The Black Friday Plan

The National Foundation for Credit Counseling Services doesn’t want to see Americans pile on more debt than they can or should reasonably handle during the holidays. So they distributed a list of tips to take buyer’s remorse out of the high holiday shopping season. If nothing else, I think black moms, and moms everywhere, ought to at least try to practice good money management. Take a look before you head out:

“It is important for consumers to shop with their head, not their heart,” said Gail Cunningham, spokesperson for the NFCC.  “Preparing in advance will help you stick to your budget, in spite of the decorations, carols and Santa himself beckoning you to spend.”

  • Beware of special credit card offers – Issuers are tempting consumers by offering incentives such as no interest balance transfers, extra perks by meeting certain spending levels, and increased cash back in specified categories.  However, no deal is a good deal if you can’t afford it.  Responsible shoppers will commit to spending no more than what they can repay in full when the bill arrives, regardless of how many bonuses are tacked on.
  • Know what you currently owe – Review all existing debt obligations, tallying what you’ve already spent and committed to repay.  This reality check may put a temporary damper on your holiday mood, but that’s better than digging the financial hole even deeper.
  • Create a plan – Knowing who you’re shopping for, what items you hope to find, and most importantly, how much you intend to spend is critical to a successful shopping day.  Commit in advance to stick to your plan, and enlist an accountability partner if necessary, as it is very easy to be caught up in the excitement of the moment and get off course.
  • Find the best deals at home – Shop from home before heading for the stores.  Compare prices online, as well as local circulars for sales in your area.  Be aware of time restrictions, as some prices may only apply during certain time periods throughout the day.  Once the actual shopping begins, going directly to the store which has your item at a good price will save you time, gas, money and frustration.
  • Remove all unnecessary cards from your wallet – Spreading purchases across multiple cards makes you feel as though you’re charging less and can trick you into overspending.  Designate one card for holiday spending, and remove all others from your wallet.  This will not only help you stay within your budget, but will also lessen the damage in case of loss or theft.

 

Update: The Kardashian Card Has Been Denied!

The Kardashian Kard was pulled off the market earlier this week, in a sign that some semblance of reason and decency exists in the American commercial markets today. Consumer advocates, faithful followers of business news, and parents who would eventually have to co-sign on their daughters’ future car purchases and education loans, breathed a huge sigh of relief. Gentle readers, you must recall that I found the hideous product to be nothing more than blatant financial entrapment, a road to ruined credit and financial slavery in the name of keeping up with a trio of silly wealthy sisters. Other consumer advocates were deeply concerned that the card’s terms would entrap financially unsophisticated consumers and the “unbanked” in situations that could cause huge financial problems down the road. My concern in all of this was, of course, the groups of young African-American women who might have fallen into either one of those two groups, and found themselves stuck in bad situations.

The card is gone. However, this doesn’t mean that all dangers of financial follies have passed. University National Bank, which issued the card, is still a chartered banking company. The Revenue Resource Group, LLC is also still around, as are other companies that also operate with shady tactics. I think I will go ahead with plans to sit down with Little Sister and explain the dangers of using cards like the one the Kardashians had offered. Also, all you other readers, the mothers, aunts and big sisters everywhere need to keep teaching the young women in your lives and talking to them about money. How to earn it honestly, respect it maturely, invest it patiently, save it diligently and spend it wisely. If they do all of this, they will be in control of money, instead of the other way around, and they’ll lead much healthier lives for it.

OT: Don’t Enslave Your Daughters to the Kardashian Card

Mindless celebrity worship and personal finance are two great obsessions in American society right now, and they’ve just had a disastrous run in with each other in the form of the prepaid Kardashian card. Whether you follow celebrity news and gossip devotedly or write about business and finance, like Hubby and me, you have heard of this abomination.

As you can tell, I think this venture into capitalism is a horrible idea. Perhaps the Kardashians and their handlers thought it would be a good business move to introduce the concept of credit and money management to youngsters in baby steps, offering college women, high schoolers—and worse, teens—a prepaid and presumably re-loadable card that they can use to buy downscale, Made in China, knock off goods. Let me tell you why Hubby and I think that the target market for these cards is very unlikely to keep up with the Kardashians if they get themselves roped into this shameful money grab.

