Every day, while 49 percent of respondents in the survey carry as little as $20, or even less. Greg McBride, senior financial analyst for Bankrate.com, doesn’t believe we are ultimately moving toward a cashless society but said we may be getting closer to it.
“Stagnant incomes have taken a toll on a lot of household budgets,” he said.
Only 7 percent of Americans are packing $100 or more on a daily basis, according to the survey.
“We did find, not surprisingly, that women are more likely to carry less cash than men,” McBride said.
The poll said 86 percent of women carry less than $50 with them every day. That’s compared to 70 percent of men.
McBride believes we will still need cash for certain daily transactions. He said there may be those odd encounters with a bellhop or some other sort of service personnel where plastic does not cut it.
For more highlights of Bankrate.com’s May 2014 Financial Security Index, click here. Read More: Survey Says: We’re Carrying Less Cash [AUDIO] | http://nj1015.com/survey-says-were-carrying-less-cash-audio/?trackback=tsmclip
When it comes to getting ahead in the world, a lack of savings can be a big hurdle, especially for low-income families. Most don’t have enough money set aside for emergencies, let alone for college or a house. Some people think the answer is to make savings more fun, like the lottery, with the chance to win big prizes.
It’s called prize-linked savings, something that’s been available in Great Britain for decades. Now, it’s starting to catch on in the United States.
One of the newest programs is called SaveYourRefund, launched recently by a nonprofit group called Doorways to Dreams. It’s one of many organizations trying to find ways to encourage low- and moderate-income people to save more, especially at tax time. For some people, their federal tax refund is the biggest check they’ll see all year.
So the group is offering one $25,000 grand prize and 10 weekly $100 prizes for those who agree to put some of their tax refund into savings, using Form 8888 on their tax return. The program is being promoted especially at free tax preparation sites that cater to low-income working families.
Joanna Smith-Ramani, of Doorways to Dreams, says for these families, even a little savings can make a big difference.
“At a basic level, people need savings to get them through even the smallest of financial shocks or their life just goes into total chaos and catastrophe,” Smith-Ramani says.
Just one unexpected bill, she says, can set things off.
In Britain, ‘Savings With A Thrill’
Actor Roger Moore, who played James Bond, poses for a photo promoting Britain’s Premium Bonds program.
National Savings and Investments
The United Kingdom has had a prize-linked savings program for decades, and its success has drawn the attention of those interested in expanding savings among low- and moderate-income families in the U.S.
Introduced to Britons as “savings with a thrill,”the Premium Bond program was started in 1957 to encourage savings and fight inflation.
But instead of getting interest on their accounts, investors get a chance to win a prize. Individuals invest a minimum of £100 (about $150) to enter a raffle for monthly tax-free prizes, ranging from £25 to £1,000,000. Every £1 invested is another chance to win and over a million people win each month.
The bonds are extremely popular. Nearly 40 percent of Britons held them in 2006. The average bondholder invested the equivalent of about $2,330. Today, there are close to $70 billion in total holdings.
The program is also cloaked in a bit of British “Bond-like” intrigue.
Winners of the £1 million jackpot get a visit from an anonymous individual identified only as “Agent Million,” who informs winners confidentially that they have won the jackpot. Agent Million also advises winners on investments and other options for handling the money.
In a 2012 interview with the Daily Mail, the woman who held the Agent Million job said it was great to see people’s reactions when she gave them the good news.
“It can be emotional and a lot of people cry. One of my favorites was a woman who had just sold her house as she couldn’t afford to keep it — and then with the news, her financial worries were gone.” she told the paper.
— Andrew Small, NPR
“Your car breaks down. You can’t pay for it. You can’t access other credit. Your family can’t help you. How are you going to get to work?,” she says, adding that could then lead to loss of a job.
But getting people with so little money to save can be a challenge.
“I need every penny, I need every penny, ” says Baltimore truck driver Wilbert Braxton, who’s waiting for free tax help at a site run by the Baltimore CASH Campaign (the acronym stands for Creating Assets, Savings and Hope). He says he tries to save money, but always needs it before too long.
“Bills, bills, and bills. You know, that’s my life. I work and pay bills. I got two kids in college. They need everything. You know, loans have to be paid back,” he says, adding that he also has car payments to make.
And his comments are pretty common.
Still, research shows that low-income people, who might think they can’t save, do spend a disproportionate share of their income on lottery tickets and gambling, on the off chance they’ll hit it big. And it’s that desire to win that proponents of prize-linked savings are trying to harness.
Maya Gaines, with the Baltimore CASH Campaign, tells her clients that they can do both — save and maybe win — if they split off some of their tax refund into savings.
