MONEY Personal Finance

Turns Out (Gasp) Millennials Do Want to Own Cars

150119_EM_MillennialMyth
Jamie Grill—Getty Images

Young adults want to share everything--except maybe their car

Millennials have spurred the rise of the sharing economy by embracing the notion that renting is almost always better than buying. But even they want to own their own set of wheels, new research shows. Could homeownership, a diamond ring and other traditional purchases be far behind?

Some 71% of young adults would rather buy a car than lease one and 43% are likely to purchase a vehicle in the next five years, according to a survey from Elite Daily, a social site, and research consultants Millennial Branding. This finding suggests young adults that have popularized car-sharing options like Zipcar and RelayRides—and all sorts of other sharing options from wedding dresses to leftover meals—may be warming to traditional ownership.

Could it be that the kids are growing up and want something of their own? Other research shows that millennials, widely regarded as an idealist generation that favors flexibility and personal fulfillment over wealth, have begun backtracking there as well. Increasingly, they link financial health to life satisfaction.

For now, though, home ownership remains largely off their radar: 59% would rather rent a house than buy one and only one in four millennials are likely to purchase a house in the next five years, the survey found. “This shows that millennials don’t know anything about investing, even though they say they do,” says Dan Schawbel, managing partner at Millennial Branding. “A home is a much better investment than a car.”

Schawbel believes millennials are more eager to buy cars because they are delaying marriage and children, and they don’t want to be tied down with real estate. Plenty of research supports that view—and the trend toward delayed family formation. Yet it seems only a matter of time before this generation embraces marriage and homeownership too. The oldest are just 35 and, the survey found, three in five can’t afford to buy a home anyway.

The survey also found that millennials might be struggling less with student debt than is widely believed. Yes, student debt now tops $1.3 trillion. But young adults have money to spend. They are using their income to pay off their loans and getting support from their parents to pay for other things, Schawbel says. That may mean a car now or in the near future, and it seems increasingly clear that eventually it will include real estate. This generation is carving its own path, for sure. But the path may wind up looking more traditional than they know.

MONEY Financial Planning

5 Simple Questions that Pave the Way to Financial Security

Analyzing 20 years of data, the St. Louis Fed found that five healthy financial habits are the key to future wealth.

Want to know how your bank account stacks up against that of your neighbors? You’ll get an idea by asking yourself five simple questions, new research shows.

The St. Louis Fed examined data from the Federal Reserve’s Survey of Consumer Finances between 1992 and 2013 and found a high correlation between healthy financial habits and net worth. In the surveys, the Fed asked:

  • Did you save any money last year? Saving is good, of course. Just over half in the survey earned more than they spent (not counting investments and purchases of durable goods).
  • Did you miss any credit card or other payments last year? Missing a payment isn’t just a sign of financial stress; it may trigger late fees and additional interest. An encouraging 84% in the survey made timely payments.
  • After your last credit card payment, did you still owe anything? Carrying a balance costs money. In the survey, 44% said they carried a balance or recently had been denied credit.
  • Looking at all your assets, from real estate to jewelry, is more than 10% in bonds, cash or other easily sold, liquid assets? If you don’t have safe assets to sell in an emergency, you are financially vulnerable. Just over a quarter of those in the surveys have what amounts to an emergency fund.
  • Is your total debt service each month less than 40% of household income? This is a widely accepted threshold. A higher percentage likely means you are having trouble saving for retirement, emergencies, and large expenses.

The average score on the 5 questions was 3, meaning that the typical respondent—perhaps your neighbor—had healthy financial habits 60% of the time. That equated to a median net worth of $100,000. Those who scored higher had a higher net worth, and those who scored lower had a lower net worth.

In general, younger people and minorities scored lowest, while older people and whites scored highest. Education was far less relevant than age. “This may be due to learning better financial habits over time, getting beyond the financial challenges of early and middle adulthood and the benefit of time in building a nest egg,” the authors wrote.

It should come as no surprise that healthy financial habits lead to greater net worth over time. But the survey suggests a staggering advantage for those who ace all five questions. One of the lowest scoring groups averaged 2.63 out of 5, which equated to median net worth of $25,199. One of the highest scoring groups averaged 3.79 out of 5, which equated to a median net worth of $824,348. So these five questions not only give you an idea where your neighbors may stand—they pretty much show you a five-step plan to financial security.

