Shelter is one of our basic human needs. A home protects us from the elements and predators, provides a sense of well-being and intimacy, and secures our social status in the community. In many ways, a house or shelter represents and defines the quality of life we experience.
Unfortunately, housing costs are the single greatest expense for an average family, according to the Bureau of Labor Statistics (BLS). In 2015, housing costs represented 19.1% of total household expenditures in 2015. That figure doesn’t even include related expenses including property taxes, insurance, or utilities.
For generations, purchasing a home was considered almost risk-free, the value of the home certain to grow over time. Many Americans discovered in the 2008-2009 recession that home prices could decline. According to the National Center of Policy Analysis, more American families lost their homes in 2008 (10 million) than in the 1930s Depression and Dust Bowl.
Affordability should be the primary factor in determining the place and size of your home. Here are some actionable tips to help keep your costs down.
Reducing Your Major Housing Costs
Controlling your housing costs is essential if you want to live within your means. The following tips will help you manage the expense.
Who knows the Evil that lurks in the hearts of men?In May 2017, more than 230,000 computers around the world were taken hostage by the WannaCry malware worm. Known as ransomware, the unknown developers surreptitiously gained control of computers running the Microsoft Windows operating system, encrypted the users’ data, and demanded a payment of $300 in untraceable bitcoins to unlock the system and access information.
Cyber-attacks occur across borders and range from simple email “phishing” efforts to sophisticated software programs that quickly expand the attacks and hide the identity of the perpetrators. Motives of cyber criminals range from vanity (proving one’s technical expertise) to illegal profit. Some attacks are politically motivated while others are rarely publicized, state-sponsored sabotage. The attacks affect individuals, businesses, and governments.
According to a report by the Ponemon Institute, a successful hacker earns $14,711 for each attack and has 8.26 successful attacks per year. Sophisticated hacking tools are readily available on the Internet, especially the Dark Web. The criminals and the curious are stepping up their efforts to invade your privacy and steal your money. What actions can you take to harden the target and protect your assets?
What actions can you take to harden the target and protect your assets?
Understand the Enemy
Malicious software can wreak havoc on your computer or operate covertly in the background. Malware (The Creeper Worm) was first detected on the ARPANET, the forerunner of the Internet, in the early 1970s. Since that time, spurred by the growth of personal computers and connected communication networks, many different types of malware have appeared, including:
Trojans: The most common malware is based on the Greek strategy to invade Troy: the Trojan Horse. In this case, users are tricked into allowing an outsider unlimited access to their computers by clicking on an unsafe Internet link, opening an email attachment, or completing a form. By themselves, Trojans are delivery vehicles, providing a “backdoor” into a computer or network. As a consequence, they open the door for malicious software to steal data, compromise operating systems, or spy on users. Trojans do not replicate themselves and spread to other devices like a virus or a worm. Viruses: Just as a biological virus is transmitted to unsuspecting hosts, a computer virus replicates itself and infects new computers, then modifies operating programs to malfunction. Some have called viruses “diseases of machinery,” a term first coined in the 1972 futuristic film “Westworld.” One of the early viruses – Love Letter – delivered by an email with the subject line “I Love You” and an attachment “L0VE-LETTER-FOR-YOU.TXT” – attacked 55 million computers worldwide and caused an estimated $10 billion in damage, according to Wired magazine.
Whatever your beliefs, owning and operating an automobile is expensive. For those who might be thinking about giving up their vehicles entirely, consider the pros and cons of living without a car. Cutting the strings of ownership is easier if you live in one of the ten best cities to live without a car.
For most Americans, transportation costs are a significant part of everyone’s budget. Few people are fortunate enough to live within walking distance to work, shops, schools, and churches. According to the BLS, transportation costs run between 15% to 20% of a household budget. But there are a few tricks you can use to cut down on transportation expenses.
How to Save on Your Transportation Costs
1. Walk When Possible
Someone once said a pedestrian is a person who just parked their car. It is, unfortunately, true that Americans are more likely to drive a car than walk, even for short distances. Research from the University of Glasgow suggests most people of all ages prefer to drive any distance greater than would be covered by a 15-minute walk, especially if they own an automobile and parking is readily available. According to a National Household Travel Survey, the majority of trips under a mile are in an automobile.
Walking is available to everyone in most environments. In addition to saving money on automobile trips, walking is one of the easiest and most inexpensive methods to achieve good health. Tom Hodgkinson, a British writer and journalist, claims the biggest benefit of walking is the freedom to think: “When walking, you see things that you miss in a motor car or on the train. You give your mind space to ponder.”
