What Your Dad Never Taught You

True Cost of Foreclosure

Pete the Planner — Wed, 03 Feb 2010 13:44:21 +0000

Guest Post by John Stone from Stone Realty

There is a common misconception a lot of homeowners and some agents, including myself until I learned more, that banks want houses. In other words, banks get happy when people fall behind on their mortgage payments, have to foreclose and abandon the house. In all reality, that couldn’t be farther from the truth. Banks want nothing more than for you to stay in your house. You see, banks are in the business of lending money, not taking over real estate. Sounds obvious, but a lot of people don’t understand that.
So, what is the true cost of foreclosure? First, let’s discuss from the banks perspective. If we are talking cents on the dollar, if you sell your house in foreclosure, the bank will get $.30 on the dollar. In a successful short sale, $.70 on the dollar. So, it’s a win-win for the bank to sell your house in a short sale.
Now, let’s talk about the cost of foreclosure to a homeowner. This is much worse. Let alone losing your home completely, foreclosure also affects your credit score, current and future employment and how long you have to get another mortgage. Let’s dive into these a little deeper.
1. Credit Score: If you let your house go into foreclosure, you can expect your credit score to lower from 250 to 300 points. Typically, this will affect your credit score for over three years.
2. Current Employment: Employers have the right to check the credit of all employees. In many cases, a foreclosure is reason for immediate reassignment or termination.
3. Future Employment: Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases challenge employment.
4. Time Frame: A homeowner who loses their home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of five years.
In a successful short sale, credit score lowers by only 50 points, it is not reported on any credit report therefore not challenging current or future employment and the time frame is only two years for a Fannie Mae-backed mortgage. Closing your home in a successful short sale is the best, and in my opinion the only, option a homeowner has if they are falling behind on their mortgage payments.
If you have any other questions regarding this issue, please contact me. Go to my website, and there is a page designated specifically to short sales. Or you can always call me at 317-209-4355.

The $37 experiment

Pete the Planner — Thu, 07 Jan 2010 13:40:24 +0000

Yesterday I asked Facebook and Twitter followers to immediately transfer $37 from their checking accounts into their savings accounts without asking questions. While at first this message was reminiscent of a Nigerian prince asking you to send him a money order in exchange for great wealth, it was actually a Pete the Planner diabolical experiment. How many people would follow these directions? And of those that did, how many people would realize the point of the exercise?

No matter who you ask, I think that everyone would agree that $37 is about as arbitrary a number as you can get. It won’t, in itself, help you retire. It won’t, in itself, replace the brakes on your car if they were to go out. But when you take numerous amounts of arbitrary and insignificant amounts of money and put them together, then you actually start to make financial progress.

Generally speaking, people don’t save money because they forget about saving money. If people are prompted to save money on a random occasion, then they are more likely to see the ease of doing so. At last count, yesterday’s experiment saved nearly $2000 based on those who let me know that they went through with the exercise. That’s pretty decent for such an insignificant and arbitrary amount of money.

The best thing you can do is this: don’t kill kittens. The second best thing you can do is this: setup a reoccurring transfer from checking to savings on a set day every month. Start with a small arbitrary amount of money, and then gradually increase it. For other great tips like this, pick up a copy of 60 Days to Change. I know, that was a choppy segue. Oh well.

Pete The Planner’s Holiday Spending Guide

Pete the Planner — Mon, 14 Dec 2009 13:30:07 +0000

The Holiday’s are upon us. Consider these easy tips to make your holiday spending go a little smoother.

12 or More Fixed Monthly Expenses Each Month. That’s how many the average American has. Don’t get sucked into buying more than you can afford this holiday season by adding another fixed monthly expense to your budget. If you can’t pay for it now or pay it off right away, you can’t afford it.

