Paying for Cars, and Paying, and Paying
For the first time, the majority of new car loans now stretch at least 5 years. As reported in the Washington Post on 5/4, 55% of today's new car loans are for 60 months or more - up from just 22% in 2000. The trend toward longer financing periods has also increased the number of "upside-down" car owners - those who owe more on their vehicles than the vehicles are worth. In 2005, 33.5% of people buying cars with a trade-in owed more on their trade-ins than they were worth - up from 25% in 2001.
Matt's View
According to industry figures, the average new car "reliability" is 13 years and 145,000 miles. However, the average trade-in is less than 4 years old and has less than 55,000 miles. Transportation is one of the biggest expenses for most of us. The best way to get the most out of our transportation spending is to keep our cars for a long time. If you're currently making payments on a car, once it's paid off the best advice is to keep making the payments - sending the money to a savings account so you can buy your next car with cash.
TV Execs Want to Give TiVo the Heave-Ho
An increasing number of people are taking steps to avoid watching TV commercials and, of course, that isn't sitting well with TV networks and their advertisers. An article in the New York Times on 5/17 reported on the growing tensions between the two groups because of the "TiVo problem." Today, one in eight households own a digital video recorder (DVR), allowing them to watch TV shows without the ads. By 2008, one in four households are expected to have such devices. And now that Nielsen Media Research measures the number of households who digitally record shows and then watch them later, advertisers are using that information to negotiate lower ad rates.
Matt's View
One "solution" the networks are turning to more frequently is "Branded Entertainment," otherwise known as "product integration." This includes mentioning brands in a show's dialogue, placing products in shows, and having a product become an integral part of the plot (think Apprentices working on new marketing ideas for branded products).
Product integration has been around since well before Reese's Pieces appeared in E.T. And while I'm generally resistant to what often seems like the wallpapering of our culture with product pitches, there are some types of product placements I don't mind. On the Extreme Makeover Home Edition episodes I've seen, for example, I've never been offended by what usually seems like fairly brief displays of logos from companies providing materials to build homes for people in need.
What's your point of view on "product integration?" Has it gone too far, or is it okay? Send me your opinion by clicking here .
Just Starting Out, But Already Behind
A 5/14 ABC News story reported that students now graduating from college with a bachelor's degree are beginning their careers with an average of over $17,000 of debt. And that's forcing some – especially liberal arts majors – to forgo the idealism of their intended career in favor of better-paying jobs. Two other news organizations offer some help. U.S. News & World Report provides numerous good ideas for paying for college or paying off student loans here , and Kiplinger's offers an often overlooked idea: a stint of public service work in exchange for some forgiveness of student loans .
Matt's View
Believe it or not, there are ways to go to college without racking up loads of debt. If your kids are still in diapers, think 529 plans. If they're older and you (or they) don't have much in savings, think community college for the first two years, or look into co-op programs in which students go to school one term and then work at a job in their chosen field the next term. Finding ways to minimize debt when paying for college takes some time, requires some creativity and often involves some level of compromise. But it sure beats having your kids start their careers underneath a pile of bills.
Baby TV
Coming soon to a cable provider near you: the first 24-hour TV channel for babies. That's right – babies. On 5/11, CBS News reported that BabyFirstTV, a commercial-free network aimed at children 6 months to 3 years old, soon will be available for $9.99 per month. Offering everything from sign language training to games, one of the network's founders claims that watching TV together helps inspire the bond between parent and child.
Matt's View
Aside from the irony that this story was reported by a TV news organization, the more important point is that the American Academy of Pediatrics recommends no TV watching at all for children under the age of two. None. Zero. Zip. The Academy points out that the first two years of life are especially important for the proper growth and development of a child's brain. What young kids need most, according to the Academy, is a lot of positive interaction with other children and adults. For older children, the Academy recommends limiting TV watching to one or two hours per day.
Of course, TV has its merits for us older kids (how else could we catch the Masters golf tournament?). But there's a growing body of research quantifying the fact that the more TV a person watches the higher their caloric intake and, interestingly, the lower their savings.
Born to Buy
Every parent of kids who are not out on their own yet should read “Born to Buy.” Author Juliet Schor, whose previous books include “The Overworked American” and “The Overspent American,” presents a compelling look at the materialistic attitude of...
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“What the Bible has to say about money is not often heard in British churches, so it was a real joy to have Matt Bell come over for a series of talks and workshops. In a society where many inside and outside the church are drowning in debt and financial wisdom is in short supply, Matt offers a much-needed biblical corrective that is full of hope and joy. I wholeheartedly endorse his work and look forward to his next visit to these shores!”