Let’s start this week with some history. Anyone remember the Glass-Steagall Act? I’ll admit, I’m too young, and I bet you are too, but if you studied finance at all, you know what it is, the law passed in 1933 that separated commercial banking from investment banking. Earlier this week, an excellent post from one of my favorite writers (but no byline at the site), titled Do We Need to Reinstate the Glass-Steagall Act? Perhaps, because whatever is happening now doesn’t seem to be working.
Next, at My Broken Coin, Aloysa explains Why I Took Out a 401K Loan. She offers some good logic and acknowledges that it’s not recommended by most advisors. Me, I think they need to fix the 401(k) loan once and for all. Finance is pretty convoluted in the first place, the crazy rules of what happens if you leave your company while a loan is in place doesn’t help matters. Nor doesn’t owing money at 18% when you can borrow at 4%.
The Wealthy Turtle shared 5 Money Leaks That Are Draining Your Wallet. It’s actually a rebuttal to Farnoosh Torabi’s 5 messy money mistakes, in which Mike agrees with a couple of her points, and disagrees with others. The key thing is – What are your money leaks?
Canadian Finance Blog posted Income Inequality and Financial Engineers, a nice piece on the increasing imbalance of wealth.
And last, before the Memorial Day Barbeque has to get fired up, Robb Engen explains Why tracking your spending makes sense. I’m a believer in Robb’s approach. Tracking spending to the penny for a period of time (I suggest a year) will help you understand where you spend, but more important, where you spend too much. For some, that one year is enough to get on track, for others, this exercise is one to keep up indefinitely.
Safe and Healthy Memorial Day to all.
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Facebook finally went public last week, at an IPO price of $38. This week, it closed at $31.91. A very tough start for this highly anticipated IPO.
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First, congrats to my fellow blogger, Len Penzo on his 16th wedding anniversary. This week he posted What Were They Thinking? 10 Grocery Product Ideas That Flopped. Well, Len, if you’re reading, my favorite product to fall into this category is “I hate peas.” I remember it somewhat fondly, and of course a quick search found that I wasn’t the only one. “I hate peas” was a product made of, yes, peas, but shaped like french fries and fried up. It was made in the 70’s before packaging was required to list things like calorie and fat content. I suspect the added fat negated any benefit of coaxing your kids to eat peas. Kind of like broccoli tempura, which I love.
Photo Credit: Gone But Not Forgotten Groceries
Jeff at Deliver Away Debt talked about Emergency Credit Cards, asking Is a credit card necessary for emergency purposes? For those in the debt payoff mode, Jeff’s answer was a strong “no.” And I agree. Jeff has done a remarkable job paying off his own debt and documented much of his progress at his blog. An inspiring story.
Boomer wrote How To Pay Off Your Mortgage Faster. If that’s your desire, go for it, but for reasons I put in my comments at Boomer and Echo, I’d avoid the Bi-Weekly mortgage.
From the department of really stupid tax mistakes, Joe Kristan posted Million dollar mortgages: when division = subtraction. A great warning about how choosing the wrong filing (joint vs marries filing separately) status can cost you dearly.
Generation X Finance article How Bartering and Trading Helps You Make Money and Help the Environment really intrigued me. There was no talk of tax consequences. As I understand it, the trades mentioned, even trading clothes for other clothes, is considered a taxable barter transaction. Hmm, I wonder if anyone will add a comment or question about that at Gen X.
And to wrap up this week, Hank Coleman wrote Being Too Frugal Can End Up Costing You Money. He offers instances of taking frugality too far, which really bring the point home. Good examples of when you don’t want to be that guy.
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The current crop of graduates are in for a double whammy, a low employment rate for new grads, and the debt load accumulated during their schooling. I envy their youth, but the the job market they are entering.
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Completely unrelated to finance, I’d like to share a poem appropriate for Mother’s Day. The Lanyard was published in 2005 by Billy Collins who was U.S. Poet Laureate from 2001-2003. I have to admit, if I just read it myself it might not have had the same impression as hearing the author read it himself. Billy Collins was a guest on the 2005 New Year’s Eve A Prairie Home Companion and I guess that if I recall his reading this over 6 years later, it must have caught my attention. Take a read or listen and let me know if you ever had your own lanyard experience with mom.
Frugal Zeitgeist posted that the Top 1% Keep Getting Richer. I don’t doubt that. Under median income (about $50K for a family) saving is very difficult, and income is all from wages. Someone already worth tens of millions of dollars isn’t likely to be a W2 employee. They are making money from their wealth. “The rich get richer” is hardly a new phrase, it’s been true for a long time now.
Jeremy Vohwinkle at Generation X Finance answers the question My Employer Stopped Matching My 401k – Should I Still Contribute? An excellent analysis of this issue, and with so many companies reducing or eliminating the 401(k) match, it’s something many need to think about.
Getting back to basics, Green Panda asked Do You Balance Your Checkbook? It seems that many of his friends who don’t are paying overdraft fees that are adding up. Jane and I are paid every two weeks, and we don’t balance to a mailed statement, we balance with every check. The deposit goes in, and we quickly look at the balance the bank says we have, subtract the checks that haven’t cleared, and the numbers match. Right then, we look to see what bill will auto-pay before the next paycheck and make sure they’re covered. It’s actually faster and easier than it sounds.
And to wrap the week up, 6 Ways College Grads Can Save On Their First Apartment, a guest post at Planting Money Seeds. I’ll admit, I’m a sucker for a good list, and if you’re a recent grad or about to be, this is a list worth reading.
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