, kids can learn about working, earning, saving, and investing money. It also provides welcome relief for parents to not continually be the source of spending money. Working outside the home does raise some safety issues, so by all means be involved in ensuring that your child has a safe work environment."

Besides the learning opportunities it presents, there's another positive to the economic downturn, says Tyson. It forces families to be more thoughtful about how they spend their time—and this often leads to the stunning realization that money really doesn't buy happiness.
"Often, the pricey toys we buy for ourselves and our kids and the lavish vacations we take are simply distractions from the people we love," he says. "They send the message that it's necessary to spend a lot of money in order to have a good time. It's not, of course. The best things in life—friends, family, quiet evenings at home just being together—really are free. Sometimes it's good to be reminded of that."



--Eric Tyson

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Thursday, February 01, 2007

Savings at 73-Year Low & 5 Reasons Why I Didn't Save More

We've hit a new low in savings, according to a recent report from the U.S. Department of Commerce. The rate has dropped to a negative 1%, according to a report from the Associated Press.
"People are saving at the lowest level since the Great Depression, and that could be a problem for the millions of baby boomers getting ready to retire." source: Associated Press


I'm a younger baby boomer (48) and I see myself in those figures. I'm frugal now, but I wasn't for way too many years.


My Top 5 Bogus Reasons for Not Saving More

1) I thought I would be 29 forever.
reality: Ha! Every birthday since my 30th has been a wake up call.

2) I thought I would be rich by 35.
reality: Get real; Get over yourself.

3) I felt so behind in savings that I figured: Why bother?
reality: Despair is a dangerous money pit. Climb out with baby steps.

4) I was too busy paying bills to save more.
reality: Always pay yourself first.

5) I was too disorganized to create a plan.
reality: If I could find the time to exercise, I could have found the time to get organized. Fiscal and Physical fitness are important.

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Wednesday, January 10, 2007

Study: Housing Prices Still Untouchable for Paycheck-to Paycheck Workers

A local Miami hospital is providing housing subsidies as a work benefit, according a recent report in the Miami Herald. Why? Even with the steep drop in housing prices, home ownership is an American Nightmare for many.

Here's a report from Reuters.

'U.S. home prices may have dipped over the past year, but many American workers would still struggle to afford a median-priced home in major cities, a new study said on Wednesday.

"American workers are really not gaining ground and they're so far behind in the first place," said Barbara Lipman, research director for the nonprofit Center for Housing Policy, which conducted the study.' Source: Reuters



Here's the full text of the news release from the non-profit group:

HEALTH CARE WORKERS PRICED OUT OF HOMEOWNERSHIP IN MAJORITY OF U.S. METRO AREAS, NEW STUDY FINDS
Joint Announcement:
Center for Housing Policy Releases Disturbing New Housing Data for More Than 200 Metro Areas and 60 Occupations

Homes for Working Families Delivers New Resource Handbook of Proven Solutions to Help Ease the Housing Crisis


Washington, DC (January 10, 2007) – Health care workers are priced out of homeownership in the majority of U.S. Metropolitan areas nationwide, according to a new study of more than 200 Metro areas and 60 occupations released today as part of a joint announcement by the Center for Housing Policy and Homes for Working Families.

Specifically, the groundbreaking Center study Paycheck to Paycheck: Wages and the Cost of Housing in America found that licensed practical nurses would not qualify to purchase the median priced home in an astounding 187 of the 202 Metro areas studied, followed by registered nurses at 115 and physical therapists at 104, while nursing aides and home health aides are priced out of homeownership in all the Metro areas studied.

To address these and other housing challenges that key community workers face, Homes for Working Families has released Increasing the Availability of Affordable Homes: A Handbook of High-Impact State and Local Solutions, which identifies 22 proven high-impact policies that state and local leaders can implement to expand the availability of affordable homes within their jurisdictions.

