Category: Budgeting (Page 5 of 5)

Using prepaid credit cards

September 4, 2011 / Staff

Fortune has an interesting article about the entrepreneur who created prepaid credit cards.

When the card was rolled out, kids didn’t show much interest but adults who couldn’t get checking accounts or credit bought the cards in droves, using them for such prosaic tasks as paying household bills. “I thought, ‘We have the right product, just the wrong target market,’ so we retooled,” Streit recalls.
Streit rechristened the company Green Dot (GDOT), got backing from Silicon Valley venture firm Sequoia Capital, and now is the largest provider of prepaid debit cards to the “underbanked” in America, a class estimated at 73 million people. Green Dot went public in 2010: Sequoia’s original $5.8 million stake is now worth around $270 million.
Its breakthrough came in 2005 when Wal-Mart (WMT) partnered with it for the Walmart MoneyCard, which customers load with money when they cash a paycheck or tax refund at a Wal-Mart. The retailer now accounts for 60% of Green Dot’s revenue, which hit $117 million in 2011’s first quarter, up 26% over 2010. With 4.3 million cards outstanding, it is far ahead of its closest rival, netSpend (NTSP), with 2.3 million. Wal-Mart was so impressed that it bought 9% of the company last year. Even the U.S. Treasury has started a pilot program to issue tax refunds on Green Dot cards.

It’s interesting how the card was created for students and then became popular with people who couldn’t get credit cards.

Budgeting, Personal Finance

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Basic budgeting for new graduates

June 4, 2011 / Staff

The Cleveland Plain Dealer has a good article on basic budgeting for new college graduates, but this advice can apply to everyone. The advice might seem obvious, but unfortunately many people, let alone young people, have no idea about this stuff.

A smart budget has three building blocks: the money you make, the money you spend and the money you save.
Once you draft a budget, you may discover your plans outstrip your actual income. The good news: You’re only in debt on paper.
The real value of a budget is it lets you spot potential money problems and fix them before they hurt you or your credit rating.

Check out the whole article, and you’ll be on solid financial footing for your life if you learn the basic rules of budgeting.

Budgeting, Personal Finance, Saving

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American are shedding their mortgage debt

May 16, 2011 / Staff

USA Today has a story on an interesting trend:

Americans are reducing mortgage payments at a record clip, directing cash that once went for debt into consumer spending and savings.
Low interest rates, defaults and refinancings have shaved more than $100 billion off the nation’s annual mortgage bill — an amount comparable to all unemployment benefits for one year or this year’s Social Security payroll tax cut.
“This is a form of economic stimulus that goes to Main Street rather than Wall Street,” says Nicholas Carroll, a journalist on consumer finance and author of Walk Away From Debt for a Better Future. When freed from a mortgage payment, people’s first purchases tend to be necessities, such as socks and underwear, he says.
Homeowners have trimmed interest payments alone by 11% — or $67 billion a year — from the peak in 2008, according to the Bureau of Economic Analysis (BEA). The savings come equally from grabbing lower interest rates and reducing what’s owed by paying down principal or defaulting on loans.

This is another positive byproduct of the real estate bust. Home prices keep coming down, and more and more Americans are underwater on their mortgages. So many of them are walking away. Homeowners with jobs and good credit are taking advantage of low mortgage rates to refinance and lower their payments.

This results in more disposable income, so Americans can spend more on typical consumer products.

Banking, Budgeting, Frugality, Real Estate, Saving

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The Medicare debate

April 23, 2011 / Staff

With the radical new budget proposed by Paul Ryan and passed by the House Republicans, we have a full-fledged debate about the future of retirement in America. Ryan’s budget removes the guaranteed Medicare entitlement and replaces it with vouchers (or premium supports, depending on who you listen to). According to the Congressional Budget Office, the subsidy from the government will not be enough for most seniors to purchase medical insurance, assuming private insurers even want to cover them.

This is a radical departure from the social safety net. The Republicans argue that this will not apply to current seniors, just those under the age of 55. But that cold comfort for everyone else, including seniors who care about the future of their children, relatives and friends.

It’s doubtful that anything like this will pass with the current President and Senate, but everyone needs to pay attention. Who knows, the next election may affect your retirement years.

Budgeting, Insurance, Retirement, Saving

budget battle health care for seniors health care planning health care vouchers health insurance Medicare Paul Ryan Ryan Budget

Category: Budgeting (Page 5 of 5)

Using prepaid credit cards

Basic budgeting for new graduates

American are shedding their mortgage debt

The Medicare debate

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