11 Household Purchases Per Week Limit your household purchases to this many this week. In a normal week, that includes gas, groceries, maybe a meal or two, and a few other expenses. Since you’re spending big for the holidays, cut back on your other purchases to offset your additional holiday purchases. Maybe that means cutting out lunch out or drinks with the guys. If you can limit the number of times you spend money each week, you’ll actually end up limiting the amount you spend each week. Really.

10 Percent of Your Monthly Budgets for Groceries and Entertainment. The average consumer can easily reduce their spending on groceries and entertainment by 10 percent each month. That’s easy money (and more than $50 for most people) that can be put toward holiday purchases. Little differences like having a glass of wine before you go out or sticking to your grocery shopping list add up to significant savings.

9 Things to Look for in Your Free Credit Report. Get a jump on any post-holiday surprises by ordering your credit report now. Once you have it in hand, you should check nine key sections to make sure your credit is a-ok.

8 Extra Cans of Food at the Grocery Store. Charity doesn’t have to be complicated, and don’t assume that you can’t afford it. Little things, like buying a few extra cans of food at the grocery store, sending your gently-used clothes to the Goodwill, or volunteering an hour of your time every week can make a world of difference to a person in need.

7 Steps to Improving Bad Credit. The holidays aren’t an excuse to put off improving your credit. In fact, there’s no better time to start thinking about spending responsibility. Don’t put all of your holiday expenses on your credit card. Don’t max out your card. Spend responsibly and you’ll be building good credit rather than doing damage.

6 Different Debts. So you have six open lines of debt. And maybe you’re about to create another this holiday. Don’t do it! And, more importantly, resist the urge to consolidate! This might seem like a good idea, but actually it will prolong your debt, indebt you to another (the consolidator) and do further damage to your credit score.

5 Percent of Your Monthly Income. That’s how much money you have to spend on your guilty pleasure, be it cars, clothes, wine or home decorating. Don’t think that just because you’re being generous with others this holiday season, it gives you an excuse to be overly generous with yourself. Anything than over five percent is overspending.

4 Major Credit Cards. Seriously? You really need four-or more-major credit cards? If you’re justifying your overspending this holiday by spreading it over multiple cards, you’re kidding yourself. Take your gas card, your back-up card, and that department store card, and cut them up! No one needs more than one credit card, and you should be able to put all of your holiday purchases on it-then pay them off.

3 Tiers of Savings. Don’t let holiday spending-and post-holiday payments-put you off your savings plans. You should always be thinking about saving for short-term emergencies, mid-range big purchases (a car, a home), and retirement.

2 Jobs. Sometimes your full-time job just isn’t enough. If you’re planning on making some major purchases this holiday season that you can’t realistically cover, it might be time for you to consider a part-time job. Snowplowing, babysitting, you name it, a few hundred dollars extra each month can make a big difference and get you out of the hole a lot quicker than you might think possible.

1 Monthly Budget Meeting. It’s a must. Head off financial crisis-or just some big January fights-with your significant others by sitting down to a monthly budget meeting, where you look at your past spending and plan for the future. It’s painful at first, but it only gets easier as you get more financially aware.

Layaway can’t stay away

Pete the Planner — Mon, 19 Oct 2009 13:26:57 +0000

A recent AP story details the plan of Toys R Us to readopt layaway for the holiday season. And I say HOORAYYYYYY. Too over-the-top? Sorry. Yeah.

Layaway is a tool used by retailers to keep customers buying during tough credit times. The practice started back in, you guessed it, the Great Depression. Customers make a down payment on an item, and then continue to make payments on the item prior to taking possession of it when it is paid in full. It is quite the alternative to taking possession of an item prior to actually owning it. Back in the day (1980s), layaway was a huge strategy for retailers such as Marshalls and TJ Maxx. But the strategy disappeared when retailers figured out that they could instead “sell” you a store credit card, give you the item now, and then charge you ridiculous amounts of interest. Not only that, but since the customer had possession of the item, they were much more likely to make the payment on a non-standard payment schedule (read: late). That is why layaway disappeared. Don’t get it twisted.