The card is loaded with endless fees, as this report from CNNMoney.com explains:

While regular bank debit cards are typically free and don’t charge any fees, a 12-month Kardashian Kard costs $99.95 just to own, including a card purchase fee of $9.95 and 12 monthly fees of $7.95. After the first year, consumers must continue to pay the $7.95 monthly fee.

On top of these initial fees, it costs Kardashian Kard users $1 every time they add money to their card, and it costs $1.50 to speak with a live operator. If they want to pay their bills automatically using the card, they’ll be charged $2 per transaction.

The fee schedule on this thing violates many sound rules of good money conduct. If a youngster does not understand the inner workings of the card and wants to get someone on the line to explain it, why should that ring up a fee? Someone needs to explain the difference between the $99.95 ownership fee and the $7.95 monthly ripoff to hold the card after the first year. It gets worse:

“The cards are touted as safer than cash and easier than a regular bank account, but in the end it’s going to cost more than a bank account and there is more risk assumed,” the story quotes Gail Hillebrand, a senior attorney at Consumers Union as saying.

That’s because, like the new Kardashian MasterCard, prepaid cards are loaded with charges — including activation fees as high as $40, monthly fees of up to $10, paper statement fees of as much as $5.95, inactivity fees up to $9.95 and customer service fees as high as $3.95.

And most prepaid cards don’t offer the same protections as debit and credit cards.

If fraudulent charges appear on your account or your card is lost or stolen, you might not be able to get your money back. And because your card is not associated with a bank account, your money is also less likely to be FDIC insured, meaning that there is no guarantee you will get your money back if your card issuer fails.

The Kardashian sisters might as well have taken one of their hands, manicured while avoiding any useful work that might benefit anyone, and slapped their future groupies/slaves—sorry, let me use my marketing language, “guests”—across the face. It’s not enough that these women have a mindless TV show. Now they’ve turned to using their popularity to do little more than separate the working masses from their assets.

Think I’m joking? Who do you think is more likely to sign up for one of these rhinestone encrusted silver-plated handcuffs? Will it be the daughter of parents who are financially savvy and can sit down with her and work out why the math does not work, or a young girl who probably idolizes this trio and doesn’t have that kind of financial education at home?

“Prepaid card issuers started out by targeting the lower income and under-banked, and now we’re seeing the teen market and college market being targeting,” said Hillebrand.

Gentle readers, you don’t need to be savvy about politics and the debate about the widening wealth gap in this country. One plain and simple way to avoid your daughter accruing thousands of dollars in every fee imaginable and having her credit tarnished from an early age is to bypass this silliness. Why should the Kardashian sisters profit at the expense of the working and middle class? Let them get respectable employment, already.

It’s a great deal for the Kardashians, who get a significant cut of the fee revenue generated from the cards and get to extend their name recognition.

“None of these celebrities are going to get rich off of these cards — they’re already rich to begin with,” said Ron Shevlin, a senior analyst at Aite Group. “For the most part, this is an absolutely incredible publicity play.”

If a mailer for the card comes in the mail, shred it without even opening it. Otherwise if your daughter or sister signs up for the card, she will face a fee for not using it enough, and yet another punch in the gut (sorry, fee) for canceling the card.

Another ‘Black’ Trend Goes Mainstream

A few weeks ago the Pew Research Center came out with interesting data about married women and their earnings. Apparently, they’ve outpaced their husbands in terms of education and salary growth. That means we are earning more money at a faster pace than our beloved ones, even if the absolute numbers say we still earn less.

The underlying theme, of women gaining economic status in their marriages and presumably their households, did not surprise me. Among blacks, women have always been major contributors to the family finances. My mother was single while she raised me. Even during a brief five-year marriage, she ‘wore the pants’. She earned more money and had a better education than her husband. The same holds true for several aunts, cousins and friends. I told Hubby about my idea to write about this topic for my blog. As always, he downplayed the racial element, saying it’s not just a black experience. Lower-income white women, he said, have probably always contributed to the family’s finances. In a broader sense, all the new research really means is that we are all earning less money. The latter was his swipe at some of our country’s social and tax policies. Sensing a political skirmish, I shifted subjects: What should we make for dinner, dear?

