Most people will tell you that they find it odd that they cannot seem to grow money in their savings account enough though they strategically ensure ways to cut spending their money. You are not the only one that feels this way. It’s the most common issue that people struggle with today.
People can start to feel frustrated when they have the willpower to save, but the results don’t reflect the effort. When this happens, people will become discouraged from wanting to continue then stop, and this cycle can be quite a dangerous one.
Saving your cash and not spending your cash are completely different things. Most believe they are the same. There are various forms of the “no spending, not matching savings” issues. Let’s say, for example, you choose to make your lunch at home and take it to work with you over the next few days so you can save yourself some money. However, you notice two weeks later, you savings account is no higher from the time you started. Or how about when you are ecstatic that gas prices are lower, which could are decreasing which you know will translate into a reduction of spending gas by $160 each month. In both of these instances, you only took half the necessary steps you should be doing to save cash.
Let’s take a deeper look as to why not spending your money doesn’t equate to savings. The true culprit is online banking. From the time banks have come into existence, they’ve altered the financial world and started implementing a couple of odd habits. Most people love instant gratification, and electronic devices give them that. Individuals will look on their phones or their PCs to look at the balance of their checking account more often than they should, and this is where the problem happens.
A lot of people believe that looking at their current balance is the true depiction of what their savings account actually contains, so they may spend down to the last dime. Let’s say you believe that your account has $500, but when you look at it, it’s actually m$1024. Discovering this causes variations in the average person’s spending behavior even though there are likely several reasonable explanations as to how their balance is more than they suspected. More often than not, transactions have not been posted yet, or a check or a payment did not get cleared.
If someone were a chronic balance spender, they would probably find themselves spending more. Think about waking up in the middle of the night and feeling hunger, so you decide to walk inside of the kitchen to get a late night snack. When you rummage and search the pantry to get those tasty bite-sized brownies you love so much, you are sure the box is close to finished. However, you’re pleasantly surprised when you learn that there are more cookies in the box. You decide to treat yourself with more cookies. Whenever we are given a lot of a particular resource, we tend to use up that resource more than we intended.
It works the opposite way as well. Whenever we have to work with spare resources, we will end up using fewer resources than we would like. Whenever you don’t spend cash, you don’t think about how much money you have in the bank.
Any time you notice you don’y use up a certain amount of money that you normally spend, the best thing for you to do is immediately move the money from your checking’s account and straight into your savings account. Are your saving yourself a hundred or so buck each month because you don’t have to put as much money towards certain things anymore? Then you should start putting the money you would have spent on gas to your savings account every time you fill up your gas tanks. Did you make lunch and take it with you to your job? You should be moving the extra money to your savings account that you didn’t spend dining out.
It really is that simple.
Peer to Peer Lending is Giving Banks a Run For Their Money
People usually think of going to bank when they need to take out a loan. Banks may give people who are already their customers certain discounts on interest rates, which is a major factor we look at when choosing a lender so that we can go with them.
Banks are usually hesitant to give small business loans because of their lack of financial history. They would rather avoid having any risky investments into their portfolios. Because of that it has been quite hard for small business owners. Normally, getting approved for loans can take a long time. On top of that, consumers have to worry about the high costs of advanced underwriting and understanding their interest rates.
However, banks are in losing out to competitors recently with a company that is giving them a run for their money. Lending Club has been grabbing business from banks quite aggressively, and they are on the verge of reducing loan portfolios from balance sheets.
The Lending Club is positively altering the financial sector to make financing for consumers more gratifying and making advances much more affordable. The company matches investors with borrowers that are based on their risk appetite. The Lending Club is involved with rendering an online market that matching investors with borrowers. The platform lets members join in to trade standard or customized program loans.
Their model is a peer-to-peer lending platform. It’s a practice of delivering cash to certain consumers and all without the need of a financial intermediary. The Lending Club, in particular, is posing a real threat to most banks. According to Lending Club, the borrowers who come to them get almost 33% off the typical interest rates most credit card companies charge.
The latest quarterly results showed that the Lending Club Corporation experiences a whopping 92% year-over-year increase in regards to loan origination. As of now, the primary loan they make is for personal loans. They’re also pushing to help small businesses out as well.