And this is why layaway has reappeared. Consumers aren’t qualifying for the revolving credit that stores offer, therefore stores are turning to their old friend, layaway. And as you might have guessed, layaway has returned with a newfound sense of benevolence. Hooray, big business is still allowing consumers to buy things they can’t afford (Google search: sarcasm). But I would take layaway any day, over delay of pay.

About Green Candy™

Green Candy™ (www.GreenCandy.com) is an online financial assessment tool that helps Gen Y-ers and Millennials get on the right financial track before the “debt hits the fan.” Introduced by radio personality, comedian and financial expert Pete the Planner (www.PeteThePlanner.com), Green Candy’s ™ various “pods” allow users to assess their financial health and competency in common areas such as Debt, Budgeting, Investing, Charity, Risk Management and Major Purchases, as well as in areas unique to Gen Y. A subsequent series of targeted worksheets, podcasts, tip sheets, and action plans guides them to the financial promise land. Green Candy™: Get in control before the debt hits the fan.

About Pete the Planner

Pete the Planner (www.PeteThePlanner.com) is expert financial planner Peter Dunn’s super-saving alter ego. Peter is an award-winning comedian and rising star in the financial world. Named one of “Indy’s Best and Brightest” in finance in 2007 and media in 2009 by KPMG, Peter was also declared one of NUVO magazine’s “30 under 30 to Watch in the Arts” for comedy. Peter is the author of What Your Dad Never Taught You About Budgeting (2006) and is the host of the popular radio show Skills Your Dad Never Taught You on News Talk 1430 (WXNT). He blogs regularly at www.petetheplanner.com/blog. Pete appears regularly on Fox News and Fox Business as well as various CBS stations. His newest book, 60 Days to Change, is due out in November.

Turn off your overdraft protection

Pete the Planner — Fri, 16 Oct 2009 11:32:50 +0000

Dinosaur chicken fingers will ruin the world

Pete the Planner — Thu, 15 Oct 2009 12:31:13 +0000

Multi Level Marketing Radio Study: Week 2

Pete the Planner — Wed, 14 Oct 2009 18:51:44 +0000

We have completed our study on Multi Level Marketing. I feel we did a good job of staying objective and making judgements on the informations we found. Feel free to send me an email if you have any questions or comments.

Enjoy the podcast.

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Hedge Fund to the rescue?

Pete the Planner — Wed, 14 Oct 2009 16:48:35 +0000

My segment on 24 Hour News 8 on 10/14/09

New report suggests the obvious

Pete the Planner — Wed, 14 Oct 2009 16:11:57 +0000

Don’t get me wrong. I am huge fan of the obvious, and in fact, as a quasi-journalist, I often restate the obvious. So I am pleased to inform you, based on recent study by Equifax, Moody’s, Economy.com, that if you make less than $30k per year you have over a 30% chance of default or delinquency on your mortgage. Wow, that’s refreshing. What is also interesting to note is that you have over a 5% chance of default or delinquency if you make $80k per year.

This just in to the Pete the Planner newsroom….the grass is green.

Be sure to sign up for book updates here. My new book, 60 Days to Change: A Daily How-To Guide With Actionable Tips for Improving Your Financial Life will be available in November.

Part 1 of our show on Multi Level Marketing

Pete the Planner — Mon, 05 Oct 2009 15:47:52 +0000

There has been a tremendous amount of buzz over our latest radio show. Well, here it is. You can judge for yourself whether or not this is a fair assessment of a controversial industry. We would love to hear your comments. Please post comments on this blog, or simply email me at pete @petetheplanner.com

Here is the Podcast. Enjoy

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Green Candy gets some good press

Pete the Planner — Mon, 05 Oct 2009 11:45:02 +0000

The Argus Leader, a newspaper based in the Heartland, recently featured Green Candy in a Sunday column. If you are a frequent visitor to this blog, then you know about the category of spending that we coined The New Necessities.