TIME

5 Surefire Ways to Get Better Credit in 2015

You owe it to yourself to do these

Along with the New Year’s Resolutions about losing weight and learning a new language, plenty of Americans will be contemplating how to improve their credit in 2015.

Whether you’re trying to get a better credit score so you can qualify for a mortgage or a low rate on a car loan, are just starting to build your credit history or repairing it after a financial setback, experts say there are a handful of things you should be doing right now.

Consider a balance transfer. “January is the start of balance transfer season, [when] credit card issuers try to lure new customers with 0% APR promotional offers,” says Charles Tran, founder of the site CreditDonkey.com. While balance transfers can help people pay down a high debt load, you really need to read the fine print, Tran says. “Pay attention to the balance transfer fee and how long the promotional period is for,” he advises. Another thing you want to check is whether or not the promotional rate applies to new purchases or only to the balance you transferred onto the card. “Watch out, as a balance on the card will typically mean there is no grace period for purchases,” Tran warns.

Avoid applying for more. Applying for a credit card or loan dings your credit score just a bit, so if you’re planning a big purchase (say, a home or a car) where every point on your credit score counts, hold off on opening any other accounts for a while, says Odysseas Papadimitriou, founder and CEO of the sites CardHub.com and WalletHub.com. “Stop applying for other forms of credit at least six months in advance,” he advises.

Pay down any variable-rate debts. “It’s important to cut down your overall debt level as interest rates are predicted to rise,” Tran advises. Most credit cards these days are variable-rate cards with APRs linked to the prime rate, and right now the prime rate is unusually low. It literally has nowhere to go but up, which means more Americans will find themselves paying more to service their debts. For people who are already strapped, this could hurt their credit if they can’t make those higher monthly payments.

Check your credit reports. This is also especially important if you plan to buy a car or house this year, says Matt Schulz, senior industry analyst at the site CreditCards.com. “Check for errors such as accounts that you don’t recognize and late payments that you didn’t actually pay late,” he says. “Cleaning up any mistakes on your report can make a big difference to your credit score.”

Build a cash cushion. You might think your paycheck is already stretched thin, but experts say it’s important to sock away money in a savings account that you can access if you have an unexpected expense or interruption in your income stream. Without an emergency fund to tap, even a small shock to your finances could knock you into an expensive and long-lasting spiral of debt. “Do not get into additional debt without first having an emergency fund,” Papadimitriou warns.

MONEY Debt

Why Paying Off Those Holiday Gifts May Be Harder Than You Think

man with ball & chain attached to leg
Ingram Publishing—Alamy

More than a third of Americans have already gone into debt for the holidays, and many will find it more difficult to repay than they imagine.

As the holidays fast approach, 38% of Americans have already gone into debt for gifts, new research shows. Many will be shocked at how long it takes for them to pay all they owe.

In general, consumers do not expect their seasonal spending to set them back for long. More than half say they will pay for the spending spree by the end of January, and three quarters expect to be free from holiday debt by the end of March, according to a survey from CreditCards.com.

Nearly 1 in 5 Americans with debt say they will never be debt free.Just 5% worry that they will still be paying for this year’s holidays a year from now. That seems optimistic. Some 7% of consumers entered this season with unpaid debts from last year, according to a blog from the Center for Retirement for Retirement Research. (The figures were even higher in previous years.)

The survey further reveals how misplaced this optimism may be. Nearly one in five Americans with debt say they will never be debt free. That is double the rate of those who felt the same way in a survey last May. So as the economy has turned up in recent months, it seems debt spending has followed suit—accompanied by escalating angst over the debt hole consumers may be digging.

The typical consumer expects to be completely debt free, including a fully paid mortgage, by age 53, the survey found. Yet nearly half worry they will still owe at age 61, and 18% believe they will have debts when they die.

On cue, millennials are the most optimistic generation: Just 16% of those aged 18 to 29 with debt say they will never get out of debt, compared with 31% of those aged 65 and older and 22% of those between the ages of 50 and 64. Meanwhile, high-income households (those earning more than $75,000 a year) are only slightly more optimistic about paying off holiday debt than low-income households, suggesting that everyone is letting go a bit and testing the limits of their earning power.

America’s debt culture is a big contributor to the retirement savings crisis. Other studies show an increasing debt burden on seniors. Those past the age of 60 saw their average debt jump between 2005 and 2014, TransUnion reported. More seniors are carrying student debt all the way into retirement, a government report found.

