Why Are So Many Of Us Living Paycheck To Paycheck?

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Survey Suggests Economic Overconfidence

If the economy is so great and unemployment is so low, why do so many Americans live paycheck to paycheck? And why don’t we seem to care?

The February PYMNTS.com Financial Invisibles Report attempts to answer these questions, noting, “For three consecutive quarters, consumers have been optimistic about their financial futures – even while slipping further into debt.”

Results from the corresponding Q3 2018 survey suggest that we’re relying too much on credit – giving us false confidence in our financial outlook.

Overconfidence Rules

According to the survey, 38.8% of Americans thought they were in better financial standing compared to a year ago, with 43.3% saying they were in about the same financial shape – similar numbers to the first two quarters of 2018…

Government Shutdown Brings Mortgage Obstacles

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The Shutdown’s Housing Market Woes

It’s a great time to buy a home, and you’re ready. You’ve saved up a suitable down payment, found a home, and settled on a lender. As an added bonus, interest rates are at their lowest point in the last nine months – despite the Federal Reserve’s interest rate hikes.

There’s only one problem. The government shutdown has created obstacles to your mortgage – maybe in ways you hadn’t considered.

Loan Roadblocks

The shutdown effect is obvious if you’re a government worker suddenly trying to buy a home with IOU’s – but, otherwise, why would your mortgage application be affected? It may depend on the type of loan you’re seeking.

USDA loans, popular in rural areas, are backed by the U.S. Department of Agriculture. With the USDA shut down (at least as of this writing), no new applications are being accepted and scheduled loan closings have been put on hold. Homebuyers caught in the middle are be…

Scary Financial Facts

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Are you ready for some Halloween horror stories? Forget Freddy Krueger, Jason Voorhees, or Michael Myers – we’ve got something really scary for you. Those three famous horror movie characters can’t compete with these three real-life financial horrors.

The Debt’s Coming from Inside the House! Get Out Now! – America’s national debt has topped a staggering $21.6 trillion – but your main concern is your own household debt. Unfortunately, America’s household finances aren’t in much better shape.

According to the New York Federal Reserve’s Q2 2018 Household Debt and Credit Report, aggregate household debt is $13.29 trillion – the highest collective debt ever. Household debt has been rising for the last sixteen quarters. Outstanding student loans alone have topped $1.5 trillion. Revolving debt – mostly credit card debt – hit $1.03 trillion.

Out-of-control spending can crush your finances. To prevent spending binges,

Data Breaches Continue – Protect Yourself

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Another Day, Another Breach

Have we reached the point where Americans react to data breaches with a yawn? Given the constant stream of new attacks and the staggering number of accounts involved, that’s an understandable reaction.

The sportswear retailer Adidas recently joined the list of companies successfully attacked by hackers. The size of the data breach isn’t fully determined as of this writing, but an Adidas spokesperson estimated that “a few million” consumers who purchased products through the company’s U.S. website could be affected.

So far, the breach involves contact information and usernames, along with encrypted passwords – but not credit card information or any personal information regarding health and fitness.

Adidas joins a long list of corporations hit by data breaches over the last few years, including Delta Air Lines, Sears, Boeing, Under Armour, Panera Bread, Hudson’s Bay Company, and Best Buy. Hackers have…

Home Prices Outpace Pay Increases

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Affordable Housing? What Affordable Housing?

Affordable housing is increasingly hard to find in today’s market. According to data from Trulia, America’s inventory of starter homes has decreased by almost half compared to six years ago while prices rose by almost 58%.

As consumers recovered from the housing crisis and Great Recession, more people became financially able to own a home. The existing supply was quickly consumed, leading to the current imbalance.

Recent polls suggest that affordable housing woes will continue through 2018 and beyond. According to a Reuters poll of property market analysts, home prices are expected to increase at almost double the rate of wages through 2018. Home prices are predicted to gain 5.7% more over the course of the year, while average annual earnings growth is predicted to be 2.8% – slightly above the predicted inflation rate of 2.5%.

At least inflation is expected to stay more in line with wages, hel…

Lenders Pulling Back on New Subprime Loans

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It’s tough living on the lower end of the credit score scale. If you have a credit score below 640 or so, you are generally given “subprime” lending offers for any form of credit that you request. From credit cards to auto loans and mortgages, you will be hit with higher interest rates and potentially other restrictions and fees.

According to credit bureau TransUnion’s Q2 2017 Industry Insights Report, you now have another problem to deal with – difficulty in getting credit at all.

TransUnion found that overall originations for subprime consumer credit have dropped sharply over the past four quarters. Total subprime originations dropped from a post-crisis peak of just under 6 million consumers in Q2 2016 to just under 4.6 million in Q1 2017. The last two quarters represent the first consecutive year-over-year decreases in overall subprime ori…

Trump and Bankruptcy

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Unless you have been in an isolation tank for some time, you know that Donald Trump is running for President of the United States. He of the iconic hair is particularly sensitive to discussions about bankruptcy, as his operations have declared bankruptcy multiple times. While the Donald may not like it, it’s fair to ask how a man who wants to be President can tout his business acumen and ability to straighten out the country while having filed for bankruptcy not once or twice, but several times.

Here’s why the question annoys the Donald: Donald Trump has never filed for personal bankruptcy. However, his operations have filed for Chapter 11 bankruptcy four times between 1991 and 2009. There is a distinct difference.

As opposed to the Chapter 7 liquidation bankruptcies generally used by individuals, Chapter 11 bankruptcy allows large corporations to stay in business while reorganizi…