Half of Americans spend 50% or more of their income. And it’s affecting their health. Why are we maxed out every month? Two reasons: housing and volatile income streams. How do we fix it? Tech and tools aren’t enough. We need to remove the stigma associated with talking about money problems.
Are your investments in line with your concerns? Sustainable and responsible investing (SRI) grew by 33% last year, to $8.72 trillion. SRI was initially used by investors to avoid “sin stocks” (e.g. firearms, tobacco, oil). Today, SRI strategies are used pro-actively to invest in social, governance and environmental initiatives. There are many strategies to investing in SRI, from choosing individual companies to investing in funds and ETFs. First step: define what’s important to you.
Student loan debt is now higher than credit card debt… and the cost of college has increased 5 times the rate of inflation since 1983. Money being sucked dry by student loan payments is money being pulled from the economy, including home ownership. In short, the rising cost of education is changing the face of our economy.
Undergrad Stafford loans will increase from 3.86% to 4.45%. Grad school loans: increasing from 5.41% to 6%. Parent loans for education: increasing to 7% from 6.41%. While still cheaper than private loans, education gets more expensive for most Americans.
If you do it right, you could lower your interest rate AND increase your CIBIL score. Some tips to consider: don’t apply to the same bank holding your credit cards, don’t apply to multiple lenders, and make sure your credit is healthy.
Ever notice that your balance doesn’t decrease even though you religiously make payments on your credit cards? Merely paying the minimum payment on your credit card each month is exactly what the banks want you to do. Why? Because it makes them money! How can you make an impact? Increasing your minimum payment by even 1% can shear years off of being debt free and save you thousands.
Over 50% of Millennials want their investments to reflect their social and environmental values. Impact Investing is not a fad, it’s a long term trend. How can you get in? Start by deciding what is important to you. You may think you don’t have enough money to start investing, but this is erroneous. There are plenty of options available for you to dip your toe in the water and start investing with your heart.
Socially Responsible Investing (SRI) funds have already attracted more money in the first four months of 2017 than in all of 2015. The growth of SRI is a long-term trend. However, new investors should be skeptical about investing in broad environmentally, socially responsible and governance (ESG) funds. While a company may be doing wonderfully on one issue, it may be lacking on another. If you want to invest in your values, you’re better off focusing on a targeted issue, rather than a broad ESG fund. It’s easier to track the impacting performance of targeted options, and cheaper to get in as well.
An estimated 44 million are burdened by student loan debt. The class of 2016 has an average of over $35,000 outstanding that will take years to pay off. What can recent grads do to get an edge this debt? Get organized. Research government forgiveness programs and income driven repayment plans. Be wary of the initial “grace period,” the accrued interest will cost you later. Refinance, consolidate and accelerate your payoff. And above all, keep good records! Student loans are frequently sold to new servicers. Errors during account transfers are not uncommon. Learn to protect yourself.
Exactly how much of your monthly income should be used to pay your debts? The US Census Bureau states that households which spend 30% on debt are “cost burdened,” and 50% or more are “severely cost burdened.” The Consumer Financial Protection Bureau caps it at 43%. But Fannie Mae disagrees. As of June 29th, Fannie Mae’s underwriting software will approve loans for consumers with debt-to-income ratios as high as 50%. However, many financial experts warn that just because you can, doesn’t mean you should.