What I'm Reading This Weekend (June 9-10)
By Beth Tallman
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Jun 08, 2018
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Current Events, Parent Conversations, Retirement, Credit Reports, Investing, Mortgages
Parenting
The WSJ takes a good look at the overprotected American child. You probably see the impacts on the students you teach.
Michelle Singletary explains why parents should have “the talk” (about credit) with their kids.
Here are eight things parents can do to help their college students become financially independent.
And here is what you do if your adult children want to move home.
Education
The New York Times looks at education spending over time. (Hint: it...
Question of the Day: Do consumers struggle more with repaying mortgage debt or student loan debt?
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Jun 03, 2018
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Student Loans, Question of the Day, Paying for College, Mortgages
Answer Student loan debt. Student loans had a 10.7% delinquency rate (over 90 days past due) vs. mortgage debt which had a delinquency rate of 1.2% in 1Q 2018.
Questions:
What is the major difference between how a lender evaluates a consumer taking out a mortgage vs. how the government evaluates a student taking out a federal student loan?
What do you think happens if someone stops making payments on their mortgage? On their student loan?
Why do you think that more than 1 in...
What’s New With……Credit Management?
By Beth Tallman
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May 17, 2018
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Identity Theft, Credit Cards, Credit Scores, Credit Reports, Mortgages
This second quarter update deals mostly with credit cards and credit scores, but we touch on managing mortgages and financial infidelity.
Credit Cards/Score
Ever wonder what to do with that credit card you never use? There is not necessarily one answer for all situations.
Do you know exactly what happens when if you make a late credit card payment?
How about what happens when you don’t pay off your credit card balance in full?
This one might make you think twice about opening a joint...
What's New With.......Credit?
Nerdwallet research shows average household debt for 4Q17 increased slightly in every category but auto loans (see chart below*).
Peer-to-peer lending may not be as disruptive to credit markets as once thought.
Here is the lowdown on what higher interest rates will mean for borrowers.
Credit Cards
You might want to consider these tips to get your financial house in order before applying for a credit card.
Credit card companies and other lenders are facing increasing delinquencies and defaults...
Question of the Day: What percent of the U.S. population lives in markets where renting is more affordable than buying?
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Jan 17, 2018
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Budgeting, Mortgages, Research, Interactive, Question of the Day
Answer: 64%
Questions:
In what regions of the U.S. is it cheaper to rent than to buy? What do you think explains these regional differences?
If you could live in your dream city/state, which city would you live in? Would you rent or buy?
Millennials are “delaying purchasing [a home] for a median of seven years” according to MarketWatch. Why do you think explains this?
Do you have a desire to buy a house at some point in the future?
Here's the ready-to-go slides for...
Which ONE of these word choices in a loan application tip off banks that you may be a credit risk? 1) One year 2) Thank you 3) Promotion
Answer: Thank you
Fascinating research findings from Columbia Business School found that loan applications can tell quite a bit about a loan applicant [hat tip to Daniel Pink whose podcast had passing reference to this research]. Here's why word choice matters:
“When it comes to applying for a loan, everyone has a ‘tell,’” said Netzer. “Our findings suggest that similar to body language effects, people leave traces of their intentions, their financial and...
Question of the Day: What is the median sales price for existing homes in the U.S.?
Answer: $247,000 (as of October 2017)
From National Association of Realtors:
"The median existing-home price2 for all housing types in October was $247,000, up 5.5 percent from October 2016 ($234,100). October's price increase marks the 68th straight month of year-over-year gains.Total housing inventory3 at the end of October decreased 3.2 percent to 1.80 million existing homes available for sale, and is now 10.4 percent lower than a year ago (2.01 million) and has fallen...
Video: Suburbs and Cities: Why Do We Live Where We Do?
Hat tip to Big Picture blog who brought this well produced and engaging 10 minute video to my attention. It provides an historical perspective on how cities developed and the factors that determine where people live in in the U.S. compared to Europe. This would be a good supplement to your budgeting lesson as housing costs tend to be the largest expense so where you live is consequential:
Questions for students:
Why did cities in Europe develop differently than those in the U.S.?
Where do rich...
Question: How Much Debt Do Consumers Have?