Check out the article, and let us know what you think. Also, be sure to listen to Your Time with Kim Iverson tonight at 9PM to hear my weekly appearance. You can always check out Kim’s website to find out where you can listen. Thanks again for your support.

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MLM Research Story Starts Unfolding Today

Pete the Planner — Thu, 01 Oct 2009 10:49:07 +0000

After tons of email asking whether I thought MLM companies were legit or a scam, I decided to find out for myself. I have been working on a story on Multi-Level Marketing (Network Marketing) for a couple of months now. I have studied 10 MLM companies and their compensation structures. I have interviewed salespeople, ex-salespeople, and a CEO of an MLM. I have learned a tremendous amount of dos and don’t, and I’m going to share them all with you.

Starting Oct 4th at 11 am on News Talk 1430 AM, I will unravel the world of mulit-level marketing. There is one thing that I am sure of, this is sure to cause controversy. I have been banned from sales rallies, I have been emailed numerous “warnings”, and I have even made some unlikely friends.

I will be previewing my story on Abdul in the Morning (1430 WXNT Indy) on Oct 1 at 8:30 am and Smiley in the Morning at 8:50 am (99.5 WZPL Indy). Tune in.

Impromptu Garage Sale — Who’s In?

Pete the Planner — Wed, 30 Sep 2009 13:47:51 +0000

My neighborhood is having a community Garage Sale this weekend. I saw the sign on my drive to work. I never participate in these sorts of things because I’m generally freaked out by strangers milling around my garage. However, I decided that I would participate this weekend in the name of (financial) science. It’s Eat What You Earn Weekend. Okay, I made that up. But why not?

We are going to use the money we make in this impromptu Garage Sale to pay for dinner on Saturday night. If we make $20, then we eat cheap. If we make $150, then I’ll be calling a cab….kidding.

Do it.

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How to Avoid Overdraft Fees

Pete the Planner — Tue, 29 Sep 2009 19:38:48 +0000

Americans are up in arms over the outrageous overdraft fees that are being charged by banks today. You know how it goes…your account runs out of money, and your bank just punches you in the face with overdraft fees until you replenish your account. Many of us have had that $40 cup of coffee ($4 coffee and $36 overdraft fee). Banks, including Chase, reorder your transactions on any given business day to make sure that bigger purchases clear before smaller purchases. The result: tons of overdraft fees on small purchases. Banks are clearly taking advantage of people who chose not to practice the art of financial awareness.

But don’t get it twisted. I’m not the guy to yell at the blanks, my job is to yell at YOU. I’m not going to ask the banks to stop bailing you out of dumb financial situations. You need to take responsibility for your actions. That being said, I would rather banks simply have your debit card decline, opposed to extend overdraft protection. Here are Pete the Planner’s 5 Tips for Avoiding Overdraft Fees.

1. Know your banks policy- Sounds pretty obvious, but it’s likely that you aren’t operating on a fair playing field if you don’t know the rules. If you are aloud to opt out of overdraft protection, do it. I would rather you be embarrassed by a card decline, then get drilled with hundreds of dollars worth of stupid fees.

2. Count your transactions- Forget overdraft protection for a second, if you don’t know how many times you actually handover your debit card, then you have bigger problems to deal with. You shouldn’t use your debit card more than 10 times per week.

3. Use cash- Old fashion, I know. But it is the ONLY true way to not have overdraft fees. It is the abstinence of the financial world. Awkward….

4. Visit your online banking account frequently- I generally don’t advise that you hover over your money, but if you have an overdraft problem, then be sure to use online banking. Not even the dumbest people in the world would spend money that they see that they don’t have.

5. Communicate with your partner or spouse- Many overdraft fees happen when two people use the same checking account. Be sure to talk about your purchase habits regularly. Communication is the key to accountability, and accountability is what you need.

And don’t forget, don’t rely on the banks to help you. This is your money, and your financial life. You can do it.