“If you split it, you get entered to win this contest, this amazing contest, over $25,000. I mean who doesn’t want to enter a chance to win $25,000?” she tells 62-year-old Carlos Jordan.
At first, Jordan is skeptical. But then, about an hour later, he’s changed his mind. His tax preparer has convinced Jordan that it makes sense to use $50 of his refund to buy a U.S. savings bond. Like everyone else at this site who decides to save, he’s greeted with bells and cheers.
“Well you know, money grows” Jordan says. “And savings bonds are where it’s at, for now. I just thought it was a good thing.”
And others seem to think so too. The Baltimore CASH Campaign says tax-time savings jumped almost 500 percent, to $34,000, the first year it offered cash awards.
And in Michigan, almost three dozen credit unions have seen a big growth in savings since offering prizes as part of another program called Save to Win. Now credit unions in three other states are doing the same.
And there’s a bipartisan effort in Congress to pass legislation that would allow banks to offer such programs as well.
Lori Wesp, a single mother in Rochester, N.Y., says the prizes make a difference to low-income people like her.
“It’s hard, paycheck to paycheck, paying everything, so when you get a little incentive like this, it helps out tremendously,” she says. Wesp recently won $100 in the SaveYourRefund promotion in Rochester, after setting aside half of her tax refund to help pay for her daughter’s summer camp.
The prize isn’t much, but Wesp already knows how she’s going to spend it.
There are 46 million poor people in the U.S., and millions more hover right above the poverty line — but go into many of their homes, and you might find a flat-screen TV, a computer or the latest sneakers.
And that raises a question: What does it mean to be poor in America today?
Take Victoria Houser, a 22-year-old single mother who lives in Painted Post, a small town in western New York. At first glance, her life doesn’t look all that bad. She lives in a cozy two-bedroom apartment. She has food, furniture and toys for her almost 2-year-old son, Brayden. He even likes playing a game called Fruit Ninja on her electronic tablet.
“He just likes touching it because he always sees me on my computer, my iPad or something,” Houser says.
Brayden’s father is out of the picture, and Houser knows she could be a lot worse off. At least she has a job earning $10 an hour preparing food in a company cafeteria.
Still, you don’t have to look too far to see that her life is teetering on the edge. Her nice-looking apartment? “It’s kind of not a very safe place to live,” she says. “There’ve been quite a few drug busts here.”
Houser says she’s scared to let her son play outside. Her next-door neighbor was recently arrested for allegedly murdering someone and stuffing the body in a cupboard.
Victoria Houser and her son, Brayden, may have food to eat and toys to play with, but she says she feels like she’s teetering on the edge.
Pam Fessler/NPR
But this subsidized housing is all she can afford. Most of Houser’s paycheck goes for things like food, diapers and gas. And she says what look like luxuries are necessities for her. They’re also mostly gifts from family or friends. She says she has a car to get to work, a computer to take online college courses, a cellphone to check up on her son.
But there’s one thing Houser doesn’t have, and that’s a lot of hope for the future.
She says she feels stuck in a never-ending cycle, constantly worried that one financial emergency — like a broken-down car — will send everything tumbling down.
“Poor to me is the fact that I’m working my butt off. I’m trying to go to school. I’m trying to take care of my son, and that’s just not enough,” she says.
And it’s this frustration and despair that those who work with struggling families say is the true face of poverty today — that it’s not just a lack of material things.
“It used to be that if you were poor, you just didn’t have the basic things, like maybe you didn’t have a washer and dryer, and you were able to get by,” says Kelly Wells, a case manager for Pro Action, a nonprofit community action agency that’s trying to help Houser and others like her.
“Now what I see with families is if you’re poor, you’re poor in every avenue: emotionally, supportwise, familywise,” Wells says.
She and other social service providers in western New York say they’re seeing more families ripped apart — by drug abuse, domestic violence and mental illness.
50 Years Later, Poverty Looks Different
The face of being poor has changed since the 1960s, when President Johnson declared a war on poverty. For example, in 1960, 63 percent of poor people had hot and cold piped water, 65 percent had a bathtub or shower and 69 percent had an indoor flush toilet.
In 2010, nearly 100 percent of poor families lived with similar amenities.
And in 1960, only half of poor people had phones; in 2010, 95 percent did.
The Cycle Of Poverty
At the Family Resource Center in the town of Bath, N.Y., where Pro Action is located, a young mother plays with her giggling 9-month-old son. The mother is petite with long, curly brown hair. And she has a huge black eye.
Right now, the mother gets to visit her son at the center once a week. She lost custody because of suspected drug abuse and violence in the home. The father is in jail. The father’s stepmother now cares for the boy.
The stepmother, who has come to pick him up, says he was in a lot of danger at home, and child protective services “basically told me I either take custody or he has to go to foster care, and I wasn’t going to let that happen.”‘
She says she and her husband now care for three of their grandchildren.
