WBEZ | Your Money http://www.wbez.org/tags/your-money Latest from WBEZ Chicago Public Radio en Wall Street's Ups And Downs Leave Investors Worried http://www.wbez.org/story/2011-08-11/wall-streets-ups-and-downs-leave-investors-worried-90497 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-August/2011-08-12/downgrade_01.jpg" alt="" /><p><p>It's been a volatile couple of weeks on Wall Street. With all of the major stock indexes down more than 10 percent since mid-July, individual investors are wondering what they should do.</p><p>When was the last time you checked the movement in your brokerage account, your 401(k) or IRA?</p><p>With all of these wild movements in the markets, it can be scary for investors. "Rightly or wrongly when they hear of the volatility, they're probably logging online into their accounts more frequently, which is probably not a great idea," says Michael Mussio, a portfolio manager at FBB Capital Partners. The firm manages money for individual investors, many of them retired or close to retirement age.</p><p>The phones have been ringing more than usual at Mussio's office in recent days, particularly on those days when stock prices slid dramatically into the market's close.</p><p>"We're seeing a global kind of repricing of risk assets right now," he says. "And I think outside of the daily volatility the thing that's making people anxious is the speed with which we've seen it. It's literally been the last 11 or 12 trading days, which is kind of crazy."</p><p><strong>Don't Panic</strong></p><p>But Mussio has a simple message for his clients and other investors.</p><p>"I think the main thing is — don't panic," he says. "If you feel the urge to panic, it's usually that feeling, it's the fight or flight that causes somebody to sell at the bottom and causes somebody to buy at the top."</p><p>Don't panic, don't panic. It could be the motto of financial advisers everywhere this week.</p><p>Ted Davis, with Ameriprise Financial, runs a financial planning practice in Fairfax, Va.</p><p>Davis says he hasn't gotten as many panicked calls as he might have expected. But he's been reaching out to his clients to keep them calm.</p><p>"This is a very emotional time and therefore they need to understand the role that emotions play as they're making investment decisions," he says. "I think we all know that we don't tend to make good financial investment decisions in highly emotional times — you know, whether we're exuberant or very, very nervous."</p><p>One of the reasons Davis isn't getting bombarded is that he and his clients have a plan. That's the whole idea behind financial planning after all.</p><p>"We're not flying blind. We're not throwing darts at the board," he says. "We do have a plan. The world is not predictable, but the plan is built so that we can react to an unpredictable world."</p><p><strong>Realize The Market Will Fall</strong></p><p>His clients' investments are diversified. Davis says it's not all stocks, or bonds, or commodities, or cash — it's a mix, including some that tend to be countercyclical.</p><p>"You want to add some asset categories that are going to zag when the other investments are zigging," he says. "You just want to have some offset there."</p><p>This might include precious metals or agricultural commodities. The key is to have a diverse portfolio so that in a bad patch not everything takes a hit all at once.</p><p>Jane Bryant Quinn, a personal finance columnist, says she's "been hearing from people. But of course they say, 'What should I do now?' And my answer is how come you weren't thinking about this before?"</p><p>"Stock market panics are normal," she says. "This is the third one we've had in the past 10 years. And so when you're looking at what you're doing with your money, and suddenly you say, 'Oh, I'm shocked, look at what just happened,' I say, 'I'm shocked that your plan did not consider the fact that the market would fall as well as the fact that the market would rise.' "</p><p>But Quinn says thanks to all of this recent experience, she thinks it won't be so bad this time around.</p><p>"A whole lot more people plan for bad days now," she says. "I think they learned a lot of lessons in 2008, 2009. I don't think they're in such bad shape." <div class="fullattribution">Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1313134963?&gn=Wall+Street%27s+Ups+And+Downs+Leave+Investors+Worried&ev=event2&ch=1018&h1=Around+the+Nation,Your+Money,Economy,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=139537807&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110812&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=3&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Thu, 11 Aug 2011 23:01:00 -0500 http://www.wbez.org/story/2011-08-11/wall-streets-ups-and-downs-leave-investors-worried-90497 Protecting Your Money Amid U.S. Credit Downgrade http://www.wbez.org/story/2011-08-09/protecting-your-money-amid-us-credit-downgrade-90302 <p><p>Dow Jones dropped more than 600 points Monday, and Wall Street's nerves are shaken by the risk of another recession. So what should ordinary Americans do with their stocks now, and what does the downgrade mean for savers, borrowers, retirees and job seekers? Guest host Allison Keyes speaks with NPR Senior Business Editor Marilyn Geewax and <em>Wall Street Journal </em>Economics Reporter Sudeep Reddy. <div class="fullattribution">Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1312906027?&gn=Protecting+Your+Money+Amid+U.S.