The good thing about Lending Club is that they are not obligated to follow this kind of strict rules that the banks also do, thus creating a gleaming window of opportunity for them to grow their business. A vast majority of analysts look optimistically at the Lending Club’s prospects in the long run. Nine out of the nineteen analysts that covered the Lending Club stock recommended buying it. Seven of the nineteen suggested that there be a hold. At the end of October, the Lending Club stated that their earnings for the third quarter fiscal year for 2015. They happily announced that they were able to surpass even what analysts originally suspected to be both their earnings and revenue. Their earnings per Share, or EPS, came in at $0.04, which was double the amount the consensus estimated to be $0.02. On top of that, their revenue currently stands at $116.3 million, against the analysts’ predicted amount of $108 million.
The Lending Club stock traded up 3.11 at $12.58 at this past Wednesday’s close. During the same trading session, the S&P500 index rejected around 1.3%. Still, they experienced a slight increase of 0.08%. It proves that the Lending Club Corporation can do better in the market.
The Lending Club is currently well-positioned to report both fabulous operating and financial results. The Lending Club should continue to focus aggressively on marketing activities to make use of any opportunities in the future. While they are currently giving their customers a huge discount on the interest charge of a loan, it’s likely the company will continue to be successful in creating a low-cost platform that will have the ability to generate enormous earnings for them and savings for their customers.
Washington State OKs Some of the Nation’s Toughest OT Rules
SEATTLE — Washington state is adopting some of the nation’s most aggressive overtime rules, restoring protections for hundreds of thousands of salaried workers and taking what supporters say is a crucial step toward rebuilding the middle class.
The Department of Labor and Industries finalized the rules Wednesday and will phase them in by 2028. By that time, salaried workers making up to about $83,400 a year will be entitled to time-and-a-half pay if they work more than 40 hours per week.
Workers making more than that could also get overtime unless they are certain types of professionals — such as those with higher degrees — or unless they are truly managers or executives, as demonstrated by their ability to and fire, direct other people’s work or make significant business decisions.
Many job categories will be affected, including shift managers at restaurants and retail establishments, office managers, some medical workers and other white-collar staff, officials said.
“We need to make sure the middle class shares in our state’s prosperity,” Washington Gov. Jay Inslee said in a news release. “Overtime protections ensure workers are fairly compensated when they work more than 40 hours in a given week — time that would otherwise be spent with their families and in their communities.”
Employees who are paid hourly have long been entitled to overtime. But salaried workers have generally been entitled to it only if they make less than a certain amount: about $23,660 under federal law, or more where state laws are more generous.
Those thresholds may have worked decades ago, when they meant that nearly two-thirds of salaried workers nationally were covered by overtime protections. But after a recession in the 1970s, lawmakers largely stopped updating them. Washington’s has been stuck at $13,000 since 1976.
As people’s salaries rose with inflation, they found themselves no longer eligible for overtime. Businesses have also been able to convert hourly workers into salaried ones who make just more than the threshold as a way to avoid additional staff or paying overtime.
In other cases, workers have been classified as managers when their actual duties more closely resemble those of hourly workers, officials said.
By some estimates, as few as 7% of salaried workers across the country are now entitled to overtime.
The federal government and several states, including California, New York, Pennsylvania, Colorado, Michigan and Massachusetts, have recently updated or started to update their overtime rules, but none have adopted a target threshold as high as Washington’s, said Paul Sonn, state policy program director with the National Employment Law Project.
The rules adopted by the Trump administration will raise the threshold to cover workers making up to $35,308 a year — a significant cut from the $47,000 limit proposed by the Obama administration.
“The overtime threshold is to the middle class as the minimum wage is to low-wage work,” said Nick Hanauer, a Seattle venture capitalist whose think-tank , Civic Ventures, advocates for progressive economic policies. “It is the indispensable labour protection for middle class people.”
Business groups in Washington have agreed that the state’s rules needed to be updated, but they criticized the plans as drastic. The Association of Washington Business, warned when the proposed rules came out in June that they would be a shock to many businesses and that they could particularly hurt nonprofits.