Atlantic Magazine asserts that Millennials are the “best-educated generation in American history,” with more than a third holding a bachelor’s degree or higher. Nevertheless, they may become the first generation of Americans to be worse off than their parents, with lower incomes, more debt, and higher poverty rates.
To succeed, Millennials will need some major preparation, especially considering the world around them is changing constantly. This article will answer three questions that are critical to the success of every Millennial:
Which obstacles will this generation face during their careers?
Who can Millennials trust for financial advice?
What are the most important, time-tested strategies for building wealth?
Millennials Face Mounting Challenges
The challenges facing young people born between 1976-1996 are unlike those faced by any previous generation. The workplace of this generation has drastically changed from the one encountered by their grandparents and parents:
Slower Economic Growth
For the working careers of most Millennials (2010-2060), economic growth measured by gross domestic product (GDP) will average 2.08% annually, according to projections by the Organization for Economic Co-operation and Development (OECD). This rate is less than half the rate of GDP growth of 6.86% experienced in the previous half-century (1960-2010) calculated from figures supplied by the Federal Reserve Bank of St. Louis.
Increased Skill Requirements
Physical work requiring little to no formal training is quickly disappearing as intelligent machines assume more of the tasks formerly done by humans. According to figures compiled by the Brookings Institute, the manufacturing sector’s share of GDP accounted for 12.1% of annual real GDP during the period 1960-2010, while its proportion of the workforce fell from approximately 25% to 8.8%.
Expanded Workplace Automation
Routine tasks are increasingly becoming mechanized. Some experts found that 47% of workers in America had jobs at high risk of automation. The jobs at risk include taxi and delivery drivers, receptionists, programmers, telemarketers, and accountants.
Reduced Employee Benefits
Defined contribution retirement plans have replaced defined benefit plans (pensions), while more employers are transferring health care costs to employees in the form of higher insurance premiums, co-pays, and limited coverages.
Extended Nontraditional Employment
Contract labor is replacing employees as companies seek to lower fixed costs and increase flexibility. One report estimates that more than 40% of the American workforce – 60 million workers – will be self-employed as freelancers, contractors, or temporary employees by 2020.
Escalated Income Inequality
The historical link between productivity and pay is disappearing, exacerbating the disparity between the “haves” and “have-nots.” In 1970, almost two-thirds of Americans were considered middle class, reflecting the link between productivity and pay between 1948 and 1973. Although productivity has continued to increase, about half of American families were considered “middle class” in 2014, according to the Pew Research Center. Rising income inequality is likely here to stay.
Fragile Social Programs
The survival of social safety nets, such as Social Security and Medicare is uncertain as Federal and local governments wrestle with unprecedented national debt levels. Simply put, neither Social Security nor Medicare is guaranteed for future beneficiaries without significant changes in the programs.
Eugene Steeple of the Urban Institute predicts that Millennials are likely to experience cuts in benefits for themselves and their children, higher taxes, and reduced government services. This is partially a consequence of financing much of America’s growth and increased standard of living during the last 50 years with borrowed funds. According to Pew Research, most American households are vulnerable to financial disaster:
1. Family Income Is Increasingly Volatile. More than 40% of families experience an income gain or drop of more than 25% every two years. While drops and gains have balanced out in recent years (about the same number increasing income as those losing income), only two-thirds of those families suffering a drop recover their previous income level within the next decade.
2. Emergency Savings Are Virtually Nonexistent. Most households (75%) lack sufficient emergency funds to replace their income for a 30-day period. The top quarter of households have savings to cover just 52 days of income. Liquidating their investments and retirement funds would increase this to an estimated 98 days of protection. In other words, three-quarters of American families could cover only four months of their income (without selling their homes) if a major economic shock occurred.
3. Almost Half of Families Spend More Than They Earn. As a consequence, they are unable to save and rely on borrowing to make ends meet. One in 11 Americans now pays more than 40% of their income on interest and debt repayment.
In addition to an uncertain economic future, Millennials begin their working careers with greater student debt than any previous generation: $16,500 for a 1999 graduate, rising to $37,172 for a 2016 graduate. In other words, the average Millennial graduate is shackled to a $23,000 ball and chain (the average debt for graduates during the period) that will impact retirement savings, homeownership, and the age of marriage and parenthood.
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Atlantic Magazine asserts that Millennials are the “best-educated generation in American history,” with more than a third holding a bachelor’s degree or higher. Nevertheless, they may become the first generation of Americans to be worse off than their parents, with lower incomes, more debt, and higher poverty rates.