+Credit+Downgrade&ev=event2&ch=1018&h1=Around+the+Nation,Your+Money,Economy,Business,U.S.,News&c3=D%3Dgn&v3=D%3Dgn&c4=139241461&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110809&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=46&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Tue, 09 Aug 2011 11:00:00 -0500 http://www.wbez.org/story/2011-08-09/protecting-your-money-amid-us-credit-downgrade-90302 When You Call A Locksmith, Will A Con Man Answer? http://www.wbez.org/story/2011-07-19/when-you-call-locksmith-will-con-man-answer-89386 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-July/2011-07-20/locksmith.jpg" alt="" /><p><p>Hard economic times often give rise to swindlers, people hoping to make a quick buck by misleading hapless consumers. It's not easy to catch these conmen, who often go door-to-door. But there's one scam out there that's mobilized an army of angry people. The scam has locksmiths up in arms.</p><p>Bill Roberts has been a locksmith serving small cities in central Virginia for seven years.</p><p>Out on a recent service call, he said he has a good, steady business — "if you don't mind working long hours, and being on call 7 days a week, 24 hours a day."</p><p>"It makes it a little hard on family life at times," he says, "but yes, it's not a bad business to get into."</p><p>But 100 miles to the north, in a suburb of Washington, D.C., locksmith Mark Baldino is worried. From his office, he does a computer search for locksmiths in Reston, Va.</p><p>Pointing to the results, he says, "'B' is our red dot, but within have a half a mile, you see one, two, three, four, five other locksmiths. And if you scan out on the map a little bit further, you'll see about 10 locations, maybe 20."</p><p>The problem is that few of those listings are legitimate locksmiths. Most ring to an out of state call bank that quotes a low rate — then dispatches a con man, who's not trained to pick locks.</p><p>Joanne Grimes is a retired teacher who owns rental property in Alexandria, Va. Her tenants were told a service call would cost $185, but the bill came to $586.</p><p>"You know, I can go to Home Depot and buy a lock and a door for $600," she says.</p><p>Grimes contacted the <a href="http://www.bbb.org/">Better Business Bureau</a>, where president Edward Johnson has been trying for five years to get something done about phony locksmiths.</p><p>"One of the larger ones that the BBB has identified is a company that poses as a local locksmith in cities across the country. And indeed, they advertise in the Yellow Pages using local phone numbers and fake local addresses," Johnson says. "A consumer might think they're dealing with a local locksmith, but the phone call is actually routed to a call center located in the Bronx of New York City."</p><p>But stopping these scammers has been difficult. In Richmond, Va., locksmith Jeff Musser, who founded a company called 1-800-UNLOCKS, says consumers rarely dispute the bill.</p><p>"They've got a kid to pick up from school. Their husband is at work. They've got to get that key made," he says. "When they give a credit card, sky's the limit with the credit card."</p><p>And his partner, Barry Wilson, says some victims are afraid to complain. He recently got a call from a woman who said she was overcharged and left with a broken lock.</p><p>"Her door lock was drilled open, and she was pretty petrified," Wilson says. "I tried to get her to talk to the investigator with the department of criminal justice, and she just wouldn't. She just said, 'Please come and fix it, and I'll pay you whatever.'"</p><p>Asked if the scammers got any money from the woman, Wilson says, "Oh yeah, he made her get it out of the debit machine that night."</p><p>In response to this situation, locksmiths have been joining a Texas-based trade group — the <a href="http://www.aloa.org/">Associated Locksmiths of America</a>. Their dues help pay for a series of public service announcements — something attorneys general have also tried.</p><p>In one such spot, Macie Pridgen of the Virginia Beach Commonwealth Attorney's office warns the public "to beware of untrustworthy locksmith companies who are ripping off consumers across the country."</p><p>The message urges customers to be cautious, noting that most of the locksmiths use an unmarked vehicle, and only accept cash.</p><p>The locksmiths' group has also hired a lobbyist to promote stricter laws. Fifteen states now regulate locksmiths, and a few have taken con artists to court. The locksmith scam has even caught the attention of the FBI — but so far, the bureau says it's not dangerous or costly enough to warrant a national investigation. <div class="fullattribution">Copyright 2011 WVTF Public Radio. To see more, visit <a href="http://www.wvtf.org">http://www.wvtf.org</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1311148862?&gn=When+You+Call+A+Locksmith%2C+Will+A+Con+Man+Answer%3F&ev=event2&ch=1018&h1=Business+Story+of+the+Day,Around+the+Nation,Your+Money,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=138480822&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110720&v19=D%3Dc19&c20=697&v20=D%3Dc20&c21=3&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Tue, 19 Jul 2011 23:01:00 -0500 http://www.wbez.org/story/2011-07-19/when-you-call-locksmith-will-con-man-answer-89386 Crusade To Fix Tax Code Gains Steam http://www.wbez.org/story/2011-07-09/crusade-fix-tax-code-gains-steam-88925 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-July/2011-07-09/taxclimb_vert.jpg" alt="" /><p><p>After leaving negotiations on raising the debt ceiling last Thursday, House Speaker John Boehner said that "comprehensive tax reform ... is under discussion."