Personal Finance News

Latest News About Personal Finance

Pandemic Accelerated Cord Cutting, Making 2020 the Worst-Ever Year For Pay TV

1 Comment

According to new research from eMarketer, the cable, satellite and telecom TV industry is on track to lose the most subscribers ever. This year, over 6 million U.S. households will cut the cord with pay TV, bringing the total number of cord-cutter households to 31.2 million. TechCrunch reports:

The firm says that by 2024, the number will grow even further, reaching 46.6 million total cord-cutter households, or more than a third of all U.S. households that no longer have pay TV.

Despite these significant declines, there are still more households that have a pay TV subscription than those that do not. Today, there are 77.6 million U.S. households that have cable, satellite or telecom TV packages. But that number has declined 7.5% year-over-year — its biggest-ever drop. The figure is also down from pay TV’s peak in 2014, the analysts said. 

The pay TV losses, as you may expect, are due to the growing adoption of streaming services. But if anything, the pandemic has pushed forward the cord-cutting movement’s momentum as the health crisis contributed to a down economy and the loss of live sports during the first part of the year. These trends may have also encouraged more consumers to cut the cord than would have otherwise.

“Consumers are choosing to cut the cord because of high prices, especially compared with streaming alternatives,” said eMarketer forecasting analyst at Insider Intelligence Eric Haggstrom. “The loss of live sports in H1 2020 contributed to further declines. While sports have returned, people will not return to their old cable or satellite plans,” he added.

Addicted To Losing: How Casino-Like Apps Have Drained People of Millions

Leave a Comment

NBC News spoke to 21 people who said they were hooked on casino-style apps and had spent significant sums of money. The industry is almost entirely unregulated. NBC reports:

Shellz, 37, a nurse from Houston, spends at least two hours a day with her husband playing a casino-style smartphone game called Jackpot Magic. The app offers a variety of typical casino games to play, including their favorite, called Reel Rivals, a game in which players accrue points by playing a virtual slot machine. As in a real casino, players exchange money for coins to bet. Unlike in a real casino, there is no way to win money back or earn a payout on coins. But that has not stopped Shellz and her husband from spending about $150,000 in the game in just two years. She asked to use her in-game username so her family does not find out how much money they have spent on the game. “We lie in bed next to each other, we have two tablets, two phones and a computer and all these apps spinning Reel Rivals at the same time,” she said. “We normalize it with each other.” Jackpot Magic is an app made by Big Fish Games of Seattle, one of the leaders in an industry of “free-to-play” social games into which some people have plowed thousands of dollars. Big Fish Games also operates a similar app, Big Fish Casino. Both are labeled as video games, which allows the company and others like it to skirt the tightly regulated U.S. gambling market. But unlike the gambling market, apps like Jackpot Magic and Big Fish Casino are under little oversight to determine whether they are fair or whether their business practices are predatory. 

NBC News spoke to 21 people, including Shellz and her husband, who said they were hooked on the casino-style games and had spent significant sums of money. They described feelings of helplessness and wanting to quit but found themselves addicted to the games and tempted by the company’s aggressive marketing tactics. Most of the 21 players wished to remain anonymous, as they were ashamed of their addictions and did not want their loved ones to find out about their behavior. A 42-year-old Pennsylvania woman said she felt saddened that she spent $40,000 on Big Fish Casino while working as an addiction counselor. “The whole time I was working as an addiction counselor, I was addicted to gambling and with no hope of winning any money back,” she said. Big Fish Games did not make anyone available for an interview, nor did the company respond to detailed questions. The company has said in previous court filings that only a fraction of the game’s players actually spend money. In a response to NBC News’ inquiries, the company issued a statement saying its games are not gambling and should not be regulated as such.

Keeping Your Finances On Track Following A Personal Injury

Leave a Comment

Sustaining a personal injury can do more than harm your health, it can change your entire life. According to Newswire, more than 700,000 personal injury claims are filed every year in The States. Those who sustain a personal injury so severe that they’re unable to continue working can be awarded millions, just as James T. Mitchell discovered. In April this year, he won in excess of $5 million following two workplace injuries which prevented him from being able earn any income. Regardless of how much you are awarded, it’s essential you plan your future finances to prevent you wasting your compensation on extortionate medical bills and day to day living expenses.

File a legal claim

According to Arbill, 3.3 million people suffer a workplace incident which they may never recover from, such as head and brain injuries, therefore, if your injury could have been prevented and there is evidence to support that a third party was at fault, then you should instruct a personal injury attorney to start legal proceedings. Your attorney will fight to get justice for you and to prevent a similar incident occurring to anyone else, but, most importantly, they’ll seek compensation as a form of settlement. America’s highest ever personal injury claim saw $150 billion paid out to the claimant, according to ABC Money. Each state has a cap on the amount of non-economic damages that can be awarded to an individual, and in medical malpractice cases the federal government have capped damages at $250,000. Once you receive your payout, ensure you spend and save it wisely. Bear in mind that with your earning potential being limited for the foreseeable future you need to make the cash last so think about setting yourself a set amount to spend each month to ease any financial burden.

