Credit 
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WIN: Debt Figures Are Amazing

$962 B in Revolving Consumer DebtAccording to the Federal Reserve, report in a NYTimes article, Americans have nearly a trillion dollars of revolving debt (which includes credit card debt). That’s a lot of debt… oh yeah, total consumer debt is $2.57 trillion. Amazing right?



Capital One Total Compensation Those are two really big numbers huh? Well, if you were John Adams Kansas, President – Banking of Capital One Financial Corp., then that top number would be your total compensation package for 2007. If you were Richard D. Fairbank, Chairman, President and CEO of Capital One Financial Corp., then that bottom number would be your total compensation for 2007. In fact, if you were Richard D. Fairbank, you’d probably be upset about your number because it’s 45.5% less than what you got in 2006, which was nearly $37.5 million dollars.

Before people get all upset that they’re making so much money, their salaries are $0. Their bonuses are $0. It’s all in stock. I’m not pointing their salaries because I think it’s excessive, though they might be, I wanted to point out how ridiculous those numbers are. (Data taken from the July 2008 issue of Cards & Payments)



$286,000 in DebtThis is the most amazing debt story I’ve ever heard. When the story starts, Diane McLeod tells us that she has $286,000 in debt. Her story is one of misstep after misstep, from rolling her credit card debt (~$25k) into an adjustable rate mortgage ($10k in fees, plus it adjusted) to raiding her 401(k) (which cost $3k in taxes, paid in credit cards). Along the way, she was given shoddy advice from people with their own interests in mind. I’m not absolving her of responsibility but someone had to extend her this credit. She’s not drowning in debt, she’s halfway to the center of the Earth.



Average Number of Credit Cards per Household: 13 This figure is again from the New York Times series The Debt Trap (click on Start and then the lifetime link). The average household has thirteen credit cards. 40% of households carry a credit card balance. While having 13 cards doesn’t mean you’ll use them all, you can’t escape the 40% figure… especially when you couple it with that first number.

Guns won’t bring down America, debt will.


 Personal Finance 
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Talking About Salary with Friends

This past weekend I was in a New York Times story about young professionals sharing their salaries with their friends. In it, I was quoted about how I knew the salaries of my friends within a $10,000 spread (I had said about $5k either way) and that we openly discussed our salaries, raises, and other financial details. I was glad the article captured the most important point I was trying to make, not focusing on the fact that we were disclosing a taboo number, which was that sharing information helps everyone involved. The point of knowing my friends’ salaries wasn’t so that we could compare bank accounts, it was so that we would be armed with the most and best information possible to make decisions.

There is only one reason why we all would discuss our salaries and it’s the same exactly reason why people turn to Salary.com. We want to know if we’re getting paid a fair sum for the work we are doing. I knew what my engineering friends earned in a year and I knew the differentials for level of education and area of expertise and the point of knowing was so I could be better educated about my potential value in the workforce. When my friends left, they would disclose the raises they’d be getting to go to another firm. I disclosed how much more I was being paid. For me, it was about learning, with real life data points, what was out there and how I could use it to my advantage.

It’s important to note that we were all in the same field, working for the same employer. There wasn’t a situation of high school friends where life decisions led one to a more lucrative profession or another to a less lucrative one. I don’t see the point in a lawyer sharing a salary with an engineer or a financial analyst sharing her salary with an administrative assistant. Since you’re not in the same industry, that’s not information you can use. In fact, I don’t discuss salaries with my high school friends, or friends in other industries, because it provides no added value (and because it never comes up).

“This is a generation that is much more attuned to teamwork, collaboration and sharing information.” – that’s a quote from the article and one that I feel captures what my friends were trying to do. One prime example of this was that every single year, management would tell employees that “raises weren’t going to be good this year.” By sharing information, we could figure out whether management was feeding us a line or if raises were really not good (it was a defense contractor and we’re spending billions upon billions on defense, plus executives are getting ridiculous bonuses… not everyone’s raise is bad!).

Lastly, one surprising thing I learned in reading the article was that it is/was taboo to talk about how much someone paid for their house. I find that surprising because that is a matter of public record (all home sales and tax records are public), I consider it a much bigger affront to surreptitiously research someone on the internet than it is to come out and ask them. I paid $295,000 for my house. I know roughly (it’s not like I write it down so my memory fades) how much my friends have paid for their homes. It’s not a big deal. I suppose we never learned that talking about that was taboo, but then again the spread of information is valuable.

What do you all think? Salary talk is always taboo? Never taboo? Or are you like me, talking salaries isn’t taboo if there is information to be learned but taboo if it provides no such informational value?


 Personal Finance 
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How To Apply For Food Stamps

A recent New York Times article spotlighted how 28 million Americans may be receiving food stamps, the highest level since the start of the program in the 1960s, and I thought that, if eligible, it would be helpful to provide an understandable resource for folks so they knew how to apply. The USDA has a Food Stamp Program page but it’s not as clear about the application process.

Some statistics: the average monthly benefit was $86 per person and $200 per household in 2004. In 2005, the average gross monthly income per food stamp household was $648, so you get a good sense of who is eligible and who isn’t. To get a sense of what that means, if you were to extrapolate a per hour figure given full 52 week employment, $648 a month equates to $3.74 an hour if you work a 2080 hour year.

Determine Eligibility

The first step is to determine if you are eligible through the use of the FNS Food Stamp Program Eligibility Tool, which is strangely linked to an IP address. One word of advice about the tool, some states have special rules so the tool might say you’re not eligible but you might be eligible in your state. If the tool says you’re eligible, you’re in the clear. If not, contact your local food stamp office.