</p><p>On Wednesday, the Senate Finance Committee and the House Ways and Means Committee will hold a joint session on tax reform for the first time since 1940.</p><p>The idea of tax reform has been tossed around Washington left and right this month. Most Democrats and Republicans agree that the tax code is unfair and overly complex. But what exactly is wrong with it? What are lawmakers planning to do it about? And would a bipartisan deal actually solve the fiscal crisis?</p><p><strong>A Case Study: Capital Gains</strong></p><p>While the income tax rate on America's highest earners is 35 percent, many of those earners actually pay quite a bit less. This is because much of their income does not come from traditional wages, but from stocks and bonds, income known as capital gains, which is taxed at 15 percent.</p><p>"It's an obsolete provision that originated in the 1970s when we had double-digit inflation," David Stockman tells weekends on <em>All Things Considered</em> host Guy Raz. Stockman, the director of management and budget under Ronald Reagan, supported the measure at the time as a congressman from Michigan. "With double-digit inflation," he says, "you were taxing phantom gains."</p><p>The U.S. hasn't suffered from that kind of inflation in 30 years. Since then, the low capital gains tax has become a huge windfall for the rich, and that's not all.</p><p>"Worse, it is an incentive to get all of the high-paid tax lawyers and accountants in the world to figure out ways to transform earned income into capital gains," Stockman says.</p><p>If capital gains were taxed at the same rate as regular income, he says, the government could bring in tens of billions of dollars more each year. But more importantly, he says, ending the perverse incentives could lead to even more revenue down the road when income of all types is taxed uniformly.</p><p><strong>Devilish Deductions</strong></p><p>For Democratic Sen. Mark Warner of Virginia the devil is in the details, namely, the many thousands of deductions that have been added to the tax code over the past 25 years.</p><p>Warner tells Raz that these tax policies "individually might make some sense, but in aggregate, they make our code much too complex."</p><p>Warner proposes a decrease in the top income tax rate — from 35 percent to somewhere around 30 percent — paired with reductions in tax write-offs, such as the home mortgage deduction.</p><p>"Let's just make it apply for the first home, and instead of having a $1 million cap, have a $500,000 cap," he says.</p><p>Because changes to these deductions would face strong blowback from special interest groups, Warner advocates tackling the whole tax code at once.</p><p>"I think the only way, in a practical sense, you do it, is if you put a package together that has a bit of shared sacrifice and everybody has skin in the game," he says.</p><p>"If you do these sequentially, the forces of the status quo will always win."</p><p><strong>A Problem Of Biblical Proportions?</strong></p><p>Republican Rep. Charles Boustany of Louisiana says he, too, is alarmed at the amount of deductions on the books.</p><p>"The tax code is 10 times larger than the Bible," says Boustany, who sits on the House Ways and Means Committee, the group in charge of overseeing the tax code. "Without the good news."</p><p>The tangle of write-offs and loopholes makes even the laws of Leviticus seem succinct, he says.</p><p>He tells Raz the tax code is "complex not only for business owners and for families who have to grapple with it, but also complex from an administrative standpoint." Refundable tax credits have been particularly problematic, he says.</p><p>"We've seen overpayments, we've seem some fraud, and we've had a number of hearings on this in Congress," he says.</p><p>Boustany says that Congress has to develop a series of metrics to evaluate the economic impact of each tax credit and analyze them one by one.</p><p>He foresees tax reform as a drawn-out process. But even in a hyperpartisan Congress, he says, both sides have shown the seriousness necessary to get a deal done.</p><p><strong>Rocky Road To Reform</strong></p><p>Eugene Steuerle is intimately familiar with the drawn-out process of tax reform. While working at the Treasury Department in 1984, Steuerle became a primary architect of what became the Tax Reform Act of 1986. The act closed many loopholes and was passed with bipartisan support. But Steuerle says it didn't get everything right.</p><p>"We didn't do a very good job in '86 at restricting the new special provisions that would come on immediately after," he says. "We didn't get very far with dealing with those provisions that are very large and expensive, but apply mainly to the middle class."</p><p>Steuerle thinks U.S. fiscal problems are too deep to be solved by taxes only on wealthier Americans, even though he acknowledges that that group has disproportionately benefitted from the current tax code.</p><p>"Most government is supported by the middle class and most of the benefits of government go to the middle class," he says.</p><p>Yet tax increases on the middle class in this climate would be politically tenuous, if not suicidal.