Tips courtesy of….me. From my Fox News appearance on 9/29/2009

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Pete the Planner on Fox News Today (9/29/09

Pete the Planner — Tue, 29 Sep 2009 14:25:05 +0000

Be sure to watch Pete the Plannet in Fox News at 2:45 PM est today. I’ll be talking about the huge uproar over Overdraft fees. Find out who is to blame.

Tell your friends. Tell your family. Tell your clergy (sorry, I got carried away)

Do you have a spending addiction?

Pete the Planner — Tue, 22 Sep 2009 12:58:33 +0000

I am obsessed with spending addictions this week. I don’t know why. I talked about it on my radio show, I talked about it on Your Time with Kim Iverson, and I talked about it on The Smiley Morning Show. Many people are compulsive spenders, but that doesn’t mean that they are addicted. I interviewed Harvard trained psychotherapist, Carleton Kendrick, on my radio show. He said that even though a spending addiction is not a physiological addiction, it’s still a serious issue.

I have compiled a list of symptoms that you should consider when trying to self-diagnose.

1. Do you lie to cover up your purchases? Lying about money is a serious problem, and can really damage your relationships.

2. Are your relationships struggling? This could be a sign of your halitosis, but then again it could be a side-effect of your terrible spending habits.

3. Do you just store the stuff you buy? Spending addiction is about the purchase, not about what you purchasing. Therefore, many times addicts will buy things that they don’t even need. Thus, storage.

If you think you have a spending problem, you should really seek help.

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Swedish Retirement

Pete the Planner — Fri, 18 Sep 2009 14:13:43 +0000

Guest blog by Jim Huller, President of Maximum Wealth Advisors

If Sweden Can Do It, Why Can’t We?

About the only thing being discussed these days in Washington is the bitter fight over healthcare reform, meanwhile another looming problem not getting the attention it deserves is Social Security. This side of Hurricane Katrina, it’s easy to forget that a re-elected President Bush set out to use his “political capital” to take on reform of this destined to implode program.

Most politicians would rather not take on the “third rail” of American politics, nevertheless, if we don’t make changes soon there will be no Social Security for the millions of young people who are now paying into the system and would like to receive something in their retirement. For a look at what could be a template for Social Security Reform in the US, I wanted to highlight what Sweden did in the 90’s to take on its similar dilemma. While Sweden is thought of as a liberal nation, legislators on both sides came to the conclusion that private accounts were the best answer.

You might not know this, but Sweden was the first nation in the world to put a government-run retirement system into place. The old system was a tax-financed, pay-as-you-go entitlement program, like what we have with Social Security. Unfavorable demographics began wearing on the plan, so the choice basically came down to raising taxes/cut benefits or give workers private retirement accounts – sound familiar?

While making needed changes, Sweden has put in a safety net that guarantees a minimum amount individuals receive, a floor if you will on expected benefits. As the transition occurs, older workers receive payments from both plans. Workers pensions will be based on the amount of taxes they have paid into the system, giving them an incentive to work. The end result is a plan that lowers taxes, reduces government spending, and provides for a more stable system.

Sweden has abolished the death tax and has a lower corporate tax rate than the United States. If we want to shore up Social Security, and improve our economy shouldn’t we take a page from the Swedish playbook? The longer we bury our heads in the sand, the worse we make it for ourselves.

Bastiat for the 2000’s

Pete the Planner — Wed, 09 Sep 2009 11:17:21 +0000

Guest post by Jim Huller, president of Maximum Wealth Advisors

If you’re like a lot of people out there you have decreased your spending and accumulation of debt, while increasing the amount you have in savings. A few years ago the national savings average dropped down to a negative percentage of income, meaning that the average person owed more than they had. Today out of necessity the average American has become more frugal, but it wasn’t that long ago that spending big was in vogue.

The mentality of “spend it if you got it”, led to those who didn’t to borrow it. Now that the pendulum has swung back to thriftiness – the kind advocated by Green Candy.com – I turn today to the classic tale by Bastiat, with a modern twist, for the wisdom of saving.