Get a second opinion

Following your injury you may be on multiple types of strong medication which causes you to become easily confused and which makes it difficult to concentrate, especially with something as complex as numbers. Rather than struggle in silence, ask for help from friends or family who’ll be able to review your outgoings, help you make cutbacks by speaking to companies such as your phone and television providers for you and advise on how best to proceed. It’s also worth seeking the advice of a financial advisor as they’ll have experience in dealing with people who have been in similar situation and their wealth of knowledge will help you get on top of your finances.

Claim what you’re owed

eHealthInsurance reports that the average American will pay a monthly health insurance premium of $321 per month, therefore, make sure you utilize your policy. Depending on your level of cover, they’ll help to pay your medical bills and will give you a lump sum of cash due to you being unable to work as a result of your injury. You may be reluctant to turn to benefits to get by, but it’s important to remember that your injury isn’t your fault and that what’s more paramount is keeping a roof over your head and your finances in good health, so you must look into and apply for any unemployment benefits that you’re entitled to. And if you’ve lent money to friends and family in the past, now is the time to claim back what you’re owed. So long as you explain your situation to your loved ones, most will be than happy to make arrangements to get your cash back to you.

A personal injury which impacts your ability to work will leave your finances in tatters if you don’t take action to keep on top of them. Therefore, you should file a legal claim in order to win compensation, ensure you request what you’re owed from various parties and seek the advice and help from your loved ones and a financial advisor to keep your finances in good order while you adjust to live with your injury.

Young Americans Have Used 33% Of Their Total Savings During COVID-19

Leave a Comment

The coronavirus shutdowns have had a dramatic impact on the broader economy (if not the stock market, which is almost back to all time highs) and few have been hit as hard as young Americans such as Millennials and Gen Zers. Tyler Durden writes on ZeroHedge:

A recent survey from Travis Credit Union seeking to learn more about the money-saving habits of young Americans and how Covid-19 and the looming recession has impacted their savings, polled nearly 2,000 Millennials and Gen-Zers and here’s what they found:

* 99% said that saving money is important to them.

* 39% of young Americans have had to dip into their savings during Covid-19 and have used an average of one-third of their total savings

* The top reasons for using savings during Covid-19: Food, utilities, mortgage or rent, credit card debt, and student loans.

* 73% of respondents said Covid-19 will shape their financial habits moving forward.

With Tax Returns Around The Corner, Documents Will Help Workers Prepare

Leave a Comment

Tax returns were due in on July 2015, but given the circumstances, the federal government have provided a three month extension. Despite this, commentators still expect up to 1.4m to fail to provide a return, which CNBC note will result in a 5% charge and – worse – funds that could be redistributed to the taxpayer being withheld by the IRS. Taxes can be a difficult process, but with a little planning and dedication, they can be made easy. At the heart of these preparations is a simple, but crucial, concept – documents.

The basics – W2 and 1099-G

Aside from your basic details – name, address, social security – the absolute must-have document, supported by evidence throughout the year, is the W2 (for employed people) and the 1099-G (for unemployed people). While these change in need from case to case, and self-employed professions will require further evidence, they do provide the basis for income assessments. When you receive this form from your employer, or start filling it out yourself as a self-employed person, use your time to diligently check for errors. According to US News, the correction process when amending these forms can be time-consuming and costly for both the IRS and taxpayer – get it right first time.

Unique income

Keep a thought for any income you have made through non-formal employment. This can include hobbies, online selling and gambling. To take the latter, Investopedia outline how gambling income can be taxed – anything over $1,200 should be issued a form when paid out by the casino in question. If not, the gambler must still report everything to the IRS. Keep an eye out for these small sums which, over time, can add up to a notable untaxed pot. It will improve the accuracy of your report and keep you out of the radar of IRS investigators, ultimately leading to your tax affairs being in order and timely.

Securing your dues

Aside from the legal requirement to fill out tax returns, the process of tax assessment can provide substantial savings. Deductions can range from K-12 educator expenses and charitable donations through to federally declared disaster rebates and home improvements for energy savings subsidies. Essentially, there is a huge range of things you can undertake in daily life that the government will allow you a refund for. The best way to keep organized here is to keep documents concerning any changes or purchases you make to support the home or business; when compared against the rebate text and criteria, you may be owed costs that you would not have picked up on otherwise. There is no law against making the request in good faith, even if the IRS deny it.