</p><p>"We have had a government that for at least 15 years now and maybe longer, that has never really asked the public for much of anything," he says. <div class="fullattribution">Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1310244732?&gn=Crusade+To+Fix+Tax+Code+Gains+Steam&ev=event2&ch=1018&h1=Your+Money,Economy,Politics,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=137729769&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110709&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=2&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Sat, 09 Jul 2011 15:49:00 -0500 http://www.wbez.org/story/2011-07-09/crusade-fix-tax-code-gains-steam-88925 Aging Card Technology Drives Rise In Credit Fraud http://www.wbez.org/story/2011-06-02/aging-card-technology-drives-rise-credit-fraud-87358 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-June/2011-06-03/credit_atm.jpg" alt="" /><p><p>U.S. credit and debit card fraud is on the rise. According to one survey, nearly a third of American consumers have reported credit card fraud in the past five years.</p><p>And part of the problem, as Andrea Rock of <em>Consumer Reports</em> tells NPR's Mary Louise Kelly, is that U.S. card issuers rely on security systems that lag behind measures taken in other countries.</p><p>"The credit and debit cards that most Americans use are really surprisingly vulnerable to fraud," Rock says. "Because, unlike cards in most of the rest of the world, they rely on outdated technology."</p><p>Rock, a senior editor at <em>Consumer Reports</em>, <a href="http://www.consumerreports.org/cro/magazine-archive/2011/june/money/credit-card-fraud/overview/index.htm">wrote about the technology gap</a> in a recent article for the magazine.</p><p>"The account information that's needed to make a transaction on American cards is stored, unencrypted, on a magnetic stripe on the back of each card," she says.</p><p>That information is easily copied and reproduced on a bogus card. Rock says that in general, thieves prefer to target debit cards, which allow them to get cash from an ATM, instead of conducting risky transactions in a store.</p><p>By contrast, credit and debit cards are much more secure in Europe, Rock says. First of all, the account information is in a computer chip that's embedded in the card, instead of on an easily read magnetic stripe.</p><p>"It's less easy to copy; the data on it is encrypted; it often includes an identifying code that changes with each transaction," Rock says.</p><p>Many of the cards, called "chip and PIN cards," also require the user to enter a PIN number to access an account.</p><p>But those cards aren't commonly used in America. And Rock says that the reason boils down to economics — and a dispute over who pays for card fraud.</p><p>U.S. credit card issuers, Rock says, "claim that losses due to fraud here don't yet exceed the cost they'd incur in switching to the new technology. But the merchants say that that's because the banks shift much of the cost burden for fraud onto them, anyways."</p><p>That situation has led some large American retailers, like Walgreens, Kroger and Sears, to push for an adoption of the more secure card technology, Rock says. And chain stores like Best Buy, Home Depot and Wal-Mart are beginning to install new sales terminals that can process the smart-chip cards.</p><p>"When this technology for cards was introduced in France way back in 1992, total fraud losses there dropped by 50 percent," Rock says. Card counterfeiting, she says, dropped by 78 percent.</p><p>As U.S. card systems start to catch up with the rest of the world, Rock says there are some steps consumers can take to protect themselves.</p><p>First, she says, never enter your PIN number unless you absolutely must.</p><p>"It's better to use a credit card rather than a debit in general," Rock says.</p><p>That means that if a merchant offers the choice, consumers should choose the "credit card" option when using their debit card in a store.</p><p>That's because while most card issuers offer zero-liability policies for losses, "under the law, the liability for unauthorized transactions is greater for debit card holders," Rock says.</p><p>And when using an ATM, Rock says to be sure to cover the keypad while entering your PIN, so that a nearby camera or a spying thief can't use it to make a fraudulent card. <div class="fullattribution">Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1307082126?&gn=Aging+Card+Technology+Drives+Rise+In+Credit+Fraud&ev=event2&ch=1018&h1=Around+the+Nation,Your+Money,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=136896517&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110603&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=3&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Thu, 02 Jun 2011 23:01:00 -0500 http://www.wbez.org/story/2011-06-02/aging-card-technology-drives-rise-credit-fraud-87358 Monkey Bars No More: Trying The Money Playground http://www.wbez.org/story/2011-05-16/monkey-bars-no-more-trying-money-playground-86633 <img typeof="foaf:Image" src="http://llnw.wbez.org/0" alt="" /><p><p><em>Part of a <a href="http://www.npr.org/series/136275928/money-counts-young-adults-and-financial-literacy">series</a></em><em> </em><em>on young people and financial literacy</em></p><p>Fairfax County in the Washington, D.C., suburbs has plenty of shopping malls. Finance Park, though, is the only one exclusively for tweenagers. Every eighth-grader in this large, suburban school system must show up at this mock-up of the real world, spend money, and act like an adult for a day. Jacque Weir says she was magically transformed into "a single mom with an eight-year-old."