“We want them to have a good work ethic, morals, values. We don’t want them learning the kinds of things they would learn at home,” she says.
Social workers say they see lots of stressed-out families, with kids paying the price.
Marsha Patrick runs the local Head Start program. She says she had to hire nine extra classroom workers this year to deal with growing behavioral problems among the children.
“Everything will be fine, and then all of a sudden they are literally off the wall. They might be walking on the tables. They might run up and down on the radiators,” she says. “They just cannot control whatever it is that’s making them go off like that.”
Patrick suspects that it’s the strain of living with adults who are overwhelmed by life or who don’t have the skills they need to raise children because they themselves came from troubled homes.
Her program is trying to break the cycle. But Patrick says it’s difficult, especially with factory jobs that used to support a middle class in this region disappearing in droves.
“Unless we have those jobs to offer those folks, that they’re going to feel good about and want to go to work for and do, the kids are going to be the ones who are suffering, and we’re seeing it,” she says.
Isolated And Disconnected
But, of course, poverty is about more than a lack of jobs. It can also mean isolation.
Frank and Amber Adams live in a trailer home in rural Hammondsport, also in western New York. The yard is filled with chickens and ducks, cats and dogs.
Frank, 41, has been poor his entire life. He says it’s been a lot of ups and downs, but mostly downs. He survives by selling scrap and doing odd jobs and masonry work.
Frank and Amber Adams of Hammondsport, N.Y. He sometimes has to redeem empty soda cans to buy gas to take Amber to counseling classes.
Pam Fessler/NPR
The Adamses have seven children between them, from other relationships. But the children are scattered about, and right now, Amber’s goal is to regain custody of her youngest three. But first she has to clean up her act. She’s a recovering crack addict. So is Frank. He says it’s pretty common in this part of the state.
“There’s lots of people that just aren’t happy with themselves or what have you,” he says. “Maybe they don’t have a job, so they gotta sell some of the drugs to make money, and then they get addicted to the drug themselves.”
He says drugs are readily available, but about a year ago, he and Amber looked at each and asked, “What the hell are we doing?”
They got married, and now he’s helping her through counseling. But it’s a struggle. Frank says sometimes he has to redeem empty soda cans just to buy gas to take Amber to counseling classes.
He says he thinks it’s harder being poor today than when he was young.
“People aren’t as outgoing and gracious as they were back in the day. Back in the day, your neighbors helped each other,” he says.
And that’s a big difference for poor families today. They might have TVs and cellphones, but researchers say they can be more disconnected than ever — from neighbors, work, family, all of the social networks that help people through life.
Amber takes a picture off the wall, which shows six of their seven children dressed up for their wedding last summer. And she reads the words written on the side: Family, together, we have it all.
The Richest Man in Babylon is a Life Changing Novel using Parables set in Ancient Babylon to discuss Financial Progression and How to Acquire Riches. A Must Read for Success!
I read this book for the first time in 1988, while studying business administration at Southern New Hampshire University on a military campus. I must admit it was difficult for me to visualize the parables as applicable to me. However, in 2008, 20 years later I purchased a copy of the book at a thrift store. I reacquainted myself with the parables realizing they were very applicable. Today, I live by the teachings of the parables. I am financially free.
Enjoy,
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A few weeks ago, Alberto Baco Bague arrived in New York for a roadshow of sorts. In just 48 hours, Baco, Puerto Rico’s secretary of economic development and commerce, met with more than 30 hedge fund managers, investors and others who could be classified as very well-off.
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For Baco and the Puerto Rican government, the benefits of injecting more rich people into the island are clear. “We are a poor island, and this is our way of developing [and] developing employment in Puerto Rico. We are very serious about that,” he says.s mission might seem quixotic at best: trying to convince these well-heeled New Yorkers to uproot themselves from Manhattan and relocate to Puerto Rico. But he says they are starting to come.
Baco has an enticing carrot for the investors. Under laws enacted in 2012, when someone moves to the island, all of that person’s investment income, like capital gains, dividends and the like — is completely tax-free. Plus, service income — say, a hedge fund’s management fees, is taxed at just 4 percent. And, as it is for all Puerto Rico residents, there’s no federal income tax.
Occasional Visitors Need Not Apply
The catch is that you can’t just set up a post office box and call yourself a resident. You have to move for real. Like Damon Vickers has.
“I love it. I love Puerto Rico, I love the climate, I love the people, I love the energy of the place,” Vickers says, sitting by the pool at the La Concha resort in Puerto Rico’s capital, San Juan.