The Pew Research Center’s findings on women bringing home the bacon is the second big trend in the black community that has gone mainstream, if you ask me. The first is single parenthood. I remember being a bit unique among my friends at church and school because my parents had never been married to each other, and my mother raised me without my father. Single parenthood used to be blamed for a host of social dysfunctions. As time passed, I’ve noticed that derogatory terms like “baby mama” or “baby daddy” have become so common that it’s no longer a big deal for children to be born out of wedlock. It really became acceptable as more middle-class and even upper-middle-class white women began raising kids without the man and the ring. I guess we have Murphy Brown to thank for some of that, huh?

I must admit that although I personally have no hang-ups about women with stable professions and finances choosing single parenthood, there are far too many single mothers in the black community. On any given day, I can look around my hometown and the city where I live now and see dozens of underaged girls pushing their kids around in strollers. They are kids themselves, so how can they possibly have enough wisdom to do a good job of nurturing and guiding the next generation of men and women? I don’t know. All I can do is try to prevent that travesty from happening in my family. So with my little sister, who will be 17 in March, I often tick off the only acceptable order in which her life’s milestones should come: degree, job, money in the bank, her own place and then she can have a baby!

Among the Pew Research Center’s other findings:
• Among adults aged 30 to 44 more women than men have college degrees.

• The median household income rose 60% between 1970 and 2007 for unmarried women, but increased by only 16% for unmarried men.

• In 1970, 20% of wives had more education than their husbands. In 2007, that figure went up to 28%.

For Richer or Poorer

The people at the National Marriage Project have released their annual State of our Unions report, which monitors the current state of marriage and family life in America. It’s a long report, so I didn’t have time to study the whole thing. But I did page through it, and found a few major tidbits:

• U.S. divorce rates in the country actually fell from 17.5 per 1,000 married women in 2007 to 16.9 per 1,000 married women in 2008 (after rising from 16.4 per 1,000 married women in 2005). This is not surprising, as I’ve seen at least a couple of articles in national newspapers say that fewer couples can afford to absorb the financial fallout of divorce, so more are staying together.

• Newlyweds who take on substantial consumer debt become less happy in their marriages over time. By contrast, new married couples who paid off any consumer debt they brought into their marriage or acquired early in their marriage had lower declines in their marital quality over time.

• Marriage serves more as a bond of companionship whose purpose is to satisfy emotional needs—instead of economic ones. So, marriage is less of a socioeconomic unit in today’s society.

The National Marriage Project  says it’s a non-partisan, non-sectarian group that aims to “provide research and analysis on the health of marriage in America, to analyze the social and cultural forces shaping contemporary marriage, and to identify strategies to increase marital quality and stability.” That sounds like a worthy endeavor to me, although I do have one suggestion for increasing marital quality and stability: tell a lot of these guys to be mature and considerate! Although the Latte Cafe is a non-political blog, I couldn’t resist pointing out some of their conclusions.

I have been married for five and a half years, and although my union is not a new one, Hubby and I have been together long enough to have learned a few important lessons about love and commitment. The first couple of years of our marriage were blemished by what I considered to be immaturity and insensitivity on Hubby’s part, and I’m sure there were many times when he thought I was uncompromising. Whatever the case, everyday life seems to be a lot better for us, as we’ve learned to put a house together, subvert our individual interests to promote the health of the household, and well, to appreciate each other more. I’m sure that a lot of the information in this report will affirm what we already know about marriage. There is nothing astounding, for instance, in the assertion that people get married these days more for companionship and less for economic reasons. But it’s nice to know that serious scholars are interested enough in the institution and to make a serious study of it. Marriages everywhere would be stronger if the individuals involved took the same approach to their relationships.

One Test We Cannot Afford to Fail

Ever since I got the typical trappings of middle-class, married life—the house, the cars and the kids—I’ve been more pre-occupied with money. How do I acquire enough of it to live comfortably while giving to charity, saving for various future expenses and investing? Apparently, there is a trade group out there that is interested in how much Americans know about money, and whether we are savvy enough to make the right moves concerning our finances. Judging by the results of their survey, we are way too ignorant on this subject. Read ’em and weep, folks.

Although the survey pool was controlled to represent all demographics in the United States, it got me to thinking about Black women in particular. More than any other group, I think, we need to be sharp about money matters. Most of us are single, and are raising children, too. Who’s going to be there to ensure that we enjoy comfortable and dignified retirement years?  I don’t know the answer to that. But I do know that before we can each craft our individual plans for the future, we need to know where we currently stand.

