**** Hello Open Source ****

Family Budgets Stretched Further Than Ever Before

June 21, 2016

ccording to a news report in April 2016, family budgets are being stretched to the limit. The NBC News report indicates that most consumers are spending more but their salaries are not keeping pace. The data, which was gathered by Pew Charitable Trusts, points out that basic expenses, such as health care, food, transportation and housing, all took up larger shares of people’s household incomes in 2014 than they did during the recessionary period in 1996. The squeeze in funds is especially felt among families whose household incomes are lower.


For example, a family of four made up of two children and two adult wage earners experienced an increase in their core income of about $10,000 between 1996 and 2014. However, basic costs increased by the same amount. Therefore, the percentage of a household’s income spent on expenses rose from 71% in 1996 to 75% in 2014. This type of increase, following the recent financial crisis in the US and elsewhere, is a clear representation of how household budgets can get strained.

Based on an examination of data from the Bureau of Labor Statistics, Pew concluded that –

  • Total household spending grew by approximately 25% between 1996 and 2014. However, income growth lagged significantly behind. In 2014, the average income had plunged 13% over a 10-year period while expenses increased by almost 14%.
  • Low income families expended much more of their income on basic needs than families in the upper income categories. Some lower income households went into the red.
  • Over the past 20 years, spending on housing has increased. However, lower income households spent the most on shelter (40%) when compared to middle income households (25%) or upper income wage earners (17%).

According to the news report, when most of a family’s budget goes toward necessities, families have less money for discretionary purchases. Discretionary purchases include such activities as dining out or entertainment. It is also more difficult to save money for any type of financial cushion.

A recent report published by Bankrate.com supports this data. The report found that about 63% of consumers surveyed said they currently do not have the additional money to for a health emergency or car repair without going into debt. According to economic experts, one of the biggest complaints about economic recovery has to do with salary growth.

Calgary City Hall’s Payday Loan Proposal Already Approved by Committee

June 13, 2016

Who says city hall doesn’t work fast?

Last month, the Calgary city hall task force requested that the municpitality clamp down on the payday loan industry. Despite the provincial government implementing its own set of rules and regulations for the industry, city councillors thought it would be a prudent move to adopt their own series of guidelines that can protect consumers from “predatory” payday lenders.

city hall in Calgary

A couple of weeks later, the payday loan proposal was approved Wednesday by the committee responsible for community and protective services. The payday lending and financial inclusion task force report suggested officials institute mandates for operators to display signs on debt counselling and money management and verbally inform customers about these services.

If payday loan stores were in violation of these rules then they’d pay a fine of $1,000.

Moreover, the city’s task force report recommended that the New Democratic Party-led province incorporate a financial literacy fund and establish a standard lending contract for clients.
The proposed rules will now go to city council for a vote. It’s unclear right now what its chances are of being approved or rejected.

This comes one year after the city prohibited payday loan businesses from opening in clusters.

Since last week, the payday loan industry said that municipal reforms would simply duplicate current measures as payday loan stores combat “devastating” restrictions from the Albertan government. However, one official says such rules would simply complement provincial regulations, and would not force businesses in this industry from leaving Calgary.

“These new regulations appear to be one more step in the direction to run legitimate payday loan businesses out of business. We don’t understand. Banks won’t lend money to the customers so we do and if it’s not us, who’s going to fill our shoes?” Landmarkcash.com public relations manager Carl Fitz.

“There are other jurisdictions in Canada and the U.S. with similarly restrictive rules or more restrictive rules and, contrary to payday lenders and critics, the reforms have not caused the industry to shut down and leave,” said Courtney Hare, a public policy manager with Momentum, a community economic development organization, in a statement.

The province put forward the Act to End Predatory Lending, also known as Bill 15. It would reduce payday loan fees from $23 to $15 for every $100 borrowed. The bill would also allow borrowers to repay their loans in installments rather than in lump sums.

Payday loan stores provide customers with high-interest, short-term loans. Proponents of the industry say it helps consumers to cover their rent or utility bill when they’re short on cash until their next paycheck. Critics, meanwhile, note that payday loans send consumers into debt that is hard to pay off. and that the banking industry needs to intervene to fill that void.

Across North America and Europe, governments have passed legislation reining in the payday loan industry. Some states in the U.S. have gone as far as banning payday loans altogether.

Study Shows Americans Feel they are not Saving Enough for Retirement

May 7, 2016

There has been a lot of press over recent years with regards to the concerns that many officials have when it comes to retirement savings amongst Americans. There are fears that huge numbers of Americans will find themselves in a situation where they can no longer afford to live in the way they have become accustomed to once they retire and in some cases people may struggle just to meet essential day to day costs once they are no longer working and earning a salary.

Retirement fund

It is not just officials that are concerned about this matter – a recent study showed that there are many American people who are only too well aware that they are not saving enough money to enable them to enjoy a comfortable retirement. In fact, most Americans are concerned that their retirement funds will not last long enough according to the report.

Tips to help those worried about retirement funds

Figures from the report showed that just over 30 percent of people who were in a retirement plan at work were very confident or extremely confident that their funds would last long enough. The majority of those polled as part of the study believed that they would outlive their funds and would spend part of their retirement seriously struggling when it came to finances.

One of the things that consumers are being advised to do in order to save for the future is to take inflation into account. Those who are planning to retire in twenty years or so will need double the retirement funds of those retiring now according to a report from Wells Fargo. This is something that savers need to take into account if they want to be able to maintain the same standard of living that they have become accustomed to.

Another tip from experts was for savers to continue investing in stocks. Officials said that even during retirement the long term returns from stock investments could outpace inflation in comparison to returns from bonds or cash savings. According to some officials, consumers should have a minimum of 40 percent of their portfolio in stocks when they retire.

Finally, the report suggests that people should wait as long as possible before they start collecting social security. Although this is something that can be done from the age of sixty two, experts have pointed out that retirees could get considerably more money each month if they wait until they are at least seventy years of age.