Picture two friends, one a spendthrift (Purchasing Fanatic Pete) and the other a prudent man (Coupon Clipping Chip), each of whom will have an annual income of $50,000. Pete has won the lottery, while Chip has inherited his money.

Pete is a big spender, and like Plies, he wants you to know it. He believes if you don’t spend ALL of your money, you will add to unemployment. Who knew spending could be so fun and patriotic at the same time? Purchasing Fanatic Pete loves to go to all the clubs, where he can make it rain. Of course, he has “his people” with him, and showers them with the latest gadgets from Circuit City and Sharper Image; he gives expensive gifts to his friends to “show some love” or “spread the wealth”.

To live large, Purchasing Fanatic Pete has to dip into his capital. But so what? If saving is a sin, dissaving must be a virtue; and in any case he is simply making up for the damage being done by the saving of his tightwad friend Coupon Clipping Chip.

Everyone knows and loves Pete. Coupon Clipping Chip though, isn’t so well known. He rents videos from Netflix and drives a Toyota. Whereas Pete spends all of his $50,000 (and then some), Chip lives modestly and only spends half of his $50,000, and banks the rest. Since most people only see what’s in plain view, they assume Chip is adding less than half as much to employment as Pete and the other $25,000 is as useless as if it wasn’t there.

Of Chip’s $25,000 leftovers, his short-term savings goes into the bank, allowing the bank to lend it to businesses on short term for working capital. With his long-term savings Chip invests his money in stocks, bonds, or real estate. When Chip’s money is invested (directly or indirectly) it is used to buy or build capital goods—houses or office buildings or factories or ships or trucks or machines. All of these projects puts as much money into circulation, and adds to employment, as much as Pete’s spending sprees do.

“Saving,” is another form of spending. The difference here is that the money is turned over to a corporation to spend on means to increase production, which is what leads to lasting employment. But most people don’t see this activity directly, and only notice the big tips our friend Pete hands out.

A dozen years roll by and Purchasing Fanatic Pete is bankrupt. He returns his Hummer to GM (who also did a poor job of handling its business), but is unable to return his worthless trinkets to the stores he used to patronize – they’re gone now. Pete muddles through town, saying “I used to be somebody”; he is viewed as a failure. He turns to begging from Chip, and GM goes begging from the government.

Meanwhile Chip has continued his spending and savings regiment, and is not only providing more jobs than ever, (because of his income through investment has grown), but his investments have helped to provide better-paying and more productive jobs. His capital wealth and income are greater because of it.

Coupon Clipping Chip has added to the nation’s productive capacity and Purchasing Fanatic Pete has not. Therein lies the problem with our current state of affairs: we’ve had too many Petes and not enough Chips. Now that the party is over, what we need is a return to sensible economic policies – we need to encourage productivity and savings. We also need to teach the next generation.

Clunkers is over but the effects aren’t

Pete the Planner — Fri, 04 Sep 2009 12:24:31 +0000

I’m excited for the phrase Cash for Clunkers to go away. I want it to rest snugly between Shock and Awe and Wall Street vs Main Street in the cliche graveyard. If nothing else, I want to make sure it is nowhere near WAAAASSSSSSUUUUUP. But I digress. I was a big fan of Cash for Clunkers for a few different reasons, but I feel that there are going to be nasty side effects.

But first, here’s why I liked it. The stimulus money that was supposed to…well…stimulate the economy was wasting away doing nothing until Cash for Clunkers came along. I know that it is hard to believe that the government struggled at spending money, but in fact, spending money to stimulate the economy is challenging. There is what the insiders like to call “red tape” (I’m kidding of course, everybody calls it that. I was watching a crappy news program last night, and the host said the phrase “what the insiders like to call inflation”. This was possibly the stupidest thing that I had ever heard, and I vowed to use it in a post). Anyway, Cash for Clunkers cut through the spending red tape. Although there was plenty of red tape involved with Cash for Clunkers, just ask a car dealer.