Americans Nearly Flunk Financial Literacy Test – FOXBusinesscom

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Reading, Writing and Dividends

MellodyHobsonI always like to hear what Mellody Hobson, the brilliant and photogenic president of Chicago-based Ariel Capital Management has to say about money. Mellody recently made a speech at a conference in San Francisco and I listened to part of it before going to bed. The running time is just short of 45 minutes. She’s right in suggesting that investing should be part of standard school curricula.  Between pay cuts, the scarcity of company-sponsored pension plans and the gradual replacement of formal healthcare plans with high-deductible health savings accounts, skyrocketing college costs, and the realities of retirement, middle- and upper-class Americans are going to have to shoulder more and more HUGE expenses. Which means that they will have to be very smart about money.

For Black women (78% of whom are single if you believe Oprah) an education, gainful employment and financial health are more imperative now than ever. And since a lot of Black women are unwilling to do what I did (marry a white guy) figuring it all out solo is going to be a reality. And that’s OK. No judgements either way. And let’s be honest: Not all married women will stay married. Life is unpredictable and any married woman could eventually find herself divorced or widowed. There are times, especially when Hubby is driving and he turns half-way around in his seat, eyes off the road, to talk to Baby or Little Sister in the back seat that I think I’ll be a widow. (It drives me crazy! And makes me think I need to shop for 20-year term life policies, just to make sure there’s enough money to get the baby through college.)

Start by listening to Mellody, if for no other reason than to get you thinking about where you stand in the whole ‘investing’ world. I remember watching one of Mellody’s segments on Good Morning America on one of my days off between Christmas and New Year’s and she was talking about the ten financial new year’s resolutions that we should all stick to. I didn’t abide my all her advice, much less remember them, but I did do one thing: save your raise. Take that percentage increase in your salary after your next performance review and bank it. If you are disciplined with your spending and diligent with putting the money away, you won’t even miss it. I tried it, eventually, and she was right! It helped that I had direct deposit and worked for cheapskate company that offered measly pay increases, more like cost of living adjustments (COLA) that were just slightly above the rate of inflation. So it’s not like I was getting 10% raises and had to turn around and force myself to save all that dough instead of vacationing or taking writing classes or getting a bigger apartment. My raises were small, and so the impact of my savings were small.

Invest the time in listening to Mellody’s speech, and maybe into reading the article, too. The story appeared in a first-rate pensions industry publication called Pensions & Investments. According to the research that she diligently dug up about our investing habits, we are not nearly as engaged in the investing process as we should be. But financial health is still attainable. The key: get started early and stick with it.

As for the Latte Cafe angle, the last I heard and saw, film director George Lucas was still sweet on Mellody and they were still an item. But first things first. Listen to her speech and think about whether you and your family need to make any changes in the way you invest and manage your money.

Listen To Michelle

I was really hoping that Michelle Matson (her Website, RichChick.com, has been added to the blog roll) would not pull a September Essence out of her stack of glossies hawking the latest trends in fashion and, of all things, investing. She is right: Our precious, hard-earned money is not supposed to be subject to the latest trendy scheme to accumulate wealth in “three easy steps” or whatever other jackrabbit form of money management people come up with. It takes time and discipline to become financially secure or attain wealth, and we all should adopt good habits to increase our chances. Maybe the financial tips inside Essence are actually sensible, manageable things that every woman can do to attain affluence and maybe wealth, and that’s why Matson overlooked it? At any rate, I was glad that Essence was not in the company of those monthlies that looked good, but had no substance beyond their surface beauty.

And yet the more that I think about it, Essence had no chance of being pulled out of Michelle Matson’s stack of September books. And it’s not because it is a black woman’s lifestyle magazine, but Essence has become, unfortunately, a bit staid in its coverage of our subculture. So it probably had no interesting covers or cover lines to grab her attention.

For at least a couple of years now, my interest in reading Essence magazine has plummeted. I know I haven’t aged out of its core demographic (its median age is 37, my exact age), but I suspect that ever since it was taken over by Time Inc., it has begun to spew out a lot of what I consider to be mainstream nonsense. The cover lines used to have a lot of impact, and the editors used to allow space on their covers from time to time for compelling, charismatic everyday women. Now, its a stream of actresses and singers, which is okay, but kind of dull, actually. And with cover lines like “#1 Sex Secret: Make Him Say Your Name” or “Be the Woman You Really Want to Be” (June 2007) or “Be the Woman You Want to Be: Your Health, Wealth and Sex Plan” (November 2009) I can barely tell one month from another. Half the time, I don’t even care. Especially not if I’ve read Vanity Fair’s latest slam on Bill Clinton,  Sarah Palin, or whoever.