Today’s spending may have far reaching consequences. To keep spending under control this season, create a holiday budget and stick to it. Track everything you spend. Pay off your highest interest rate cards first and consider transferring balances to a lower rate card. You might be able to negotiate a lower rate if you call your credit card company.

Read more on managing credit and debt in Money 101:
How Do I Get Rid of My Credit Card Debt?
Which Debts Should I Pay Off First?
How Can I Improve My Credit Score?

MONEY Kids and Money

Trouble Talking to Kids About Money? Try This Book Instead

parents trying to talk to teenage daughter
Getty Images/Altrendo

A new book hopes to impart important money lessons in just a few words and pictures

Talking to your kids about money is never easy. We have so many financial taboos and insecurities that many parents would rather skip it—just like their parents likely did with them. If that sounds like you, maybe a new easy-to-digest money guide written for teens can be part of your answer.

As a parent, you have to do something. Kids today will come of age and ultimately retire in a vastly less secure financial world. Their keys to long-term success will have little to do with the traditional pensions and Social Security benefits that may be a big part of your own retirement calculus. For them, saving early and building their own safety net is the only sure solution.

Most parents get that. After all, adults have seen first-hand the long-running switch from defined benefit to defined contribution plans that took flight in the 1980s. Yet only in the last 15 years have we really begun to grasp how much this change has undermined retirement security. Now, more parents are having the money talk with their kids. Still, many say they find it easier to talk about sex or drugs than finances.

The big challenge of our day, as it relates to the financial security of young people, is getting them thinking about their financial future now while they have 40 or 50 years to let their savings compound. But saving is only one piece of the puzzle. Young people need to protect their identity and their credit score—two relatively recent considerations. Many of them are also committed to making a difference through giving, which is an uplifting trait of younger generations. Yet they are prone to scams and don’t know how to vet a charity.

In OMG: The Official Money Guide for Teenagers, authors Susan and Michael Beacham tackle these and other basics in a breezy, colorful, cleverly illustrated booklet meant to hold a teen’s attention. The whole thing can be read in an hour. I’m not convinced the YouTube generation will latch on to any written material on this subject. And while the authors do a nice job of keeping things simple, they just can’t avoid eye-glazing terms like “liquidity” and “principal.”

But they make a solid effort to hold a teen’s interest through a handful of “awkward money moments,” which illustrate how poor money management can lead to embarrassing outcomes like their debit card being declined in front of friends or having to wear last year’s team uniform because they spent all their money at the mall. “Kids are very social and money is a big part of that social experience,” says Susan Beacham. “No teen wants to feel awkward, which is why we chose this word. If they read nothing else but these segments they will be ahead of the game.”

The Beachams are co-founders of Money Savvy Generation, a youth financial education website. They have a long history in personal finance and created the Money Savvy Pig, a bank with separate compartments for saving, spending, donating, and investing. In OMG, they tackle budgets, saving, investing, plastic, identity theft, giving, and insurance.

A new money guide for young people seems to pop up every few years. So it’s not like this hasn’t been tried before. Earlier titles include Money Sense for Kids from Barron’s and The Everything Kids Money Book by Brette McWhorter Sember. But most often this subject is geared at parents, offering ways to teach their kids about money. Dave Ramsey’s Smart Money Smart Kids came out last spring and due out early next year is The Opposite of Spoiled: Raising Kids Who are Grounded, Generous and Smart About Money from New York Times personal finance columnist Ron Lieber.

In a nod to how tough it can be to get teens to read a book about money, Beacham suggests a parent or grandparent ask them to read OMG, and offer them an incentive like a gift card after completing the chapter on “ways to pay” or a cash bonus after reading the chapter on budgets and setting one up. “Make reading the book a bit like a treasure hunt,” she says. That just might make having the money talk easier too.

 

 

 

MONEY Kids and Money

Why More Parents Are Talking to Toddlers About Money

toddler counting pennies on table
Derek Henthorn—Corbis

The money talk is occurring as young as age 3. Here's how that could change the world.

Talking about money at home has long been a taboo subject. But the Great Recession changed that, and now we’re seeing evidence of more open discourse—and maybe even a payoff.

Nearly two-thirds of parents with children between the ages of 4 and 12 pay their kids an allowance to teach them basic money management lessons, according to a survey from discount website couponcodespro.com. On average, these parents began teaching their kids the value of money at age 3, the survey found.