</p><p>That's the identity that student Weir ended up with; it wasn't her choice, just the luck of the draw. She's pretending to earn good money, $82,000 a year. But in order to complete <a href="http://www.ja.org/programs/programs_mid_park_mobile.shtml">the program at Finance Park</a>, she still has to walk around to the furniture store, the supermarket, and get a home loan from the bank. She must do all that and more without going over budget before she checks out in the afternoon.</p><p>That won't be easy since she, like most of these students, is obsessed with one thing:</p><p>"I'm buying a really expensive car," Weir says. "I have to pay almost $2,000 for it each month."</p><p>As they go from storefront to storefront, students are reminded over and over to save, be thrifty, don't overspend. But that doesn't stop the fantasies. In fact, the brush with adulthood just seems to whet their appetites.</p><p>One students stares at a computer screen that offers him a choice of cars. Or rather, a choice of VWs, since the German carmaker is the corporate car sponsor in this Finance Park. He muses, "I wish I could buy a Lamborghini."</p><p>Well, you can't, because if you don't keep your budget in the black, you'll be sent back to go, and you won't get $200.</p><p>Further down "Ernst and Young Avenue," volunteers in another storefront try to help students sort through the same array of TV/phone/Internet bundles that drive average adults insane.</p><p>The Verizon Store looks like the real thing, thanks to the self-interested generosity of the corporate sponsors who teamed with Junior Achievement, a nonprofit group that helps educate young people about the world of business.</p><p>If all that makes this place seem like a product placement laboratory, that's part of the idea, says Kristen Charnock, who teaches physics at Washington Irving Middle School.</p><p>"I think it brings some reality to it," she says. "It's nice that they've designed the storefronts to make it look authentic."</p><p>And as grownups know, budgeting is not just a math exercise. David van Vleet of the Fairfax County Schools says the point of places like Finance Park is to teach good decision-making.</p><p>"These concepts are taught in civics classes," he says. "We teach taxes in mathematics courses. So they have these concepts that they are learning in school, but they need to see the practicality of those."</p><p><strong>Being An Adult Can Be Un-fun. Who Knew?</strong></p><p>Many of these students say they had no idea how tough it is for their parents to keep their suburban lifestyles on track.</p><p>Student Lauren Katington says when finances come up at her house, "they tell me to go out of the room." But Katington says she would rather not know about her parents' financial struggles "because then I would feel bad for, like, asking for things."</p><p>Which raises an important point: if this stuff is so important, do parents need to share more, and discuss it at home?</p><p>Most kids told me they had fun in Finance Park, although much of the experience stresses how un-fun it is to be an adult — how you can be earning good money and still be broke.</p><p>Of course, Finance Park is not reality — students are cut a lot of slack here. They only have to choose between baskets of food, not between hundreds of items with confusing food nutrition labels. They do not face the credit card hucksters and used car dealers who will prey on them later in life.</p><p>Here, if they enter the checkout line and find they screwed up their budget, the kindly checkout clerk, one of the teachers, can rejigger the numbers, and make it all better.</p><p>There is some research indicating this kind of thing works, that students come out of this process better prepared to spend and save smarter. The question is: Will it stop them from buying into the next real estate bubble, or from blowing their savings on a Lamborghini?</p><p><em><br /></em> Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1305614531?&gn=Monkey+Bars+No+More%3A+Trying+The+Money+Playground&ev=event2&ch=136275928&h1=Money+Counts%3A+Young+Adults+And+Financial+Literacy,Around+the+Nation,Your+Money,Education,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=136363695&c7=1013&v7=D%3Dc7&c18=1013&v18=D%3Dc18&c19=20110517&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=3&v21=D%3Dc2&c31=136275928&v31=D%3Dc31&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></p></p> Mon, 16 May 2011 23:01:00 -0500 http://www.wbez.org/story/2011-05-16/monkey-bars-no-more-trying-money-playground-86633 College students navigate financial life http://www.wbez.org/story/2011-05-15/college-students-navigate-financial-life-86578 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-May/2011-05-17/Columbia College_flickr_cgulyas2002.JPG" alt="" /><p><p><em>Part of a <a href="http://www.npr.org/series/136275928/money-counts-young-adults-and-financial-literacy">series</a> on young people and financial literacy</em></p><p>For many high school and college seniors, graduation is a time of new beginnings and harsh realities. Their thoughts are turning to money — for tuition, rent, and credit card bills. Three Illinois students have already made decisions about debt and finances that will be with them for years to come.