Personal Finance

Unaffordable Housing: Minimum Wage Won’t Put a Roof Over Your Head

Any list of basic necessities includes shelter—a roof over your head. But roofs, it turns out, are really expensive. In 2017, the federal minimum wage remains just $7.25/hour, although some states have gone as high as $11.50/hour. According to the National Low-Income Housing Coalition’s 2017 Out of Reach report, you’ll need to put in at least 51 hours at minimum wage in order to afford a one-bedroom apartment in South Dakota, the cheapest state.

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When Debt Collectors Call About the Rent

This post originally appeared on ConsumerLawyer.MN with the title “Debt Collector Calls About Rental Debt.”

Debt collectors and landlords go together like peanut butter and jelly. When a landlord has a dispute over rental debt or damage to a rental property, a landlord will frequently turn to a debt collector.

Many times, the debt collector either misrepresents the amount of the debt or what can happen if you don’t pay it. If you have been contacted by a debt collector about rental debt, here is what you need to know.

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Current Balance vs. Payoff Amount

Payoff amount and current balance are related but not equivalent terms.

Current balance means the amount you owe according to your statement. The next day, you will owe more. In other words, if you are trying to pay off a credit card and the statement says your balance is $514, you may not be able to bring your balance to zero and satisfy the debt by writing a check for $514. Instead, you would need to contact your lender to find out your payoff amount.

Payoff amount is how much you would have to pay to satisfy the debt. It is not the same amount as the current balance on your statement—at least not for long.

The difference between the current balance according to your statement and the payoff amount is crucial when you are ready to pay off your debt.

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Poverty is Expensive, Car Insurance Edition

How much more? On average, 59% more, but it can vary wildly. GEICO apparently charged one Minneapolis woman 300% more than a similar woman of “higher socioeconomic status.”

Insurance companies say the disparity is actually due to risk factors like education level and homeownership, not income. Those with less money tend to have less education and lower rates of homeownership, which apparently makes them more likely to get into an accident. But it amounts to the same thing: the less money you have, the more you probably pay for car insurance.

[Star Tribune via MinnPost]

Google to Ban Ads from Payday Lenders

From the Washington Post:

Google announced Wednesday that it will ban all payday loan ads from its site, bowing to concerns by advocates who say the lending practice exploits the poor and vulnerable by offering them immediate cash that must be paid back under sky-high interest rates.

This is huge. I used to run Google AdSense ads on this site, but stopped because it just felt wrong to be writing about the evils of payday lending while giving them a platform to reach consumers.

Google isn’t erasing payday lenders from the Internet. You will still be able to search for a payday loan. This just means payday lenders won’t be able to feature their ads on unrelated search terms.

Payday lenders are already complaining that this is unfair, of course.

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Personal Finance Cheat Sheet on an Index Card

All you need to know about personal finance is right there, according to Harold Pollack. Now, Pollack is not an investment manager or financial planner; he’s a professor of social sciences at the University of Chicago. But his index card (that’s it, above) was so popular he wrote a book, The Index Card: Why Personal Finance Doesn’t Have to Be Complicated, with Helaine Olen.

In an interview on Minnesota Public Radio, Pollack identified the most important thing on the index card:

The most important of the index card guidelines is the one many Americans do not follow: “Pay your credit card balance in full every month.”

“Credit card debt is so deadly,” Pollack said.

Like the rest of the advice on the index card, that’s solid advice everyone should follow. [Minnesota Public Radio]

Edit: If you like short-form financial advice, the New York Times asked eight financial writers to squeeze their best tips onto index cards, too.

The Frugal Stars Playing for the Washington Redskins

Just because you make millions, that doesn’t mean you should blow it all on cars. Or at least, that seems to be the lesson of some of the young stars on the Washington Redskins.

Two-time pro bowl running back Alfred Morris, who makes a base salary of $1.5 million this year, has taken to riding a bike to work and leaving it in his reserved parking space. On days when it’s too cold or otherwise inconvenient to cycle to the facility, Morris switches to a splashier ride: a 1991 Mazda 626, which he drove up from Florida as a rookie in 2012.

That’s smart, especially in a sport where it probably makes sense to get out before your brain turns into a sponge. [Wall Street Journal]

Being a Woman is a Rip-Off

Well this sucks:

A recent report from the New York City Department of Consumer Affairs found that, on average, products geared toward girls and women cost 7% more than similar goods for males. The agency, which analyzed almost 800 products from more than 90 brands sold in New York City, found that items targeting women cost more than the male versions 42% of the time

This is especially true for children’s toys, like the identical-except-for-color scooter pictured above. The report acknowledges that there are sometimes legitimate reasons for the price discrepancy. The “boy” products might be cheaper to make, for example, or less popular so they are put on sale. But that doesn’t apply across the board. Forty-two percent of the time, women pay more.

The New York Department of Consumer Affairs urges people to report gendered pricing discrepancies themselves using the #genderpricing hashtag. [Buzzfeed News]

Saving Money = Reducing Your Carbon Footprint

Not always, but frequently the things you can do to reduce your carbon footprint will also save you money. At the top of both lists: travel less.

Perhaps the biggest single thing individuals can do on their own is to fly less; just one or two fewer airplane rides per year can save as much in emissions as all of these other actions combined.

That’s pretty easy when it comes to vacation. There are plenty of things you could do in your own state that would involve less travel and cost. Avoiding travel might be harder when it comes to work, because sometimes there is no substitute for face time. But if you don’t need to be there, don’t go there. You’ll save money, time, and help the environment. [New York Times]

Cut These 3 Things to Actually Save Money

At The Motley Fool, Morgan Housel has an excellent article on how to actually save money. The bottom line: stop fooling around trying to drink less coffee or make your own lunches and focus on three things:

  1. Your house or apartment. Keep it modest.
  2. Your car. Get a car, not a truck or SUV, and make it an inexpensive, fuel-efficient one. Bonus points for buying used.
  3. Education. Go to an in-state school. Better yet, go to a community college for two years, then transfer to an in-state school for two years.

Pinching pennies is all well and good if you like pinching pennies. But savvy consumers don’t pinch pennies; they pinch dollars by the thousands. [The Motley Fool, h/t @DanielGershberg]