When you use the tool, it may send you to a state calculator or state food stamp website. For Maryland, it sent me to the Department of Human Resources homepage where I could access the Food Stamps eligibility tool (it’s a screening tool for all of the social services, including cash, medical, and temporary assistance). So, if you are re-routed to another tool, it’s best to go to your state tool to get the most accurate information.

If Eligible, Apply!

Since the tool is pretty quick, it’s best to check eligibility before you apply, though they say you can apply immediately. In Maryland, the application is estimated to take between twenty and forty-five minutes and is identical to applying in person. You might be wondering if you should apply for your state program or for the national program, it’s the same technically. The federal eligibility tool might have routed you to a state eligibility tool or it might have handled things itself, either way you need to apply at a state or county office. Each state will have its own form so you will need to find your local food stamp program office via their locator. After you find your office, it wouldn’t hurt to give them a call to clarify. It’s always tricky finding out how your local office, despite being an annex of a larger program, handles things; you’ll want to follow what the office says.

Some states will allow you to apply online, they are: Delaware, Florida, Indiana, Iowa, Kansas, Maryland, New Jersey, Massachusetts, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, West Virginia, Virginia, Washington, and Wisconsin.

Electronic Benefits Transfer Card

If you are certified to receive food stamp benefits, you’ll get an Electronic Benefits Transfer card (EBT card), a PIN, and instructions on how you can use it. You use it like a debit card and you can buy food and plants/seeds to grow food, and you can use it in any state, not just your own. You cannot use it to buy non-food items, alcohol, tobacco, vitamins, medicine, food to be eaten in the store, and hot foods. Some states still use paper coupons, though those are being phased out. If you lose your EBD card, call your state’s customer service number and they’ll reissue you one in 2-5 days.

If you have any more questions, the Food Stamp Program FAQ is quite comprehensive.


 The Home 
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Chores For Computer Time, Not Allowance

Here’s a clever idea I never thought about (mostly because I don’t have kids): Children perform chores in return for computer or video game time, not allowances. That’s the idea behind an article in the New York Times today in which children earn “screen time” as opposed to dollars and cents for good behavior.

I really like this idea because it’s a lot like carbon credits (please bear with me). So a company does something bad for the environment, like pumping more CO2 into the air, in order to offset that they can do something good, like planing more trees. Well, this is the same idea as earning “screen time” because playing video games is “bad” whereas studying, reading a book, doing chores, is “good.” You can even throw in wrinkles like trading your chores for screen time with siblings, sort of like a secondary market for screen time!

Now, some parents might say that chores should be part of one’s duties and children shouldn’t feel like they should be rewarded for the things they should be doing. It’s the same argument as not tying allowances with chores but if you can get over that then this is a pretty solid idea. It’ll be a few more years before we’ll have a chance to implement it but it’s always good to be prepared. :)


 General 
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Welcome New York Times Readers!

Welcome readers of New York Times and Damon Darlin’s article, Consumers Have Allies on the Web, where Blueprint for Financial Prosperity scored a mention near the tail end of the article. As Damon pointed out, I do give advice on a broad range of topics because I find myself, at this stage in my life, tackling a lot of financial issues at once – all of them get featured on the site. If you’re interested in car leases, compact fluorescent light bulbs, or credit card offers, you’ve come to the right place.

As Damon pointed out, I do have a fixation on taking advantage of credit cards because they have a fixation on taking advantage of you! Whether it’s a list of no fee 0% balance transfer or just scoring promotional gift cards for signing up to credit cards, I’m all about taking advantage their offers to earn a little back.

If you have any questions, feel free to send me an email (I love email!) and if what you see interests you, please consider subscribing to the feed (subscription buttons)!


 Personal Finance 
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Welcome New York Times Readers

I’d like to welcome all the visitors from the New York Times to my humble blog. As you may have read in the article by Elizabeth (scan of the print version, courtesy of Neville, also archived by a UMSL student or… resort to BugMeNot), this blog is about personal finance and I’ve tried to write in a way that someone clueless about money could understand. I would like to take this time to highlight some of my more interesting posts below, because sometimes they’re hard to find in the maze of archives:

All the tracking of my net worth is reported in this series of articles. I’m in no way trying to show off, which is why I didn’t add net worth until after a few months in at the request of some readers, but I’m just trying to show you how my financial decisions impact the big picture. Just as with anything online, take my numbers with a grain of salt because I could’ve miscalculated or my interpretation of net worth may be higher or lower than the consensus belief of what net worth should include.

Buying A Home – This is a journal, day by day, of how I went about buying my first (and only) home. It lists each article I wrote along with a little blurb as to what it’s about. It includes my thoughts from before I “hired” a buying agent to after I physically moved in. I think it’s pretty comprehensive, albeit long, but a good read for novice homebuyers. I learned a lot by writing it. I’ve also begun writing a series of articles, which I call a homebuying autopsy, where I review where I went wrong and what I could’ve improved.

Is AAA Worth It? – was and still is one of the most commented on articles I’ve ever written. I was debating whether or not to keep AAA service and lots of people weighed in. Despite all the positive comments (they were practically all in favor of keeping AAA), I went with the almighty dollar and nixed it.

The Beauty of Mutual Funds – One of my earlier articles, it’s the first one that ever had an external link to it from another blogger, JLP (a financial Planner in Texas) of AllThingsFinancial, who thought it was a good explanation of mutual funds. I also interviewed him (he’s a really friendly guy).

If you’d like to subscribe to the RSS Feed, you can do so with the buttons at the top right of the screen, and if you’d like to send me a personal message please feel free to use this contact form (I try to respond to messages within 24 hours). Thank you for visiting, enjoy your stay, and hope to see you back in the future!

[Oh, and if you're from HP, I could use a new laptop! :) ]


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