Another reason that I liked Cash for Clunkers is that it spurred the debate about buying American. Hear me out. I have never understood the concept of buying a domestic car in lieu of an import. The argument for buying American is: we need to keep money in America, and quit supporting “the other side”. There are some major flaws in this line of thinking. First of all, there are Toyota and Honda plants all over the US that employ thousands of Americans (our neighbors). Second, there are thousands of Toyota and Honda dealerships all over the nation that also employ thousands of Americans (our neighbors). Therefore, I am not going to discriminate between providing a living for one of my neighbors vs another.

Okay. Here is why clunkers is jacked up. Eric Halovrson, the local CBS anchor on 24 Hour News 8, recently interviewed me for his blog post. This is what he wrote that I said (yes, I’m a terrible writer):

“Clunkers messed with the natural cycle of supply and demand. Supply and demand will find its balance, therefore there will be a huge period of depressed demand.

On the flipside (per your question) There has been a decrease in the supply of peoples’ disposable income. Therefore the natural balance will be found. That means they will be forced to spend less over the holidays, or they will increase their debt. Either result is an indirect side effect of cash for clunkers.”

Have you ever considered the implications of messing with natural demand? It’s like poking a sleeping bear with a sausage (don’t ask). Anyway, I agree with what Eric said that I said. I think that makes a majority. No?

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About Green Candy™

Green Candy™ (www.GreenCandy.com) is an online financial assessment tool that helps Gen Y-ers and Millennials get on the right financial track before the “debt hits the fan.” Introduced by radio personality, comedian and financial expert Pete the Planner (www.PeteThePlanner.com), Green Candy’s ™ various “pods” allow users to assess their financial health and competency in common areas such as Debt, Budgeting, Investing, Charity, Risk Management and Major Purchases, as well as in areas unique to Gen Y. A subsequent series of targeted worksheets, podcasts, tip sheets, and action plans guides them to the financial promise land. Green Candy™: Get in control before the debt hits the fan.

About Pete the Planner

Pete the Planner (www.PeteThePlanner.com) is expert financial planner Peter Dunn’s super-saving alter ego. Peter is an award-winning comedian and rising star in the financial world. Named one of “Indy’s Best and Brightest” in finance in 2007 and media in 2009 by KPMG, Peter was also declared one of NUVO magazine’s “30 under 30 to Watch in the Arts” for comedy. Peter is the author of What Your Dad Never Taught You About Budgeting (2006) and is the host of the popular radio show Skills Your Dad Never Taught You on News Talk 1430 (WXNT). He blogs regularly at www.petetheplanner.com/blog. Pete appears regularly on Fox News and Fox Business as well as various CBS stations. His newest book, 60 Days to Change, is due out in November.

Further Evidence That IU Blew It

Pete the Planner — Thu, 03 Sep 2009 16:52:42 +0000

A new article in the Wall Street Journal suggests that college students are borrowing more money than ever before. Students are not only borrowing more money, but more students are borrowing in general. Per the Journal, this is having more severe implications than just the obvious burden of debt. Students are not buying homes or starting families as soon as they use to. This is causing ripples in the macro-economy.

In addition to the debt concerns, the article suggests that colleges and universities are misreading the situation as a whole.

Also, the rising levels of borrowing may ironically be contributing to the accelerating cost of college, say some college-finance experts. Loans can give colleges an artificial sense of a family’s ability to pay tuition. To some extent, that false sense of security gets built into the assumptions schools make when setting prices, say experts. The idea is that as prices rise, families borrow more and more, spurring prices to rise further, which in turn requires more borrowing.

Ohhhh SNAP!!! I was right. In a blog earlier this week, I suggested that IU is missing the boat with their “tuition credits” solution. Their system gives a “discount” to full time B or better students. This practice is short sited, and it will only serve to put the average student at a bigger disadvantage.

You don’t have to agree with me, but if you don’t…take it up with the WSJ.

And I’m out.