In a similar study two years ago, the American Institute of Certified Public Accountants found about the same percentage of parents using allowance as a teaching tool. But they did not start as early. In that study, kids typically received allowance by age 8. In another study, fund company T. Rowe Price found that 73% of parents talk to their kids regularly about money—and about one in five stepped up the frequency since the financial crisis.

Talking more openly about money inside the household is one of the recession’s silver linings. Many families experienced such a financial blow that they could not avoid the discussion. But even setting aside the recession, starting earlier and talking more frequently makes a lot of sense. In the online world, kids begin making money decisions earlier than previous generations, and when they come of age they will have far fewer safety nets. They need to begin saving with their first paycheck and never stop.

The most common money conversations between youngsters and parents revolve around saving in a piggy bank (73%), working for pay around the house (66%), budgeting for things the kids want (57%), and finding bargains at the grocery store (29%), according to the couponcodespro.com survey. The survey also found that the average weekly allowance across the age group was $13.50, which is higher than the often-recommended rate of 50¢ to $1 per week per years since birth.

The survey also found that 73% of parents paying an allowance admit to buying their kids treats, a practice that can undermine the value of paying allowance in the first place. “Sweets and clothes I can understand,” says Nick Swan, CEO of couponcodespro.com. “But buying them toys for no reason when they are being given an allowance can backtrack on everything they are trying to teach their children about money.”

Still, money talk may be beginning to make a difference. In a recent survey of Gen Z teens (aged 13 to 17), Better Homes and Gardens Real Estate found that half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five have already begun saving.

This youngest generation also seems to be managing credit cards more adeptly than their older cousins, the Millennials. These are encouraging trends that, if they persist, will help the economy long term and may just insulate this youngest generation from another crisis.

 

 

 

TIME Saving and Spending

This Law Would Immediately Improve Your Credit Score

A high-ranking lawmaker is pushing for Congress to redraw the road map for how credit scores are calculated, with an eye toward giving a little more breathing room to people who have fallen on tough times financially.

California representative Maxine Waters, the highest-ranking Democrat on the House Financial Services Committee, is introducing legislation that would modify the Fair Credit Reporting Act in several ways.

It would sharply reduce the amount of time negative information stays on your report. Right now, if you default on a loan, have a debt go into collections or similar, you’re stuck with that black mark for seven years. Waters’ proposed law would shave three years off that and wipe the slate clean after four years. The proposal also would “reverse” defaults on private student loans if the borrower makes nine on-time payments in a row.

“It probably is time to look at the seven-year reporting period and find out what the data really says,” says Gerri Detweiler, director of consumer education at Credit.com. “The Fair Credit Reporting Act was passed in 1970 before credit scoring was as pervasive as it is today,” she points out. A penalty that might have seemed reasonable back then might be too punitive today now that credit scores play into everything from how much interest you pay on a credit card to whether or not you land a job. (Waters also wants to stop employers from using credit checks when screening applicants.)

Waters’ bill also would erase debts that are settled for less than the original balance due, including medical debts. Fair Isaac, the company behind the widely-used FICO score, also made some recent tweaks to its scoring formula, including a similar change that won’t penalize people for late payments if the debts have been paid off. The company also said it will give less weight to medical debt, following research conducted by the Consumer Financial Protection Bureau which found that medical debt doesn’t automatically indicate lower creditworthiness.

Some credit experts are skeptical of the impact and warn of unintended consequences and higher costs to borrowers. “This will result in higher rates for everyone,” predicts Amber Stubbs, managing editor at CardRatings.com. “If [banks] are less able to accurately predict risk, they will proactively increase the cost of loans across the board.”

And John Ulzheimer, credit expert at CreditSesame.com, writing in Business Insider, says that Waters’ bill places “unreasonable” demands on financial services providers.

Consumer advocates, though, are happy about the plan. “A lot of reform [is] needed,” Chi Chi Wu, a lawyer with the National Consumer Law Center, tells the Washington Post.

“She’s obviously thought through the thorny issues,” says Linda Sherry, director of national priorities for Consumer Action. “I commend Maxine for this proposal,” she says, although she acknowledges not all the proposed changes would be likely to make it into the final law. “It seems unlikely such a bill would pass in this House,” she says.

MONEY Kids and Money

The Surprising Thing Gen Z Wants to Do With Its Money

Teen in front of home
Getty Images

More than half of teens would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house when they're older.