Careful management of your tax affairs is crucial to your long-term financial health and can, indeed, have an impact on your mental and physical health. Having thorough documentation to support your tax process is key in this. Keep your documents; make yourself aware of your rights; and be timely in your filing process.

Americans Regret Lack of Emergency Savings During Pandemic

Leave a Comment

A new survey finds that Americans regret their lack of emergency funds to withstand the economic crisis caused by the pandemic.  The Bank Rate survey found that 23 percent of Americans rate that as their biggest regret, followed closely by not having enough retirement savings.  Having too much debt came in at number three. Fox 5 NY reports:

And when it comes to getting finances in order while moving forward, the top financial priority was paying down debt followed by saving more for emergencies and a large number of people who didn’t know what their top financial priority should be.

Other priorities included saving more for retirement, living within their means, and finding a more stable income.

By age group, not enough emergency savings was the top financial regret for millennials (24 percent) and Generation X (25 percent). In contrast, not enough retirement savings was the top regret for boomers and the Silent Generation who expressed regret.

20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative Balance

Leave a Comment

The note found on his computer by his parents on June 12, 2020, asked a simple question. “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?” The tragic message was written by Alexander E. Kearns, a 20-year-old student at the University of Nebraska, home from college and living with his parents in Naperville, Illinois. Earlier that day, Kearns took his own life. Forbes reports:

Like so many others, Kearns took up stock investing during the pandemic, signing up with Millennial-focused brokerage firm Robinhood, which offers commission-free trading, a fun and easy-to-use mobile app and even awards new customers free shares of stock. During the first quarter of 2020, Robinhood added a record 3 million new accounts to its platform. As the Covid-19 stock market swung wildly, Kearns had begun experimenting, trading options. His final note, filled with anger toward Robinhood, says that he had “no clue” what he was doing. 

In fact, a screenshot from Kearns’ mobile phone reveals that while his account had a negative $730,165 cash balance displayed in red, it may not have represented uncollateralized indebtedness at all, but rather his temporary balance until the stocks underlying his assigned options actually settled into his account.

Kearns apparently fell into despair late Thursday night after looking at his Robinhood account, which appeared to have $16,000 in it but also showed a cash balance of negative $730,165. In his final note, seen by Forbes, Kearns insisted that he never authorized margin trading and was shocked to find his small account could rack up such an apparent loss. 

U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

Leave a Comment

The record-long U.S. economic expansion is over after almost 11 years, with what’s likely to be the deepest recession in at least eight decades now under way. The world’s largest economy shrank at a 4.8% annualized pace in the first quarter, the biggest slide since 2008 and the first contraction since 2014, as the need to fight the coronavirus forced businesses to close and consumers to stay home. Bloomberg reports:

The current quarter is likely to be far worse, with analysts expecting the economy to tumble by a record amount in data going back to the 1940s. Bloomberg Economics has projected a 37% annualized contraction, but UniCredit is the most bearish with a 65% estimate.

The first-quarter downturn, reported Wednesday by the Commerce Department, was led by the steepest drop in consumer spending since 1980 and the fastest decline in business investment in almost 11 years.

The worse-than-expected report reveals the wide-scale hit to U.S. output from Covid-19 and the subsequent freezing of economic activity.

“It’s kind of incredible when you think about the fact that the economy was running pretty much on a normal footing for over 80% of the first quarter,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, said on Bloomberg Radio.

U.S. stocks gained amid renewed hopes for a drug to fight the coronavirus, helping investors shrug off the GDP data. The dollar slipped and Treasury yields were lower.

Coronavirus: Worst Economic Crisis Since 1930s Depression, IMF says

Leave a Comment

The coronavirus pandemic will turn global economic growth “sharply negative” this year, the head of the International Monetary Fund (IMF) has warned. Kristalina Georgieva said the world faced the worst economic crisis since the Great Depression of the 1930s. BBC reports:

She forecast that 2021 would only see a partial recovery. Ms Georgieva, the IMF’s managing director, made her bleak assessment in remarks ahead of next week’s IMF and World Bank Spring Meetings. Emerging markets and developing countries would be the hardest hit, she said, requiring hundreds of billions of dollars in foreign aid. “Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020,” she said. “Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.” She added: “In fact, we anticipate the worst economic fallout since the Great Depression.”

Ms Georgieva said that if the pandemic eased in the second half of 2020, the IMF expected to see a partial recovery next year. But she cautioned that the situation could also worsen. “I stress there is tremendous uncertainty about the outlook. It could get worse depending on many variable factors, including the duration of the pandemic,” she said.

Her comments came as the US reported that the number of Americans seeking unemployment benefits had surged for the third week by 6.6 million, bringing the total over that period to more than 16 million Americans.