I don’t expect black magazines to do those kinds of take downs, for several reasons. But continuing to deliver classy coverage of black women with uplifting messages, and doing it in an attractive and fun format, while being profitable, does not necessarily mean that Essence has to be boring. But I’m afraid that it kind of has become a bit of a snore. And that’s why I let my subscription expire last year. The covers and cover lines had stopped being compelling, daring, real reflections of me and the women I know. It now documents the lives of celebrities, for the most part (just like all the other money losers), and while it does advise us on how to dress, love, spend, etc., I still feel like something is missing.

That’s my two cents. Of course, considering that I have not opened an Essence in several months (except for a quick glance in the supermarket checkout aisle the other day) I could be wrong.

Another Recruit into the Hall of Shame

dancin-dancin1

This picture says so much about the times in which we live. A young professional guy, partying hard probably after having worked equally strenuously. The women are not dressed as professionally. And no, I won’t even count the one on the left, who absconded with some trader or investment banker’s shirt and tie. Perhaps they are just some arm candy along for the ride? Future trophy wives? Either way, it’s a scenario that represents excess and shallowness. That it appears on a Web site/blog dedicated to women dating investment bankers makes it so much more ridiculous. To the hall of shame with that blog, a thoroughly stupid waste of time and energy.

This Web site is a place where the gold diggers gather to talk about how the depressed mortgage finance market has affected their relationships with the men involved in that sector of investment banking. They whine about the disappearance of bottle service from their lives. Talk about having to cook at home and chop their own vegetables. One had the shamelessness to brag about being one banker’s mistress while having the freedom to tart around — I mean, date — with other bankers. Yes, readers, this Web site underscores how materialistic, banal and exhibitionist human beings can be. The incredible part is that the people who operate the blog invites these vapid airheads to air their grievances “free from the scrutiny of feminists”, and yet agreed to talk about the blog and the pseudo-support group meetings (yes, they meet over drinks to complain about fortunes lost) in The New York Times. Hey ladies, here’s one way to go about your business “free from the scrutiny of feminists”: don’t agree to be interviewed by The New York Times!!!

I know my friend Karl isn’t that way. Karl is as eligible as they come. Educated, gainfully employed, ambitious, handsome, nice build and very responsible. He owns his own home and is involved with the community around him. He works as a networking specialist for a financial firm headquartered in Manhattan’s financial district, a stone’s throw from the New York Stock Exchange. Aside from his day job, Karl is an avid trader—currencies, securities, etc. The only day he doesn’t work is probably Saturday, the one day when no exchanges are open anywhere on Earth. (If it’s Sunday, please excuse my error. I think the Asian exchanges are open on our Sunday, their Monday morning.) Karl is any woman’s Ideal Black Man, or IBM. Anyway, Karl doesn’t want any romantic entanglements right now, because he’s wary of gold diggers taking all his money. I told him that was silly, because a guy like him was too smart to get involved with a bimbo who wants him to subsidize her extravagances. And anyway, that’s why we have pre-nups!  (Don’t tell him I said this, but Karl’s a bit of a grouch, who probably wouldn’t notice if the right woman came along because he’s busy thinking about the next trading session. Or complaining.)

Seriously, if I were a guy and was as keenly aware as Karl is of the fortune hunters out there, I’d have some pretty firm rules in place for dating as well! Pick up the tab every now and then, sister!

Here’s a funny story about him: Karl is also a neighbor. I invited him to our house for a cookout and a much-needed break from staring at charts, indices and other trading-related material. He pulled his black Mercedes into our driveway, and before I could put a plate in his hand, my cousin Madelyn (Mary’s daughter) pounced! She started talking about a single friend of hers whom he needed to meet. I blushed! Right after I shushed her.

So I understand why some black women get exasperated from time to time at the sight of this reveler about to plunk his millions down for a woman who can’t tell the difference between a pot and a pan, while sober-minded guys like Karl choose to stay out of the game altogether.