“With Americans living longer and the baby boomer generation aging, our communities will need more health care workers to meet the growing demand. However, if these workers cannot afford to become homeowners, as this study shows, it will likely become difficult to attract a sufficient workforce,” said Center Chairman Kent Colton, president of K Colton LLC and senior scholar at the Joint Center for Housing Studies of Harvard University. “It is also clear from this study that housing affordability concerns stretch beyond the health care field to a spectrum of other occupations.”

“The lack of affordable homes for America’s working families is nothing short of a crisis, but solutions do exist. We are determined to bring those solutions to the forefront and provide decision-makers with practical policies they can adopt using tools such as our new resource handbook,” said Beverly L. Barnes, executive director of Homes for Working Families.

Paycheck to Paycheck Analyses
Health Care Workers

The Center’s study found that, overall, in the United States, an annual income of $84,957 was needed to qualify to purchase the median priced home of $248,000 in the third quarter of 2006. Yet, during this period the median annual salaries of registered nurses ($58,640), licensed practical nurses ($37,127), nursing aides ($24,745), physical therapists ($62,417) and home health aides ($20,414) all fell short.

Significant rental findings for health care workers in the 210 Metro markets studied reveal that nursing aides cannot afford to rent a typical one-bedroom home in 80 of the Metro areas or a typical two-bedroom home in 147 of the Metro areas studied. Home health aides cannot afford to rent a one-bedroom home in 144 of the Metro areas or a two-bedroom home in 201 of the Metro areas studied.

Additional Community Occupations

As part of its latest Paycheck to Paycheck study, the Center also performed a housing affordability analysis for the community workers on which the popular annual study traditionally focused in the past – elementary school teachers, police officers, nurses (data provided above), retail salespersons and janitors.

The study found that police officers would not qualify to purchase the median priced home in 161 of the 202 Metro areas studied, followed by elementary school teachers at 157, and retail salespersons and janitors who are priced out of homeownership in all the Metro areas studied.

Nationwide, the median annual salaries of elementary school teachers ($47,104), police officers ($45,780), licensed practical nurses ($37,127), retail salespersons ($24,597) and janitors ($23,724) all fell below the $84,957 annual income needed to qualify to purchase the median priced home of $248,000.

On the rental side, significant findings for the 210 Metro markets studied reveal that janitors cannot afford to rent a typical one- bedroom home in 91 of the Metro areas or a two-bedroom home in 177 of the Metro areas studied. For retail salespersons the typical one-bedroom home is unaffordable in 78 of the Metro areas and the typical two-bedroom home is unaffordable in 162 of the Metro areas studied.

New Resource Handbook Solutions
Increasing the Availability of Affordable Homes offers solutions to the growing crisis identified in the Paycheck to Paycheck study by detailing strategies and policies that can be implemented at the state and local levels to begin increasing the availability of homes affordable to working families. The handbook, prepared by the Center’s Executive Director Jeffrey Lubell, is part of Homes for Working Families’ efforts to increase access to homes affordable for working families through meaningful policy change at the local, state and national levels.

Six Strategic Categories and 22 Diverse Policies

The user-friendly policy handbook serves as a practical reference tool for state and local leaders – including elected and appointed officials, employers and other decision-makers – by first identifying six broad strategies for increasing the availability of affordable homes and then detailing 22 diverse policies within those strategic categories.

The six strategic categories are: 1) Expanding the availability of sites for the development of affordable homes; 2) Reducing red tape and other regulatory barriers to affordable homes; 3) Harnessing the power of strong housing markets; 4) Generating additional capital for affordable homes; 5) Preserving and recycling the resources that make homes affordable; and 6) Empowering residents to purchase and retain market-rate homes.

The handbook highlights 22 diverse policy solutions such as: making publicly owned land available for the development of affordable homes, revising zoning laws, leveraging employers’ interest in the creation of affordable homes, and using shared equity mechanisms to create mixed-income communities.

Increasing the Availability of Affordable Homes is among the first tools Homes for Working Families has created to promote state- and local-level solutions that mitigate the affordable housing crisis. Homes for Working Families will make the handbook available to opinion leaders and other advocates on its Web site and will also use the handbook as a “best practices” guide as it focuses on advancing policy changes in some of the nation’s highest-cost housing markets.

