SavvySugar

How Would You Grade Yourself on Managing Your Finances?

Emily Co — Thu, 17 May 2012 00:15:38 PDT

When asked how he would grade himself on dealing with the economy, President Obama said on Tuesday's The View that he would give himself an "incomplete." He went on to say, "Because of the steps we took, the economy is much stronger than it was when I came into office."

Now that we know the grade our president would give himself, what letter grade you would give yourself for managing your own finances? Realistically speaking, do you think you can do better with handling your money, or do you have it down pat?

Why Does Rent Keep on Rising?

Business Insider — Tue, 17 Apr 2012 03:05:00 PDT

If you're frustrated by the increase in rent, you're not alone. Business Insider sheds some light on this phenomenon.

With mortgage rates at record lows and a rental market flooded with previous homeowners, most experts agree that now's the time to transition from renter to buyer.

That's easier said than done.

Today's reality is that consumers left battered and bruised by the recession aren't exactly the most attractive candidates for home loans - especially at a time when lenders are choosier than ever with loan applicants.

The result is a new wave of frustrated renters, says Citi Habitat President Gary Malin. Edged out of the housing market by foreclosure or turned down by lenders, they're left with no choice but to rent at some of the highest rates in years.

In Manhattan alone, the first quarter of 2012 brought the highest monthly rent average since 2007, tipping past the $3,400 mark, according to the brokerage firm's latest data. The city's vacancy rate is hovering just about the one percent mark.

"In Manhattan, in general, the housing market has yet to fully recover," Malin says. "Look at the cost of acquisition and the cost selling. If you don't have a long enough time, you might not get your money out."

Read on for more.

What Is the Buffett Rule?

Emily Co — Wed, 11 Apr 2012 13:13:39 PDT

We all know who Warren Buffett is (he's only the third richest man in the world) and we all know about his constant push for heavier taxes on the wealthy. The Buffett Rule, proposed by the Obama Administration last year, is a tax law that is meant to raise taxes for millionaires. For those who need a quick and simple primer, here's a rundown of the issue.

Why call it the Buffett Rule?

Last August, billionaire Warren Buffett wrote an op-ed in the New York Times, which called for action to "stop coddling the super-rich" and start taxing them more. To demonstrate the need to raise taxes, the renowned investor says that he's paying only 17.4 percent of his taxable income, a lower rate than what his secretary is paying.

Buffett proposed the idea of raising tax rates for those who are making more than $1 million and even higher rates for those earning over $10 million. His words spurred President Obama to pitch the Buffett Rule a month later (or perhaps it was already in the works and the timing of the op-ed was perfect), a tax plan that's meant to even out the income equality and hopefully make a dent in our $15 trillion debt.

What does the law say?

The Buffett Rule proposes to raise the tax rate on people who make more than $1 million to $2 million annually and raise rates up to 30 percent for those who make more than that. The idea is that the wealthy should be paying tax rates equivalent to what middle-income Americans are subject to.

Why are millionaires paying less taxes?

Right now, the current tax law taxes ordinary wages up to 35 percent, while capital gains and dividends are at 15 percent. Those who make most of their money through investments have enjoyed a lower tax rate. The new law will include people who make millions on their investments every year.

Read on for more.

Can You Cash in on Facebook's $5 Billion IPO?

Emily Co — Sat, 04 Feb 2012 00:15:10 PST

Everyone's buzzing about the Facebook IPO, and after hearing about how many billionaires and millionaires the IPO will create, you might think that it's your chance to make money off this cash cow. But first, you need to educate yourself.

What's the deal about IPOs?

Facebook used to be a private company, which means its shares were not sold to the public. Once a firm goes public, it's on the stock market and it sells a part of itself to outside investors who can afford it. The term for going public is also known as an IPO or initial public offering.

Why would a company go public?