Vickers moved his hedge fund and his family here from Seattle earlier this year. He had been eyeing the U.S. Virgin Islands for a move, but then caught wind of Puerto Rico’s new tax benefits. For him, it’s about simple math.
“I like making money. And we want to go to a place where our money is treated the best, so we might benefit ourselves, and we might also benefit our investors,” he says.
His friends in the investing world are watching closely to see how he fares. Many are unaware the island even has a financial district, much less modern highways and shopping malls. Once they learn more, many worry about the crime, including a murder rate six times the U.S. average. And, given its gritty reputation, word hasn’t gotten out that the wealthy can live well in Puerto Rico.
Paco Diaz, with Trillion Realty Group, the local affiliate of Christie’s, is among those trying to convince them. Picking them up in his late-model BMW SUV, he takes investors around tony neighborhoods like Condado on the San Juan beachfront, pointing out homes selling for millions.
He shows off resort hotels, new condo buildings and high-end stores along a segment he says many call “the Puerto Rican version of Fifth Avenue.” New York’s storied shopping strip doesn’t have anything to worry about, but one block here does feature Louis Vuitton and Cartier.
To take advantage of the tax breaks, the rules say you must live in Puerto Rico at least 183 days a year and prove that you’re really part of the community. Your spouse must live with you, and your kids must go to local schools. Some of the best, like the private Saint John’s School, are just feet from the ocean, which Diaz uses as a selling point. He points out students attending a surfing school behind him. “They just go across the street with their surfing boards to catch some waves,” he says.
If the city life is not to the investors’ liking, Diaz takes them to the suburb of Dorado. It’s a gated community on steroids. Past its guards, you’ll find lush palm trees, golf courses, private beach clubs and a water park. A few nights at the Ritz Carlton resort here costs about what the average Puerto Rican makes in a year. Singer Ricky Martin lives around the corner.
Diaz’s colleague Coco Millares says the tax incentives are already boosting her business. “We have had, since they passed the law, much more interest in Dorado than we had before,” she says.
Hoping To Boost A Weak Economy
But back in San Juan, few residents had even heard of these tax breaks. When told the details, their reactions were mixed. One thought it could bring some much-needed money to the island. But others, like restaurant worker Estefania Colon, were resentful that locals pay taxes while the newcomers are exempt from many of them.
“They’re already rich, and they’re making more money from us?” she says.
Tax incentives are nothing new to Puerto Rico. For decades, tax breaks brought manufacturing and pharmaceutical firms to the island. But many incentives have been phased out, and some officials believe that’s one reason the island’s recession has been so deep. Unemployment is nearly 14 percent, and the average income is about half that of Mississippi.
The hope is that a few super-rich people will help turn some of that around and beef up the service and financial sectors, while also buying real estate, eating at restaurants, hiring locals and, eventually, maybe even invest their own money in big projects on the island.
The zero percent tax on investment income, and the 4 percent corporate tax, went into effect at the start of 2012. The goal is for 500 wealthy investors to come in the next four years. So far, 77 have applied.
The investment tax breaks are guaranteed until 2036. Only congressional action — or granting Puerto Rico statehood — would put a stop to them. But while some say this is just Puerto Rico becoming the latest tax haven, there has been little serious opposition.
Mauro Guillen, a professor of international management at the University of Pennsylvania’s Wharton School, says Puerto Rico officials are being a bit optimistic about the direct effects.
“It is not going to create a major migration to Puerto Rico,” Guillen says. The biggest boon could be indirect, he explains. Even if just a few people move, it could change the conversation about the island.
“Puerto Rico will be making the headlines. It will be perceived as a location where you should do business in,” Guillen says.
Lawyer Fernando Goyco, who advises many of the investors, says in his practice, it’s millionaires, not billionaires, who are showing the most interest in moving for the tax deal. That could be a good thing for Puerto Rico, he says — too many super-rich moving here to avoid taxes could draw congressional scrutiny.
And he’s not surprised big honchos aren’t flocking to his island. “Moving somebody from New York to Puerto Rico, that’s very difficult, that’s very difficult. Moving somebody from Kansas to Puerto Rico [or] from North Carolina to Puerto Rico — it’s a different story,” he says, chuckling.
But as the word spreads, he says, millionaires are calling his office
Jack Canfield was featured the the Movie “The Secret” is originator of the Chicken Soup for the Soul® series, he’s personally taught millions of people. Here is his audio book “The Success Principal.” Jack reads is great book.
The audio is about one hour running time. I hope you get as much out of it as I have. Thank you Jack.
Jack Canfield who was featured in the movie “The Secret,” is the originator of the Chicken Soup for the Soul® series. He’s personally taught millions of people. Here is his audio book, “The Success Principal.” Jack reads his great book. The audio is about one hour running time. I hope you get as much out of it as I have.
