IQ

November 2007

How do you pay for everyday purchases or bills? Cash? Check? Credit Card? Debit Card? If you are like most people, you use a combination of these methods—and more. The advent and growth of electronic banking has encouraged many people to move more and more from paper (cash, checks) to plastic (credit cards, debit cards). All these payment methods have roles to play in personal financial management today.

October 2007

The housing market has been much in the news recently. After years of steadily rising home values, the market has cooled. In many areas home values have leveled off; and in some areas, home values are actually going down. At the same time, a record number of home foreclosures have been reported to date in 2007. The press is full of news about rising default rates, particularly for “subprime” mortgages.

As some of the heavily marketed “creative” financing products such as Option Adjustable Rate Mortgages (ARMs) “reset,” many homeowners face suddenly higher monthly payments that they can no longer afford. The impact has unsettled the housing and mortgage markets.

September 2007

eBay has become the gorilla of vehicles sales virtually overnight—they've facilitated over two million vehicle sales since starting their program. What's not to like about that?

A lot of things. Before you head to the eBay site even just to poke around, think about this:

• When you buy on eBay, you're typically buying "sight unseen."
• You usually don't get to drive the vehicle.
• You're typically buying from total strangers, and they are usually far away.

August 2007

Earn $500 to $1000 weekly in your spare time!

Earn $150 an hour on your home computer!

Have you seen ads like these? Tempting “come-ons” for work-at-home “businesses” are everywhere. For years, they’ve appeared on utility poles, in classified ads in newspapers, magazines, and freebie papers, and in direct mail flyers. Now they are showing up in web ads and spam emails. Who wouldn’t want to make a nice chunk of change for just a little work in their spare time? Have you been tempted?

Thousands of promoters of work-at-home schemes hope that you will be tempted—and that you will “act now” to send them a “few dollars” to find out more. But as the Federal Trade Commission (FTC) warns consumers, the only sure cash in these deals is usually the fees that consumers send to the promoters. The vast majority of work-at-home schemes promoted by such ads are misleading and most are also fraudulent.

July 2007

How much Americans save—or don’t save—has been in the news since the U.S. government’s report of leading economic indicators indicated that in 2005 the U.S. personal savings rate reached zero and dipped into negative figures. The U.S. personal savings rate since then has remained near zero or below it. Debate continues about whether the savings picture is actually so bleak because the calculation only looks at personal income and spending to determine the savings rate and doesn’t take into account income from investments or from possible increases (or decreases) in home equity. But even if the savings picture is a little rosier, commonsense says that as a nation of consumers we are probably not saving enough for a rainy day or more dire emergencies. And of course, there’s the question of saving toward something important, such as a down payment for a home or a fund for higher education or retirement.