Free From Broke

A Personal Finance Blog for Regular Folks

Economy

The economy is a tricky thing that at times makes perfect sense and others...well not so much. Articles here help you understand what is going on in the economy and how it affects your wealth.

Is Unemployment Hurting Your Job Prospects? Why You Should Accept a Job Below Your Salary Requirements

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Kelly was a lawyer making a six-figure income when she was laid off in April of 2010.  Since then she has worked to make herself more marketable by going to school to obtain a Master’s degree with the hope of becoming a college teacher.  She took out student loans to pay for both her additional education and to use the money to supplement unemployment.

Even with unemployment and student loans, money is extremely tight.  She always enjoyed her large salary and is not used to living below her means.  Now, she is still responsible for the student loan payments that have come due and car payments in addition to rent, utilities, and groceries.  Her car is in need of repairs and due to the high price of gas, she limits her trips and stays home much of the day.  She has very little in savings and has had to begin to rely on credit cards to get her through this lean time.
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What is the National Debt Ceiling, and Why Should You Care?

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Not too long ago, the U.S. reached its debt ceiling.  The amount of money the U.S. can borrow from others is determined by law, and Congress has to approve borrowing beyond a certain point.  In the past, the debt ceiling has always been raised to accommodate the growing debt in the U.S.  Indeed, in the past, both parties have been mostly content to raise the debt ceiling.  Now, though, there is a battle brewing as Republicans refuse to vote to raise the debt ceiling.  That means that the U.S. won’t be able to borrow money in order to meet its obligations.
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Is It a Good Idea for the Credit Market to Ease?

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For the last couple of years, we’ve heard about the tight credit market. It’s been more difficult to qualify for credit.  Even credit card issuers reduced the amount of money they were providing.  However, mailboxes are starting to see an influx of credit card offers, and things are getting a little bit easier (although we are still far from the heady days of easy money seen in the years leading up to the financial crisis).  It might be a little easier to get approved for a loan or credit card now than it was last year, but that mean it’s a good thing?

Do We Really Want More Credit Available?

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More Money in Your Paycheck – The Payroll Tax Cut (Social Security Tax Cut)

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In late 2010, Congress and President Obama passed new tax laws that take effect in 2011 (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010).

The Making Work Pay tax credit is gone.

As a result, most people will benefit from a cut in Social Security taxes (also known as Payroll Taxes).

Previously, people paid 6.2% toward Social Security.  Under the new law, people will be paying 4.2%, a reduction of 2% in their Social Security tax withholding rate.

That is good news for many Americans as it essentially means a 2% increase in your paycheck.
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More 0 Percent APR Credit Card Offers Expected

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SmartMoney is reporting that we should expect to see more 0% APR credit card offers available for those who have credit scores of 720 and above. Balance transfer offers are also on the rise.

It wasn’t long ago that credit card companies cut out 0% APR offers and balance transfers since those with better credit tended to also be less profitable as they usually paid off their balances.  According to the SmartMoney article, credit card issuers are hoping that the more credit-worthy will spend with their new cards and keep a balance beyond their introductory offers.

Here is what we can expect from these new credit card offers (from SmartMoney);

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