A company that sells shares to outside investors can stand to raise a lot of money. Current estimates of the Facebook IPO are at $5 billion. Companies can do a lot with the capital raised - they can use it to pay down long-term obligations, fund new opportunities, and even acquire competitors. Further, initial private investors who wish to exit can now sell their shares to public investors.

Read to find out about buying Facebook shares.

How Long Should Unemployment Benefits Last?

Emily Co — Wed, 18 Jan 2012 11:54:31 PST

Everyone has a strong opinion on unemployment benefits because while it's helpful for those down on their luck, there are instances where the system is abused. Extending unemployment benefits is actually quite a hefty cost for the government - extending unemployment benefits in the last four years cost us $185 billion, says CNN Money. Then again, some experts argue that the money the unemployed receive goes back into the economy because it's spent on food, money, and other expenses. So, what do you think - how long should unemployment benefits last?

How the American Airlines Bankruptcy Will Affect You

Emily Co — Tue, 29 Nov 2011 11:56:27 PST

There's always a feeling of confusion when a major retailer goes bust, but what we really want to know is what it means for us and how we'll be affected. American Airlines announced it was filing for bankruptcy this morning, which leaves loyal customers wondering what's going to happen to their miles and if it's going to be harder to book a flight with them. Here's a quick roundup of burning questions you might have:

Will American Airlines go out of business and stop flying?

When a company files for Chapter 11 bankruptcy, it doesn't mean it's going to close shop and disappear. It just means the airline gets time off from creditors to do some financial reorganization. Chapter 7 bankruptcy, on the other hand, would mean that business would close. American Airlines has not filed for that, and there seems to be no plans to do so. Airlines such as Delta, Continental, and United have all filed for bankruptcy and are now stronger for it after taking the time needed during the bankruptcy period to put their books in order.

Can I still use my miles?

Yes, the airline says that the frequent flier program will not be affected, and you'll be able to redeem and use your miles. In the past, airlines that have gone bust, such as Pan Am and Eastern, transferred miles to the airlines that purchased some of their assets.

What's going to happen to my flight?

You don't have to worry about the tickets you currently hold, according to Rick Seaney, the CEO of FareCompare, a company that helps customers find air travel deals online. “Tickets won’t be an issue because of the kind of bankruptcy they’re filing,” Rick tells Time. The airline has also said it will continue to honor tickets and reservations.

Read on to learn how you should manage your miles.

Write a Letter to Obama and He May Send You a Check

Emily Co — Sat, 22 Oct 2011 03:05:14 PDT

It sounds pretty incredible but President Obama actually reads some of the letters people write to him, according to the Washington Post. Apparently, the head of state reads 10 out of the 20,000 letters sent to him daily and says it's a great way to feel connected to people as well as a good reminder of why he decided to run for presidency. The Post says:

"A few times during his presidency, Obama admitted, he had written a personal check or made a phone call on the writer’s behalf, believing that it was his only way to ensure a fast result. 'It’s not something I should advertise, but it has happened' he told me. Many other times, he had forwarded letters to government agencies or Cabinet secretaries after attaching a standard, handwritten note that read: 'Can you please take care of this?'

'Some of these letters you read and you say, Gosh, I really want to help this person, and I may not have the tools to help them right now,’ the president said. 'And then you start thinking about the fact that for every one person that wrote describing their story, there might be another hundred thousand going through the same thing. So there are times when I’m reading the letters and I feel pained that I can’t do more, faster, to make a difference in their lives.' "

Most of the letters are written by people in very dire financial circumstances. If you're interested in what people are saying, read some samples of the letters here.

Whether you want to voice your appreciation or frustration, here's the address you can send your letter to:

President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Remember to put a stamp on it before you mail it off!

What Exactly Is Occupy Wall Street?

Emily Co — Tue, 11 Oct 2011 12:17:30 PDT

You might have heard about Occupy Wall Street, a nationwide movement spurred by the frustrations that many hold about the economic state of this country. The protesters are unhappy about a number of issues. Mainly, the great disparity between the wealthy one percent versus the 99 percent of the general population and the fact that banks weren't held accountable for their actions that brought about the global meltdown. Here are a few quick facts to get you up to speed:

When this started: They first marched onto lower Manhattan on Sept. 17 and have been camped out there ever since.