</p><p><strong>Depending On School Loans</strong></p><p>Brandon Smith, 24, is a journalism student who started school at a community college in Ohio, transferred to a four-year Ohio university, then moved to Chicago, where he now attends Columbia College. In all, it's meant six years in school. For the past couple of months, Smith has worked part time at a downtown Chicago sandwich shop. "I'm a barrista, cashier, a prep cook, and I work in catering," he says.</p><p>Although he's worked some of the time to finance college, Smith depends mostly on government and private loans.</p><p>"I watch the interest rates on the loans I take out," he says. "But it's not like I have an option. If a student loan company wants to give me a loan at 10 percent and there isn't any other company that gives me a loan, I take it at 10 percent."</p><p>Smith says he didn't learn much in school about personal finance. At home, the emphasis was on minimizing debt. But when it came to education, the message was get the best you can and a good job will follow — pay the loans off later. After recently checking his credit report, Smith found out he's mired in student loan debt. "It's sitting at [$98,000]," he says. "By the time I pay it off it will be much more than that."</p><p>Smith doesn't know what it will take to pay it off. He says, "I have no idea what the future holds and that's scary."</p><p><strong>Starting To Budget</strong></p><p>Another student, Brittany Langmeyer of Indiana, just graduated from Loyola University in Chicago. The 23-year-old is a double major in theater and journalism and a double minor in political science and dance.</p><p>This past school year, she lived off campus with three roommates — all of them penny pinchers.</p><p>Langmeyer says she learned how to keep utility costs low after she boosted the heat during cold winter nights and was shocked by the subsequent bill. She and her roommates work to keep each other in line. "We talk about 'OK, we can't go out this weekend because we went out last weekend and we already spent that money," she says. "Or 'let's cook pasta and share it' or 'you buy this and I'll buy that and we'll eat that for the next two days.'"</p><p>Yet Langmeyer only recently started to budget, and she'll leave college deep in debt. Her mix of private and federal school loans totals between $60,000 and $70,000. Plus, her father took out about $50,000 in loans on her behalf.</p><p>"My mom has always said, 'You know Brittany, paying a student loan is a way of life, just get used to it. Don't hinder yourself because of money,'" she says.</p><p>Langmeyer hasn't figured out how many years it will take to pay off her portion of the debt. She plans to work that out with her father. But she says she didn't begin thinking about the consequences of her finances until late in the game. "I feel like I started to be concerned about, 'Oh my gosh, I need to pay these loans,'" she says. "How many loans do I have...and I don't know why I never took more interest in it early on. I think it made me nervous."</p><p><strong>Learning The Basics</strong></p><p>At Bradley University in Peoria, Ill., 20-year-old Skyy Calice lives with three of her sorority sisters in a house off campus. She says as a freshman, she relied heavily on her parents for money.</p><p>"I would spend any money that I made on my own...on what I wanted to and I would go back to them and say, 'Oh, I need this for a book' or 'I need this' and they were OK with that," she says.</p><p>But Calice says when she decided to move off campus her junior year, her parents said she was on her own. "I had to get my act together financially," she says.</p><p>Calice is a double major in criminal justice and sociology. She says when it comes to finances, she knows the basics. Living on her own has taught her to budget, but she has made some missteps.</p><p>"I actually got caught up spending a little too much—doing a little extra shopping when I should have been paying bills," she says. "But I've never been in any serious financial trouble. I've never had any credit cards just because you know I don't want to take that path."</p><p>At this point, Calice says her school loans are enough to think about. She's received $24,000 in scholarships and grants each year and funded the rest of her education through loans. Her loan debt when she graduates this December will be slightly more than $30,000.</p><p>Calice doesn't think that's so bad. "I talked to other people—their loans are that in one year," she says. "So I'm really not excited about paying them back, but I'm glad that it was such a low number."</p><p>And while dreading the loan payback, Calice says she'll manage. She's has a job now at a juvenile detention center and later plans to become a police officer. Copyright 2011 National Public Radio. </p> Sun, 15 May 2011 23:01:00 -0500 http://www.wbez.org/story/2011-05-15/college-students-navigate-financial-life-86578 Money Counts: A Series For The Financially Young http://www.wbez.org/story/2011-05-15/money-counts-series-financially-young-86559 <p><p>The young people set to graduate this spring will soon be facing adult financial responsibilities, like earning paychecks, paying bills and managing their debts.</p><p>But many of these graduates already have advanced degrees from the School of Hard Knocks. Over the past four years, the Class of 2011 has lived through the nation's toughest economic period since the Great Depression of the 1930s.</p><p>Many students have watched their parents lose jobs — and even homes. Now it's time for this next generation to begin building a better financial foundation for themselves.