About Paycheck to Paycheck
The Paycheck to Paycheck study is provided in online, interactive format. Logon to Paycheck to Paycheck to compare homeownership and rental data for the more than 200 U.S. Metropolitan areas and more than 60 occupations studied.

Acknowledgments
Paycheck to Paycheck is released annually by the Center for Housing Policy, the research affiliate of the National Housing Conference, based on funding from Freddie Mac. The Homes for Working Families publication Increasing the Availability of Affordable Homes: A Handbook of High-Impact State and Local Solutions was developed with funding from the Annie E. Casey Foundation.

Data Sources for Paycheck to Paycheck
Wage information is as of the third quarter 2006 and was provided by salary.com, a private provider of salary information, which maintains a database of salaries by geographic location.

The home price data are from the third quarter 2006 and include new and existing home sales figures provided by the National Association of Home Builders (NAHB). In select cases where the data from NAHB were not available, existing home sale price data from the National Association of Realtors are provided.

Following conventional mortgage underwriting guidelines, the study assumes that not more than 28 percent of household income should be used to pay the mortgage, property taxes and insurance. The study further assumes a downpayment of 10 percent.

>Typical rents in each metropolitan area are based on the 2006 Fair Market Rents, issued by the U.S. Department of Housing and Urban Development. The weighted average 2006 Fair Market Rent nationwide was $821 a month for a two-bedroom home (the comparable national figure for a one bedroom home is unavailable). The Hourly Wage Needed to Afford (found in the Paycheck to Paycheck online tables) is the hourly wage that must be earned so that this rent does not exceed 30 percent of income, a standard measure of affordability.


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The Center for Housing Policy is the research affiliate of the National Housing Conference (NHC). The Center works to broaden understanding of America's affordable housing challenges and examines the impact of policies and programs developed to address these needs. For more information, please go to www.nhc.org.

Homes for Working Families is a nonprofit, charitable organization dedicated to advancing policy changes that enable more of America’s working families to find safe, good-quality homes they can afford. It focuses on the families of teachers, police officers, retail associates, office workers and others who struggle to find homes they can buy or rent in the communities they support. It pursues its mission at the local, state and national levels. For more details, please go to www.homesforworkingfamilies.org.






The Frugal Duchess Boutique



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Friday, November 10, 2006

WSJ: Condos Falter & Spark Lawsuits

In Southern Florida, it's been tempting to invest in condos. With low interest rates, the ocean breeze and a constant wave of visitors, condos seemed ripe for flipping. And for a long time, many investors and homeowners made tidy profits by trading in and out of homes. But recently, the condo market has been ailing in Southern Florida and other parts of the country.

I've heard that the latest trend in condo conversions is "reversions" in which condo buildings revert back into rental units, where there has been a real shortage of frugal or affordable units. (Many residents in Southern Florida have been turned out on the street, while their rentals were "converted" into upscale condos.)

Today's Wall Street Journal has an excellent piece about the condo market and the rash of lawsuits that have been filed in the real estate market.

With once-hot condominium markets across the country in sharp decline and many real-estate professionals predicting a further weakening, some developers are facing more than a glut of unsold inventory. Angry condo buyers from Boca Raton, Fla., to San Diego are taking them to court, alleging everything from breach of contract to fraud.

Some of the lawsuits claim that the amenities featured in glossy marketing brochures and model apartments never made it into the final product. Others involve much-hyped projects that went bust, leaving hundreds of buyers with contracts for condos that will never materialize. --WSJ

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Monday, November 06, 2006

Your Money or Your Time: A Frugal Debate

About 10 days ago, I requested help for a newspaper story about saving money or saving time. Here's the article that appeared in the Miami Herald.

In the tug-of-war between time and money, sometimes convenience wins out. And more importantly, sometimes costly shortcuts save money in the long run.

For example, I'm more likely to make a money-saving homemade pizza when I have a stock of pre-shredded mozzarella cheese on hand. My justification: Shredded cheese is more expensive than a block of cheese, but ultimately, I save more money by making my own pie.