Who they are: Occupy Wall Street is the "leaderless resistance movement" that's headed by Adbusters, an activist magazine.

Why it's gaining momentum: This movement is gaining momentum because of the widespread dissatisfaction among the general public that's spurred by the high unemployment rate, foreclosures, and other money woes caused by the recession. The appearances by various high-profile people like Michael Moore and Kanye West at the protest sites have also raised the movement's visibility in the media.

How to contribute: If you want to get involved in the movement going on in your city, check out OccupyTogether.org for listings of the meetups. Occupy Wall Street is also taking donations through this link.

What they want: The group as a whole hasn't really decided on a specific demand and doesn't have a long-term strategy or goals as of yet. Basically, they are just trying to voice their frustrations through peaceful demonstrations. However, it appears that each individual protester does have certain demands in mind. For a quick look to see what some protesters are asking for, watch the video below:

Do you support Occupy Wall Street?

6 of the Weirdest Economic Indicators

Emily Co — Wed, 28 Sep 2011 05:00:21 PDT

Experts rely on dry statistics such as unemployment figures and the consumer price index to gauge where the economy is going, but there are other less serious ways to monitor our financial state. Even you can get your finger on the pulse of the economy by observing the trends you can relate to. Here are a couple of the weirdest economic indicators:

Divorce rates: A rise in divorce rates is a good sign for the economy - it means the credit markets are opening and the economy is on the mend. The recession drives people to postpone divorce because of the expensive legal fees and inability to sell their houses.
Nail polish: It used to be that sales of lipsticks correlated with the economy, but not so much anymore, says Leonard Lauder, Estée Lauder chairman emeritus. Women used to turn to lipsticks during the recession as an affordable pick-me-up, but have now replaced them with nail polish. In fact, sales of nail enhancers have jumped 65 percent since the first half 2008.
Men's underwear: During a recession, men will skip out on buying underwear. This is one of the most reliable economic indicators, according to Alan Greenspan, the former chairman of the Federal Reserve.
Hot waitresses: When there is a recession, there are more hot waitresses around due to the lack of jobs that will leverage their hotness. The New York magazine says, "In flush times, there is a robust market for hotness. Selling everything from condos to premium vodka is enhanced by proximity to pretty young people (of both sexes) who get paid for providing this service. That leaves more-punishing work, like waiting tables, to those with less striking genetic gifts."
Miniskirts and dresses: According to the Hemline Index, when miniskirts and dresses are trending, the economy is apparently doing well. The index was developed by economist George Taylor, and the theory apparently has some credence. I can just imagine the men being slapped for trying to conduct this type of "economic research."
Online dating: Lonely hearts abound during a recession, and more people take to sites like Match.com when the going gets tough. The site had one of its strongest quarters in 2008 when the recession was at its peak. Experts speculate that misery loves company and people love to seek other people for comfort during tough economic times.

Brilliant or Baffling: Norway's Luxurious Prisons

Emily Co — Thu, 22 Sep 2011 10:45:03 PDT

Norway's prisons seem like holiday resorts, and it's clear that a lot of money is being spent on them.

In the second largest prison in Norway, the Halden Prison, inmates are treated to a flat-screen TV in their individual cells, and up to 10 to 12 cells share a kitchen and a living room. There are also rock climbing walls, a recording studio, and an official high school within Halden. About $1 million was spent on artwork and light installations to make it a welcoming environment for the prisoners.

The idea behind these hefty expenditures is that prisoners should be treated as people, and the more humanely you treat them, the less likely they are to commit similar crimes again. Perhaps it's working - Norway's recidivism rate is 20 percent compared to America's rate of 60 percent. What do you think: is this a brilliant or baffling idea?