</p><p>It won't be easy for many to get started; student loan debt now surpasses all credit card debt in this country. On the other hand, young Americans have access to better tools for tracking their money, from electronic spreadsheets to budgeting Web sites to mobile banking options.</p><p>In addition, many school districts are offering classes in financial literacy. For example, high school teachers and volunteers are trying to help teenagers understand the complex bills sent out by telecom companies offering "bundles" for TV-phone-internet service. But these bundled bills can be so confusing that consumers can't comparison shop for good deals.</p><p>Improving financial literacy — the ability to understand bills and financial statements — is an important step that can help young people avoid the mistakes of their parents' generation.</p><p>This week on <em>Morning Edition</em>, NPR will be airing <em>Money Counts: Young Adults And Financial Literacy</em>, a five-day series examining the relationship between young people and their finances. Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1305464460?&gn=Money+Counts%3A+A+Series+For+The+Financially+Young&ev=event2&ch=136275928&h1=Money+Counts%3A+Young+Adults+And+Financial+Literacy,Around+the+Nation,Your+Money,Economy,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=136328030&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110515&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=10&v21=D%3Dc2&c31=136275928&v31=D%3Dc31&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></p></p> Sun, 15 May 2011 07:17:00 -0500 http://www.wbez.org/story/2011-05-15/money-counts-series-financially-young-86559 SEC Requests More Money To Fight Fraud http://www.wbez.org/story/2011-05-14/sec-requests-more-money-fight-fraud-86551 <p><p>Last July, when President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, he promised greater oversight power to the agencies tasked with keeping watch over the nation's financial markets.</p><p>"These reforms represent the strongest consumer financial protections in history," he said.</p><p>Many of those protections were to come from the Securities and Exchange Commission in the form of new authority over derivatives markets, hedge funds and credit-rating agencies.</p><p>"We were tasked with writing about 100 new rules and writing 20 studies," SEC Chairman Mary Schapiro tells Guy Raz, host of weekends on <em>All Things Considered</em>.</p><p>The agency is funded through this fiscal year. But last week, Schapiro told Congress she simply won't have enough money next year to implement the reforms spelled out in the law. She's asking Congress for more than $200 million, bringing the SEC's total budget to $1.4 billion.</p><p><strong>More Manpower </strong></p><p>Right now, Schapiro says, the SEC employs about 12 analysts for every $1 trillion in assets it manages. Six years ago that ratio was 19 for every $1 trillion, and trade volume has doubled since.</p><p>"That's just not good enough," she says.</p><p>The agency is hoping to add up to 500 new employees to a staff that currently has around 3,800 employees. Schapiro says she'll hold off on significant hiring until she's sure the SEC can afford it.</p><p>Even then, many of those new hires could be former Wall Street analysts, and one former SEC head <a href="http://www.reuters.com/article/2011/05/14/us-allenstanford-sec-idUSTRE74C0M520110514">is under investigation</a> for allegedly protecting the leader of a $7 billion Ponzi scheme in 2009.</p><p>Are the wolves guarding the henhouse?</p><p>"I don't think so," Schapiro says. "My experience has been that the people who join us from Wall Street are among the most aggressive and dogged about pursuing fraud or products that create threats for the public."</p><p>Schapiro says in her two years with the SEC, the agency has been very transparent about where it has not done "the kind of job that the American people have a right to expect of us."</p><p><strong>Watchdogs On Megabus</strong></p><p>Things could be worse for the SEC.</p><p>Members of the Commodity Futures Trading Commission — which was created by the Dodd-Frank Act — <a href="http://dealbook.nytimes.com/2011/05/03/u-s-regulators-face-budget-pinch-as-mandates-widen/">reportedly had to take the low-cost bus service Megabus</a> to New York to save that agency $1,000 on train tickets.</p><p>"I don't know that we sent anybody on the Megabus," Schapiro says. But the agency did restrict travel "very significantly," including for examiners to spend time in the field.</p><p>There have also been reports of the agency cutting back on office supplies.</p><p>In the midst of such tough times, the agency was "unfortunately not able to pursue all the tips and complaints that we received," Schapiro says, "and we were suspending some of our technology development, which is absolutely critical to our ability to oversee and regulate the stock markets."</p><p><strong>An Issue Of Trust</strong></p><p>Members of Congress opposed to additional funding for the SEC have argued the agency that stood by while Wall Street traders wrecked the economy doesn't exactly deserve a raise.</p><p>But the SEC, Schapiro argues, is still a good investment because it's effectively deficit neutral. The agency offsets its budget with fees assessed against the financial services industry.</p><p>"We just adjust transaction fees to meet whatever the appropriations is Congress gives us," she says.