The organization warned that many businesses might convert salaried workers to hourly ones, reducing scheduling flexibility.
After hearing extensive public comment, the department added two years to the phase-in period. The threshold will increase incrementally until it reaches 2.5 times the minimum wage — about $83,400 — by 2028. The rules will phase in more slowly for businesses with fewer than 50 employees.
The department estimates that by the time they are fully implemented, the new rules will give overtime protections to about 260,000 workers who don’t have them and strengthen overtime protections for about 235,000 others. Affected workers will also become eligible for sick leave and retaliation protections.
At a news conference Wednesday, Labor and Industries Director Joel Sacks gave an example of one type of worker who will be protected : a shift manager who makes $40,000 a year but is expected to work 60 hours a week.
Under the new rules, that worker will be paid overtime for the additional hours, or the business will need to additional staff.
“It’s fair, it’s right and it’s long overdue,” Sacks said.
Among those who might be helped is Victor Duran, a co-manager of a sports apparel store south of Seattle. He said he makes about $52,000 a year and doesn’t get overtime, but is required to work at least 45 hours per week — and up to 60 during the holidays.
“We say bye to the family at the beginning of the season and say we’ll see them after Christmas,” Duran said.
Is There a Lesser Evil Between Buying and Renting?
Most people are excited to move out of their parents’ home and gain a little independence. The only major downside is having to pay a mortgage or monthly rent. The big question is whether to buy or rent. No matter which you go for, the rule of thumb is always to keep your housing costs to no more than 30% of your monthly income.
Harvard’s Joint Center for Housing Studies states that over 21 million tenants who rented in the last year spent much more than 30% of their monthly income. About a quarter of these people experiences a higher degree of a financial burden because over half of their monthly income goes to rent. In those cases, these individuals have to compromise the remainder of their budget. The study states the result is a 55% drop in healthcare spending and a 40% in grocery shopping to compensate. The primary reason that so many people are struggling is rental prices are climbing higher than ever while wages are on the decline.
From 2001 until 2014, the average household income decreased by about 10% while rental prices inflated 7%. Last year, the average apartment cost $1,380 to rent, which is a 25% increase compared to prices three years ago. Even so, there is still an incredible demand for apartments, and the national vacancy rate has been pushed to a 30-year low. Nowadays, low-income households are not the only ones struggling; about 20% of middle-class households find themselves in the same predicament. As if things couldn’t get any worse, experts, like chief economist of Zillow, Svenja Gudell, speculate that prices will only go up over the next year, by about 3% to 5%.
Still, not all hope is lost for those that are looking for something cheaper. Interestingly enough the head of strategic marketing at Zumper, Devin O’Brein, states that prices will be more leveled out in metro hot spots like New York City, San Francisco, and Boston. O’Brien believes that there will be price gains in Oakland that will outpace those in San Fransico in 2016. He also suspects that there will be an increase in growth around Dallas, Miami, Austin, and Houston.
Is there a lesser evil between buying and renting?
If you had to make a smart move between one of the two, it might be a better option to purchase a house this year. Although mortgage interest rates are also expected to climb for the first time in about a decade, there is still a chance you might find a bargain on a home. House prices are expected to drop this year; the opposite of rentals. If you have been contemplating purchasing a home, but you have been stuck in the wave of high prices, it may be your only chance for a while to find a deal.
Around six million homes are projected to be sold from April through September alone this year, and not everyone will be able to take advantage of what is out there. Jonathan Smoke, chief economist at Realtor.com, stated the slowdown in home prices will push more homeowners to list their houses, which means you will have plenty of options. It is also believed that new home markets will climb next year with builders keeping a watchful eye on both starter and middle-range homes. There will likely be a significant amount of homes listed, so the amount of bidding will decrease.
With increased interest rates on the way, the window for record low mortgage rates will soon end. Higher rates will push up borrowing costs and monthly mortgage payments. If you are considering to buy or have a rental contract that is almost up, it won’t hurt to look into becoming a homeowner. Housing Economist at Trulia, Ralph McLaughlin, stated that mortgage interest rates would need to rise as high as 6.5% for the cost of buying a home to equal the cost of renting. Are you happy where you currently live?
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