During the Great Recession, home ownership took a beating as the ideal for the American dream. The median home nationally lost a quarter of its value, prompting adults of all ages to adopt other elusive goals—like retiring on time for boomers or working on their own terms for millennials.

Just 65% of Americans own their home, down from 69% pre-bust. And four out of five Americans are rethinking the reasons they’d want to buy a house in the first place. But Generation Z—also known as post-millennials, born after the 1990s Internet bubble— seems to prize home ownership like no generation since their great-grandparents.

An astounding 97% of post-millennials believe they will one day own a home; 82% say it is the most important part of the American dream, according to a survey of teens age 13 to 17 by Better Homes and Gardens Real Estate. More than half would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house.

This yearning stands in starkest contrast to the aspirations of millennials, older cousins who pretty much created the sharing economy and in large numbers prefer to rent. The housing bust and foreclosure epidemic scarred millennials, probably for life, as some watched parents and neighbors lose everything. In a key part of this generation—heads of households age 25 to 34—renters increased by more than 1 million in the years following the crisis, while the number who own a home fell by 1.4 million.

Post-millennials saw the carnage, too, though at a tender age that left them more confused than traumatized. Where millennials hardened and vowed never to repeat the errors of their parents, post-millennials sought the comfort of family and togetherness, says Sherry Chris, CEO of Better Homes and Gardens. “Many of these Gen Z teens were 7 to 11 years old when the recession hit,” Chris said. “At that age, children equate home with stability.”

The innate quest for stability leads them to prize a family home above things like going to college, getting married, having children, or owning a business, according to the survey. And the dream appears firmly grounded in reality. Chris observed that today’s teens have more information than any previous generation at their age and show early signs of financial awareness. Asked for an estimate of what they might spend on a house, the 97% who aspire to be owners gave an average response of $274,323—strikingly close to the median home value of $273,500.

Half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five teens have already begun saving, the survey found. Post-millennials, on average, aim to own a home by age 28—three years earlier than the median age of first-time homebuyers reported by the National Association of Realtors.

These are encouraging findings. A home remains most Americans’ single largest asset, and while the housing bust will have lingering effects, home prices nationally tend to rise every year—and have been trending up again the past few years. Not all of the news is good: Only 17% of post-millennials believe stocks are the best long-term investment; half prefer a simple savings account, TD Ameritrade found in a survey that defines the generation as slightly older (up to age 24).

But the TD survey also found that post-millennials have half the post-college credit card debt of millennials. And the Better Homes survey suggests that our youngest generation is at last learning more about money at an early age, which is the goal of a broad public-private financial education movement. A generation of financially adept youth who begin to save and gather assets that will grow for four or five decades is the surest way to avoid another meltdown and solve the retirement savings crisis.

Related:
Why Gen X Feels Lousy About the Recession and Retirement
Our Retirement Savings Crisis—and the Easy Solution

MONEY Saving

This App May Let You Retire on Your Spare Change

Acorn App
Acorn

The new Acorns app rounds up card purchases and invests the difference for growth, with no minimums and low fees.

Americans spend $11 trillion a year while saving very little. So it makes sense to link the two, as a number of financial companies have tried to do over the past decade. The latest is the startup Acorns, which hopes to hook millennials on the merits of mobile micro investing over many decades.

Through the Acorns app, released for iPhone this week, you sock away “spare change” every time you use your linked credit or debit card. The app rounds up purchases to the nearest dollar, takes the difference from your checking account, and plunks it in a solid, no-frills investment portfolio. So when you spend, say, $1.29 for a song on iTunes, the app reads that as $2 and pushes 71¢ into your Acorns account. With a swipe, you can also contribute small or large sums separate from any spending.

The Acorns portfolio is purposely simple: Your money gets spread among six basic index funds. The weighting in each fund depends on your risk profile, which you can dial up or down on your iPhone. More aggressive settings put more money in stocks. But you always have some money in each fund, remaining diversified among large and small company stocks, emerging markets, real estate, government and corporate bonds. The app will be available for Android in a few weeks and through a website in a few months.

Why Millennials Are the Target

Micro investing via a mobile device clearly targets millennials, who show great interest in saving but have been largely ignored by financial advisers and large banks. Young people may not have enough assets to meet the minimum requirements of big financial houses like Fidelity, Vanguard, and Schwab. With Acorns, there are no minimums. There are also none of the commissions that can render investing in small doses prohibitively expensive. “We want small investors who can grow with us over time,” says Acorns co-founder Jeff Cruttenden.