By Tim Ranzetta
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Jan 15, 2017
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Chart of the Week, Mortgages, Question of the Day, Research, Credit Cards, Student Loans, Current Events
A great opener to your Types of Credit unit. Start by asking your students to rank from largest to smallest the various types of consumer debt:
Credit Cards
Mortgages
Auto Loans
Student Loans
—————-
Answer and visual below (from Visual Capitalist and Equifax): $12.4 trillion (as of August 2016)
Questions for your students:
Which of the loans above involve an asset that a lender can recover if you don’t pay your loan back?
Which loan type above involves...
Chart: How Do Debt Levels Differ By Age?
By Tim Ranzetta
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Dec 05, 2016
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Chart of the Week, Mortgages, Research, Credit Cards, Student Loans, Payment Types, Current Events
Here’s a meaty set of charts to include in your Types of Credit unit. I love it because it provides a more holistic view of the various types of debt that consumers have and how their balances vary over an adult’s life:
Hat tip to Sarah Tavel of Greylock Partners who included this chart in her excellent presentation “Saving people money.”
First, some orientation is in order.
The charts show various types of debt: mortgage, HELOC (home equity line of credit), student...
Chart: What's the Cost of Having A Low Credit Score?
By Tim Ranzetta
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Nov 21, 2016
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Chart of the Week, Credit Scores, Mortgages, Activity, Question of the Day, Research, Current Events, Activities
Answer: Tens of thousands of dollars when looking at long-term loans like mortgages.
Great chart recently released by myfico.com (hat tip Motley Fool) demonstrates how current interest rates on mortgages vary based on credit scores:
Here’s a quick mini-activity for students to see how much a low credit score could cost them:
Using this simple mortgage calculator, plug in the following assumptions:
Home value: $234,000 (median sales price in September 2016)
Interest rate: 3.248% (high...
Question: What's the Biggest Source Of Financial Stress (by State)?
By Tim Ranzetta
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Aug 24, 2016
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Chart of the Week, Mortgages, Credit Cards, Student Loans, Current Events
Here are the choices:
Paying my mortgage or rent
Lack of stable income
Paying for education
Not being able to retire
Not having enough money to fund an emergency
Wanting a nicer lifestyle
Paying off my debt
Envelope please…
Answer: Paying off Debt!
From GoBankingRates.com (click on this link to find details about your state):
Want to teach your students to use debt responsibly? Please check out the NGPF Unit on Types of Credit!
...
Chart: What Percentage of U.S. Households Own A Home?
By Tim Ranzetta
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Aug 01, 2016
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Chart of the Week, Mortgages, Behavioral Finance, Question of the Day, Purchase Decisions, Current Events
Answer: You have to go back to 1965 to find home ownership rates equal to today’s rate of 63%.
Questions for your students:
Do you want to own a home some day? Why or why not?
What’s an appropriate headline for this chart?
How many years did it take the housing bubble to inflate (trough to peak)? How many years has it been since the market peaked? Where do you think it will bottom out?
What explains the drop since 2006?
What tends to happen with homeownership rates during...
Are Farms and Homes A Good Investment Opportunity?
By Tim Ranzetta
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Jul 21, 2016
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Article, Mortgages, Question of the Day, Research, Investing, Current Events
Answer: Not so much.
From Nobel Prize winner Robert Shiller at New York Times:
Over the century from 1915 to 2015, though, the real value of American farmland (deflated by the Consumer Price Index) increased only 3.1 times, according to the Department of Agriculture. That comes to an average increase of only 1.1 percent a year — and with a growing population, that’s barely enough to keep per capita real land value unchanged.
According to my own data (relying on the S&P/Case-Shiller...
Let's Get Serious (or Not): Cartoons To Consider
By Tim Ranzetta
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Jul 05, 2016
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Cartoons, Mortgages, Behavioral Finance, Teaching Strategies, Advertising, Purchase Decisions, Current Events
Ran across a few cartoons that you might bring some levity to the classroom or amplify a key point.
From Barrons:
Why did I select it?
Too often people think just because the bank lends you money, you can afford to take it. Since housing is the largest purchase most people make in their lifetimes, buying too much house has long term implications
Use in conjunction with NGPF Lesson on Mortgages
_________________
Why did I select it?
Most people do not know that they can bargain to reduce...
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