Just as today's wants quickly morph into tomorrow's needs, bad money moves often turn into recommended money moves. As reported on MSN recently, borrowing against your home equity or retirement savings used to be considered bad ideas. But today many lenders routinely promote home equity loans as good ways to pay off credit card debt and most 401(k) plans offer loans.
Columnist Liz Pulliam Weston says both forms of borrowing are bad ideas. Research shows that when people take a home equity loan to pay off credit card debt, the credit card debt usually reappears within two years. That's because they never dealt with the root causes of the credit card debt. As for borrowing against your 401(k) plan, one problem is that if you leave your job the loan will need to be repaid quickly or you'll be hit with an early withdrawal penalty and taxes.
Matt's View
If credit card debt has you contemplating a home equity or retirement savings loan, download my free Dumping Debt pak
first. There's no magic wand inside that'll erase your debts overnight, but it's a proven plan that'll help you get out and stay out of debt.
It's tough enough to teach kids how to manage money wisely, but now Hasbro has announced plans for a new version of its popular The Game of Life board game in which play money will be replaced by a Visa-branded card. According to Kiplinger's Personal Finance magazine, in the new version, called Twists & Turns, players will insert their card into a LIFEPod to keep track of their finances, which will make counting cash obsolete.
Matt's View
You could certainly argue that plastic is more "real world" than cash these days. However, when it comes to teaching kids about money, coins and currency--even play money--are better training tools than plastic.
Nearly 20 percent of children 0-2 years old now have a TV in their bedroom, as do more than 40 percent of 3-4 year olds. Those are among the findings of a new study from the American Academy of Pediatrics, as reported by the Chicago Tribune. The main reason parents cited for putting TVs in their kids' rooms is so that different family members can watch their favorite shows.
Matt's View
Of course, the AAP is concerned with healthy development, and it recommends no TV viewing at all for children under the age of two. For older children, the Academy recommends no more than one or two hours of TV viewing per day, and then only educational or non-violent programs.
But there are financial implications here as well. As Boston College sociologist and Born to Buy
author Juliet Schor has pointed out, allowing children to watch TV unsupervised gives marketers direct access to kids, which at least dials up the "I want this" nag factor. Schor's research has also shown a correlation between TV watching and saving: the less TV people watch the more they save. In other words, raise your kids on less TV and you might just raise a saver as well.
Thinking about opening a 529 college savings plan for your little one? Savingforcollege.com
used to be the recommended site for learning about the tax-advantaged plans and comparing the many options. But that site has gone the "free, free, free, FEE!" route, with some of its information now available to paid subscribers only. Fortunately, as reported by USA TODAY, there's an alternative from the non-profit College Savings Plans Network
.
Matt's View
Even if you don't have kids, a 529 plan contribution makes a great gift for the children of your friends or family members. Okay, it might not have the rip-the-wrapping-paper-off appeal of new toy, but if it helps them graduate with less student loan debt that'll be a true gift. And if you pay income taxes in the state that sponsors the plan, you might even be eligible for a state income tax deduction for your contribution. Check with the state's plan.
