It’s October, and that’s always a great time to peek into my pillowcase of personal finances – we toted our Halloween haul in pillowcases when I was a kid – to grab some tasty treats and expose some not-so-money-friendly tricks.
Tricks
Account takeovers. Costume parties aren’t the only place where people assume alternate identities. According to Javelin Strategy & Research’s 2017 Identity Fraud Study, account takeovers surged 31% last year. A record 15.4 million people were affected by some type of identity fraud. Continue to check your credit report, safeguard your personal info, usernames and passwords and vigilantly monitor your accounts.
Credit card debt. This summer the Federal Reserve reported an 8.75% increase over the same time last year in Americans’ revolving debt. In other words, people are adding to their credit card debt. And for the first time since the end of 2007, this type of debt eclipsed a trillion dollars. That’s downright frightening. Commit to developing a plan to knock out your debt and get help if you need it.
Car loans. After encountering a dozen or so ghost and ghouls on the sidewalks, you can become numb to the spectacle. That’s how I feel when it comes to the length of car loans. They keep getting longer and longer. Experian’s State of the Automotive Finance Market (Q1, 2017) put the average new-car loan length at about 69 months. That’s the average and means a lot of folks are in debt a lot longer. If you can’t afford the car you want with a loan of 60 months or less, look for a more affordable option.
Treats
Wages are growing. This is like reaching into your goody bag and pulling out a handful of your favorite treat—for me, that’s anything with peanut butter. The Atlanta Federal Reserve’s Wage GrowthTracker put wage growth for people age 16-24 at a year-over-year clip of 7.5% and for those 25-54 at 3.8%. While a bigger salary can mean a better lifestyle, it also can help you pay down debt, build savings and invest for the future. Balance your approach to a bigger paycheck.
Savings rates eclipse 5%. At the end of June, The Bureau of Economic Analysis reported the U.S. savings rate at 5.5%. Well below the 10% USAA suggests someone starting out in the workforce dedicates toward retirement, I still decided to put this in the treat category. Why? The arrival of the military’s new Blended Retirement System in 2018 will require those that are covered by BRS to save at least 5% in the Thrift Savings Plan to get the maximum government contribution to their account. So, while 5% shouldn’t be your goal, it should be the absolute minimum for those in the BRS.
Credit scores on the rise. FICO reported that for the first time the average credit score hit 700 back in April. That’s good news. Don’t let it lull you into a false sense of security. A threat could lurk around the next credit corner. Just because you can borrow, doesn’t mean you should. However, since how we manage credit can impact everything from job opportunities to insurance rates, this is a decidedly good trend.
Happy Halloween!