Quarter Of Americans Have No Emergency Savings In Age Of Coronavirus

Leave a Comment

The U.S. economy is currently facing its toughest challenge since the Great Depression, and millions of Americans suddenly find themselves out of work. Financial experts have long advised people to build a savings account for emergencies, but it’s fairly safe to say that no one saw a widespread economic emergency of this scale coming. We’re all scrambling to adapt, but a new survey is illustrating just how bad the situation is for many Americans. Studyfinds reports:

A total of 1,100 Americans were polled, and one in four (25%) said they don’t have any emergency savings at all. Another 23% only have enough to get by for three weeks. While there is some help on the way in the form of $1,200 government stimulus checks, 42% said they’ll have to immediately spend that money on bare essentials like groceries.

The survey, commissioned by GOBankingRates, also came to a number of other financial findings. Perhaps one of the most eye-opening is the revelation that two-thirds of Americans have either already been financial burdened by the coronavirus crisis (36%) or expect to be soon (28%).

Jobless Claims Hit Record 3 Million Due to Wuhan Virus

Leave a Comment

Americans displaced by the coronavirus crisis filed unemployment claims in record numbers, with the Labor Department reporting Thursday a surge to 3.28 million. CNBC reports:

The number shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982. The previous week, which reflected the period before the worst of the coronavirus hit, was just 282,000.

Consensus estimates from economists surveyed by Dow Jones showed an expectation for 1.5 million new claims, though individual forecasts on Wall Street had been anticipating a much higher number. The surge comes amid a crippling slowdown brought on by the coronavirus crisis.

Businesses across the country have shut down amid a policy of social distancing aimed at keeping the virus’s growth in check. Individual states have reported websites crashing amid a rush to file.

Coronavirus Reveals Financial Irresponsibility of Americans

Leave a Comment

How long could you sustain your household if you were to stop earning income? If you are like most Americans, the answer is not for long. Only 40 percent of Americans can afford an unexpected $1,000 expense with their savings. The Hill reports:

In fact, nearly 80 percent of workers are living paycheck to paycheck. It is no surprise that the probability of an economic recession brought on by the coronavirus pandemic caused many to worry.

In major cities such as Boston, New York, Los Angeles, and San Francisco, restaurants and businesses have been ordered to close. For many hourly workers, this means no paychecks in the coming weeks. Almost one in five Americans have already lost their jobs or have reduced hours. At the same time, salaried workers are concerned about job security, as mass layoffs at numerous companies loom. While the situation is understandably stressful for every person affected, it serves as a sobering reminder that Americans must learn to live within their means and regularly save money.

The need for all Americans to be able to sustain themselves for at least a few months on savings is accentuated during a time of crisis. This means planning ahead when times are good.

IRS to Delay the April 15 Tax Payment Deadline by 90 Days

Leave a Comment

The IRS will postpone the April 15 tax deadline by 90 days for millions of individuals who owe $1 million or less and corporations that owe $10 million or less, Treasury Secretary Steven Mnuchin said Tuesday in a press conference. USA Today reports:

To be sure, Americans still have to meet the April 15 deadline if they are expecting a refund or are requesting a six-month extension, but they can defer payment for up to 90 days beyond that.

“We encourage those Americans who can file their taxes to continue to file their taxes on April 15 because for many Americans, you will get tax refunds and we don’t want you to lose out on those tax refunds,” Mnuchin said. “We want you to make sure you get them.”

“All you have to do is file your taxes,” Mnuchin said. “You’ll automatically not get charged interest and penalties.”

Federal Reserve Cuts Interest Rates to Zero

Leave a Comment

The Federal Reserve, saying “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” cut interest rates to essentially zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus. CNBC reports:

The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consumer rates, will now be targeted at 0% to 0.25% down from a previous target range of 1% to 1.25%.

Facing highly disrupted financial markets, the Fed also slashed the rate of emergency lending at the discount window for banks by 125 basis points to 0.25%, and lengthened the term of loans to 90 days…

The quantitative easing will take the form of $500 billion of Treasurys and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment…

The Fed added in its statement that it “is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.”

Trump to Waive Interest on Federal Student Loans ‘Until Further Notice’

1 Comment

President Donald Trump on Friday said that he wouldeliminate the intereston federal student loans “until further notice” as part of a package of emergency executive actions designed to address the economic fallout from the coronavirus pandemic. Politico reports:

The unprecedented move will provide relief to the more than 42 million Americans who owe more than $1.5 trillion in outstanding federal student loans…

It’s not clear how much money the interest waiver will save borrowers, but it could be billions of dollars, depending on how long the Trump administration keeps the policy in place. In fiscal 2019 alone, the Education Department reported that it charged more than $100 billion in interest on all federal student loans…

The Education Department on Friday was still determining the mechanics of how to carry out Trump’s announcement.