Financial expert Ruth Hayden is on the first hour of Midmorning today (9 a.m.). News Cut is live blogging and I hope you’ll share your financial story in the comments section below.
Listen to the program (RealPlayer)
Her appearance comes at the right time. The Pew Research folks released a survey on Wednesday on the middle class. The report, called “Inside the Middle Class: Bad Times Hit the Good Life” said “for decades, middle-income Americans had been making absolute progress while enduring relative decline. But since 1999, they have not made economic gains.”
Is that true in your life? Is you paycheck feeling pinched. If so, what’s your plan?
8:14 a.m. – Happen to be watching the CBS Morning Show over the morning coffee and they had a segment with Janice Revel, senior writer of “Money” magazine on what to do with your
tax rebate stimulus check. She said: (1) Attack credit card debt, (2) Build emergency fund (3) Invest in retirement. Lofty stuff. I wonder how many people are like me. We had plans like that for the dough. Then the washing machine died Sunday in the middle of a load of darks, and we had to buy a new one, which ate up the entire check (which of course hasn’t arrived yet). At least we stimulated Maytag. (by the way, all financial advice tips will be in bold green so you can find it faster later on).
9:09 – “It’s just discouragement, they’re just feelingpoor,” Ruth says. With a 2-percent raise, you’re losing money. Consumer confidence, the news out today, is diving, according to a report that just came out this morning. It’s a 26-year low. We somewhat make it worse for ourselves, by “blaming” the other people in our homes (i.e. “how can you be spending more for groceries and not bringing home more food.”)
9:13 a.m. – Speaking of inflation, play around with this calculator.
9:17 a.m. – They’re talking about the price of a gallon of milk (up 19%). Here’s an interesting idea. A woman had her son pay for a gallon of milk, just so he’d see how much it costs to keep him fed (you know how teens are, right?).
9:19 a.m. – A commentator below chastises the middle class for not sacrificing… as opposed to the “working poor.” I wonder how many of the working poor consider themselves middle class?
9:21 a.m. – Ruth says a few years ago, more than 80 percent of the mortgages were adjustable rate mortgages. The mortgages are now resetting at a higher rate. These, of course, are the mortgages that others criticize when they say the problem with the housing crisis is people biting off more than they can chew. A few weeks ago, Marketplace reported, the percentage of mortgages that are adjustable rate, is inching up again. Is it that people haven’t learned?
9:23 a.m. – Don’t challenge your career path on a stage. Ruth tells a college student to get a second job. It’s a stage, but we will get through it. The fundamentals are still in place. In other words, don’t give up your dreams. Don’t buy a house until you know you can afford it just because they’re on sale. Consider deferring college loan debt.
9:26 a.m. – If you can do it without debt, it’s a great time to buy things that are “deflating” (cars, campers etc.). Don’t do things today that affect negatively later in your life. Taking money out of retirement “is a pristine example of that.”
9:31 a.m. – This idea that it’s just a stage… I get it, but it’s not true for everybody. Let’s take an example: You’re an older worker in a dying industry. If you’re cut, the chance of you being able to replace that job with a similar position — I would think — are relatively poor. Not that I object to a “the sun will come out tomorrow” approach to things, but is it really that simple? In looking at the survey above, I tend to think that’s behind the discouragement. In contrast to that, however, is this article, that the older worker these days has a chance to redefine their retirement. In any event, the worker is a moving target.
9:39 a.m.- Even if times are tough, if your employer matches contributions to a retirement fund, contribute at least 4 percent.
9:40 a.m. – Caller — single person — with a house says he’s taking in roommates. “We need to go back to being more practical in our approach,” he said.
9:43 – Ruth advises getting your free credit report. Here’s the URL she mentioned. annualcreditreport.com. I did this a few weeks ago, but here’s the thing. What am I supposed to do with it?
9:46 a.m. – “The stock market is on sale. It’s the perfect time to go into it,” Ruth says. This one scares me, only because I watch too much CNBC. But if you’re talking about taking advantage of a retirement plan at work, especially if an employer matches, that’s another story.
9:50 a.m. – “Our economy is based on healthy personal economics.” Don’t spend your stimulus check. One of the reasons we’re in trouble is we spent all this money based on debt. It’s not sustainable. Hang on to the money. Pay off debt or put it in savings.
9:55 a.m. – Kerri reads Nathan’s question below about wanting to consolidate student loans but not knowing who’s credible. Ruth suggests going back to your financial department at school and asking.
10:06 – I fixed the link to the inflation calculator above. Apologies.
For those of you who are visiting News Cut for the first time, courtesy of Midmorning, thanks for stopping by. We look forward to having you here more often. We’d like to keep the conversation going through the day, here, so if you have some stories to share, advice etc., please feel free.