Time pressures prompt many families and singles to eat out. But in that scenario, spending $6 to $10 for frozen dinners for a family of four ($1.50 to $2.50 per person) is cheaper than spending $40 at a restaurant, according to Terri Gault, founder of The GroceryGame.com an online shopping and coupon service.

It's a case-by-case judgment call, according to a recent Internet-based survey I created through Pollhost.com. ''How do you balance cost versus convenience,'' I asked bloggers and readers. An overwhelming majority (82 percent) of participants in my unscientific poll ''strike a balance'' between saving time and saving money.

Nine percent are willing to walk an extra mile to save a few bucks. But an equal amount of the respondents pay little attention to price tags during a time crunch.

''It's a constant battle. There are certainly times when everything goes out the window and anything that offers convenience at any price is worth it,'' wrote a personal finance blogger named 2million. ``I find balance by going the extra mile to save money as a normal practice. I don't even consider the convenience factor unless I'm in crisis mode.''

It's important to know the real-world value of your time, ''Rich Slick'' said. For example, he refuses to mow his own lawn. He feels his time is better spent earning money or playing with his kids.

''It would take me about two hours [on Saturday] to mow my lawn, trim the edges, pick up the grass/leaves and toss them in a bag. Two hours of my time equals $150. I can pay a lawn service company to do the exact same job (even better than I could do it) for $25. If on the other hand, I made $10/hour, then I'd probably mow the lawn myself,'' Rich Slick wrote.

Blogger Simplicity in Kansas says last-minute shopping for presents and other events can create a financial crunch. He avoids costly deadline spending by careful planning.

''I have found a little planning and patience, (waiting for sales), usually ends up saving me money. Keeping an active list of items I am looking for allows me to shop over time and find the best deal,'' Simplicity in Kansas wrote. For one-time, small-ticket savings of less than $10, the author of the popular website 1st Million at 33 (www.1stmillionat33.com) opts for convenience. ''The higher the dollar amount, the more time I will take to decide and comparison-shop,'' the author wrote.

There were other great posts in the comment section.

From my email box:

From www.scottonmoney.com

The rational choice is to simply figure out the additional cost of convenience, usually in terms of higher price, versus the benefit. This works well for me most of the time. But we have to deal with the powerful force of emotions as well. If something really bothers you or makes you happy you might not be able to easily measure the impact that it has on your life.

A case in point for me is soda. I like diet soda. It is ridiculously expensive at fast-food joints and I could save a dollar a soda easily by pouring one at home in less than 20 seconds. That works out to $120 dollars an hour which is by most measures a great return, but I buy the fast-food sodas anyway. Why? I like the fountain experience. I like the ease. It is worth it for me even though a rational analysis would say “don’t do it”.

Scott



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Wednesday, November 01, 2006

Sluggish Home Sales But Lots of Burgers to Go

The recent spate of financial news paints a dim view of the global economy. But despite the trouble spots, large orders of fast food are taking a bite out of family budgets and a lot of stuff is being purchased on credit.

The evidence: Corporate earnings were robust at Burger King and MasterCard. Here's a quick digest of major financial news, with short pull out quotes.

This market story from Reuters targets a drop in stock prices based on concerns about a possible slowdown in economic growth.

quote:
"Stocks are now worried about growth going too slow. They should be thinking that way," said Robert MacIntosh, chief economist at Eaton Vance Management in Boston. "Anecdotally I am reading about all these problems with auto companies and seeing unsold homes -- add it all up and things are quite bad.-- From Reuters"


But somebody is chewing on lots of Burgers. Profits were hot on the grill at Burger King, according to Businessweek.com

Burger King Holdings (BKC) on Nov. 1 announced a whopping 82% surge in quarterly profit and 7% gain in revenue, boosted amid factors such as tax changes and growing sales.--Businessweek.com


123Jump.com reported on the 82 percent hike in profits from MasterCard.

MasterCard Inc. (MA: chart), owner of the nation''s second-largest credit card brand, reported 82% profit jump in Q3, due to an improved revenue and a higher number of purchases worldwide.