</p><p>And last year the agency returned $2.2 billion to investors who had been cheated and defrauded. It did so, Schaprio says, with a budget of $1.1 billion.</p><p>"So we're a pretty good deal."</p><p>The answer to the budget problem, she says, "can't be to fund the agency less or to not give it the tools it needs to do the better job that I think everybody would like to see us do." Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1305407826?&gn=SEC+Requests+More+Money+To+Fight+Fraud&ev=event2&ch=1018&h1=Your+Money,Economy,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=136308414&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110514&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=2&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></p></p> Sat, 14 May 2011 15:35:00 -0500 http://www.wbez.org/story/2011-05-14/sec-requests-more-money-fight-fraud-86551 Banks, Retailers In Lobbying Race Over Debit Fees http://www.wbez.org/story/2011-05-09/banks-retailers-lobbying-race-over-debit-fees-86294 <img typeof="foaf:Image" src="http://llnw.wbez.org/0" alt="" /><p><p>The financial regulation overhaul passed last year created a new agency to protect consumers and promised sweeping changes for everything from Wall Street investment firms to Main Street banks. But a relatively small provision — added as an amendment late in the process — is now at the center of a massive lobbying effort pitting retailers against banks.</p><p>This is a multibillion-dollar fight about who should bear the cost when you swipe your debit card to buy a bag of Skittles, a cup of coffee or a television.</p><p>Right now, the retailer pays a charge to your bank and either Visa or Mastercard. Hidden to consumers, it's called an interchange fee. Nationwide, these fees cost retailers about $16 billion a year. But thanks to the financial overhaul legislation, costs to retailers are about to go down.</p><p>Banks and card companies Visa and MasterCard are poised to lose billions. So, they're pushing legislation to delay the start of the new rule.</p><p>"Congress is going to decide who's going to win. Is it a big business or the biggest business?" says Paul Blumenthal, senior writer at the Sunlight Foundation, an open-government group.</p><p>He's watching this fight closely. On one side, you've got Wal-Mart, Home Depot, Amazon and the convenience store on the corner. And on the other, you've got Visa, MasterCard, Wells Fargo and the credit union down the block.</p><p>"Senators and congressman see this as the premier lobbying issue at the moment," Blumenthal says. "This seems to be the one that sticks out as the one that they're being lobbied on the most."</p><p><strong>Lobbying Efforts Intensify</strong></p><p><strong> </strong></p><p>There's a huge amount of money being spent, but it's hard to get a read on just how much. In the first quarter of this year, the coalitions for the retailers and the banks spent a combined $340,000 on lobbying. But it's not just the coalitions. Individual retailers, individual banks and all their trade associations are lobbying on this, too.</p><p>Then there are the ads — even on the subway in Washington, D.C. One reads: "Washington is helping giant retailers clean out your wallet."</p><p>Trish Wexler, a spokeswoman for the Electronic Payments Coalition, the group of banks and credit unions behind the ads,says they have ads running on about 100 railcars.</p><p>"When you talk about it in terms like interchange fees, or merchant discount fee, you know, we kind of tune it out as average Americans," she says. "My job was to make sure that people understood that this means that our debit card is going to end up costing us more as a result."</p><p>The banks and credit unions say that if the rule goes through and they lose $12 billion a year in interchange fees, they're going to have to raise fees, slash rewards or stop issuing debit cards altogether. Retailers have said consumers will end up paying the extra costs. Both sides say if the other guys win, consumers lose.</p><p><strong>Dueling Business Interests</strong></p><p><em> </em>Both the banks and the retailers say they have the little guys on their side.</p><p>"We've had over 250,000 of our members contact their representatives in Washington, just in the last month," says Bill Cheney, president of the Credit Union National Association.</p><p>Retailers are calling and writing their members of Congress, too, asking that they let the rule go into effect as planned.</p><p>"We already worked on this one, we already figured that this isn't fair," says Tariq Hussein, a 7-Eleven franchisee in Washington, D.C. "Why reopen now? What happened?"</p><p>What happened is that $12 billion is a lot of money. If Congress doesn't act, which is entirely possible, then the new rule will take effect July 21. And sometime after that, maybe we'll learn how consumers came out. Copyright 2011 National Public Radio. To see more, visit <a href="http://www.npr.org/">http://www.npr.org/</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1305011231?&gn=Banks%2C+Retailers+In+Lobbying+Race+Over+Debit+Fees&ev=event2&ch=1018&h1=Around+the+Nation,Your+Money,Business,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=136147726&c7=1018&v7=D%3Dc7&c18=1018&v18=D%3Dc18&c19=20110510&v19=D%3Dc19&c20=1&v20=D%3Dc20&c21=3&v21=D%3Dc2&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></p></p> Mon, 09 May 2011 23:01:00 -0500 http://www.wbez.org/story/2011-05-09/banks-retailers-lobbying-race-over-debit-fees-86294