This approach places Acorns in the middle a rash of low-fee, online financial firms geared at young adults—including Square, Betterment, Robinhood, and Wealthfront. Such firms hope to capitalize on young adults’ penchant for tech solutions and lingering mistrust of large financial institutions. Cruttenden says a third of Acorns users are under age 22. They like to save in dribs and drabs—and manage everything from a mobile device.

Acorns charges a flat $1 monthly fee and between 0.25% and 0.5% of assets each year. The typical mutual fund has fees of 1% or more. Yet many index fund fees run lower. The Vanguard S&P 500 ETF, which invests in large company stocks, charges just 0.05%. If you have a few thousand dollars to open an account, and the discipline to invest a set amount each month, you might do better there. But remember that is just one fund. With Acorns you get diversification across six asset classes—along with the rounding up feature, which seems to have appeal.

Acorns has been testing the app all summer and says the average account holder contributes $7 a day through lump sums and a total of 500,000 round ups. Cruttenden says he is a typical user and through rounding up his card purchases has added $521.63 to his account over three months.

A New Twist on an Old Concept

Mortgage experts tout rounding up as a way to pay off your mortgage quicker. On a $200,000 loan at 4.5% for 30 years your payment would be $1,013.38. Rounding up to the nearest $100, or to $1,100, would cut your payoff time by 52 months and save you $26,821.20 in interest. Rounding up your card purchases works much the same way—only you are accumulating savings, not cutting your interest expense.

Bank of America offers a Keep the Change program, which rounds up debit-card purchases to the nearest buck and then pushes the difference into a savings account. Upromise offers credit card holders rewards that help pay for college. But Acorns’ approach is different: the money goes into an actual investment account with solid long-term growth potential.

One possible drawback is that this is a taxable account, which means you fund the Acorns account with after-tax money. Young adults starting a career with a company that offers a tax-deferred 401(k) plan with a match would be better served putting money in that account, if they must choose. But if you are like millions of people who throw spare change in a drawer anyway, Acorns is a way to do it electronically and let those nickels, dimes, and pennies go to work for you in a more meaningful way.

Read more on getting a jump on saving and investing:

 

TIME Financial Planning

This Reality TV Show Can Save Your Retirement

Getty Images

Can a reality TV show fix your troubled family finances?

What does it mean that a reality TV show is in the works, aiming to help couples sort through their money woes? Yes, a major cable station is working up a “family finance” pilot that amounts to a Biggest Loser for folks who have never seen a credit offer they didn’t like.

Have producers of this popular genre simply run out of material? I mean after Here Comes Honey Boo Boo, what’s left? Or is it that Americans’ inability to manage money has become so big and obvious, and economically debilitating, that there is now an appetite for a tough-love TV program that puts struggling families on a debt diet?

Think Real Housewives, only everyone is broke. Or maybe Hell’s Kitchen, only the host has a heart. No one will get voted off this island, or hear the words “you’re fired.” But there might be some Jersey Shore sniping when couples confront their ridiculous spending and credit practices.

The show in development may never get to air. I only know about it because I played a small role in casting. From what I could see anecdotally, young families in the U.S. have issues that appear far worse than any data points or averages suggest.

One young Texas couple took a big hit when the husband lost his job and found work at half the pay. The wife went to work. She hates her job and not being a full-time mother. The arrangement is causing all kinds of stress in the relationship. Yet they haven’t taken the time to do some simple math: They are spending more on childcare than she makes each month. Quitting her job would solve a few big problems right away.

A Chicago couple in their early 40s has household income of $200,000 and zero savings. They have a big mortgage that’s killing them, some unusual ongoing healthcare expenses that will be with them for years, and they are sending two kids to costly private elementary and high schools. Again, stress is driving them apart. But doing a little math, it seems clear they could fix it all just by choosing the decent public schools in their affluent neighborhood and putting the savings toward retirement, mortgage payments and healthcare. Even they wonder about the private school sacrifice. But they haven’t made the tough decision because of appearances.

These are the kinds of choices that undermine the financial security of millions of families all the time. I’m rooting for this show to get to air, and if it does I hope it won’t devolve into tears, arguments and an ornery host with a whip. A lot of troubled family finances really are easily fixed through simple math and not-so-simple discipline. If a reality TV show can illustrate that, it will have been worth more than all the silly Kardashian episodes ever aired.

 

 

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