Reading List for July 10-12

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Jul 10, 2020
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Current Events, Employment, Investing, Taxes

Income and Budgeting (pandemic-related)

  • A survey by Bankrate conducted in late June yielded some dire if not unexpected statistics about the impact of the pandemic on incomes.
    • 49% of those polled said the pandemic has negatively impacted their income.
    • Of those negatively impacted, only 17% were back to normal at the time of the survey, and 59% feel it will take longer than three months to recover.
    • 45% were not impacted.
  • This WSJ (subscription) article has lots of great statistics/graphs illustrating how much the pandemic has reshaped consumption of all types in the US, detailing the changes sector by sector. Food is a good example: 
  • A paper by economists at the University of Chicago and Notre Dame, and one out of Goldman Sachs, suggest that between the stimulus checks and the extra $600/week unemployment benefits, poverty may actually have decreased slightly in the early months of the pandemic. (The Economist) But it will be quite a while before data will confirm this. 
  • Survey by Apartment List suggests that 32% of households have not paid their July rent or mortgage in full. (CNBC)
  • Watch out Amazon, Walmart is launching Walmart+ to compete with Amazon Prime. (Vox)
     

Personal Finance

  • “Millennials share their best money lessons and advice.” (CNBC) I don’t think personal finance teachers would argue with these.

 

Careers/Unemployment

  • Elise Gould, senior economist at the Economic Policy Institute, looks at BLS data and compares the job market the class of 2020 faces, compared to those graduating in the Great Recession. The article also follows the experience of one first-gen college graduate. (MarketWatch)
  • First time unemployment claims dropped slightly to 1.3 million last week, and continuing claims, those filing claims for at least two weeks and a more useful indicator, dropped slightly to 18.1 million.   (The high was 25 million in May). Read about how states are grappling with the cost of this program. Additional $600 pandemic unemployment benefits, part of the Congress’ relief package, are set to end this month—stay tuned. (CNN)

 

Mortgages/Buying a House

  • Here is a follow up to last week’s article about historically low interest rates offering advice on how to decide if now is a good time to buy a house. (Forbes)

 

Managing Credit

  • The CFPB formally dropped plans to tighten regulations on payday lenders. (NYT-subscription) 
  • According to CNBC, 12 million lenders could be exposed to unaffordable payments:
    • “By eliminating the ability-to-repay protections, the CFPB is making a grave error that leaves the 12 million Americans who use payday loans every year exposed to unaffordable payments at annual interest rates that average nearly 400%,” says Alex Horowitz, senior research officer with Pew Charitable Trusts’ consumer finance project. 

 

Investing

  • Gold bugs are rejoicing. Have you been following the price of gold? (CNBC) Will it prove more reliable in the end than stocks, as bond yields plummet?
  • Schwab takes a detailed look at the performance of socially responsible investments (funds).
  • And from socially responsible investing to Robinhood, where the average Joe can get in way over his/her head trading –a cautionary tale. (NYT)

 

Taxes

  • I guess it was only a matter of time before Covid-19 hit the IRS, as in employees getting sick. The Union wants to shutdown the facility. (TaxNotes)
  • Corporate tax accountants have lots of questions about the PPP loan program.  Good thing they have some time to figure it out. (Forbes)
    • Will the expenses covered by the forgivable loan still be considered deductible expenses?
    • Will the forgiveness amount itself be a taxable event?This could get very interesting. 

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an M.B.A. in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducting student workshops, and developing finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.