#MoneyConscious MashUp for Friday, February 7, 2014

Money Consciousness

We’re taking a consolidated approach with our aggregate articles to help our readers be money conscious. We strongly believe that it’s in everyone’s best interest to be aware of what is going on in the economy and the markets around them regardless of whether you invest in stocks or not or whether you’re an attorney or a fashion designer. What’s going on in the financial world has a direct impact on your job and career, your loans, the things you buy and more.

Contrary to what someone suggested earlier this week, we’re not “market-timers”. We don’t believe or suggest that you can predict the best time is to buy or sell a stock, home or car. It’s impossible. What is possible is to be aware, to be conscious of how the current environment affects you. Granted, if you must to buy a house, buy a house. We just think it’s in your best interest to be educated about the housing market so you know what you’re getting into and you have leverage to negotiate a good deal. If you can’t get a good deal, you’ll know when to walk away.

Economic News

This first week in the month for lovers has been interesting to say the least. While the S&P posted its worst start of February since 1933, due in part because of rough economic data earlier in the week, such as lower than expected factory data and The Fed continuing to honor its promise to slowly unwind its bond buying program, the Dow Industrial Average posted its best day of 2014 so far on Thursday. February tends to be a volatile month for the markets and while the Dow consists of only 30 companies, it does provide a snapshot of market sentiment for leading businesses.

Economic Data

Barring an unforeseen catastrophe, we’re still long-term cautiously optimistic about the economy and are happy that people such as economist David Rosenberg has joined the side of the market bulls. Like Rosenberg, our biggest concern is the unemployment rate and not the fake unemployment rate, at 6.6% as of today, that’s regularly propagated across the media. We hold fast to tracking the U6 unemployment rate that captures “discouraged” workers, those who are able and want to work but are tired of looking and have, therefore, dropped out of the market. Today’s BLS report has a silver lining in that the U6 has finally dropped from 13.1% to 12.7%.

Other mixed news came out this week while the cold weather continues to get a bad rap. January auto sales were down, which may prove positive for consumers. Auto makers are committed to not providing buyer incentives, but they may have to if this pattern continues. We believe this dip is partially because no one wants to shop for a new car in sub-arctic temperatures. If you’re a contrarian, now may be a time to buy especially after banks announced this week that they’ve lowered lending standards. As if banks forgot Econ 101, they announced that when they eased lending standards, they saw an increase in loan applications. Go figure! Not only does this suggest that bankers have a positive view for 2014 growth, it’s helpful for consumers who have found bankers to be as chilling as a polar vortex while they’ve been as warm as Mr. Heat Mizer to business. If you do decide to brave the cold to go car or house hunting, get pre-qualified for a loan from your bank or credit union first.

While we’re on the topic of homes, expectations are that homes won’t reach their peak housing bubble levels until 2021. 2014 housing market growth is expected to be between 3% and 5%. If you’re feeling pressure to buy because of 2013’s housing market performance, this may reduce some pressure.

Some like the cold.

If you are in the market for a car, be aware that the low gasoline prices that much of the country is guzzling, or not guzzling, may not continue and a fuel-efficient car may be a wise option. Holding fast to the principle of supply and demand, oil prices rose Thursday due to the consequential increase in demand because of Old Man Winter. This lead AAA (Triple A) to remind drivers to not be misled that while they’re experiencing low gasoline prices now (because who wants to be stuck on a highway like those in Atlanta?), spring is just around the corner. The A-Team predicts prices will peak nationally this summer between $3.55 and $3.75.

Personal Finance

There were several good articles this week to help people manage their personal finances. It’s very popular to put everyone into a generational bucket when most of us are struggling because of high unemployment and a lackluster to tepid economy. So, while our concerns and remedies may be different, we’re all in this together.

That said saving money in your 20s is optimal when you’re just starting out and it’s the hardest, while hunkering down and practicing the patience of Buddha is best in your 30s when salaries tend to increase. Millennials seem to be wiser with their money than any generation since their grandparents. Of course, they’re also the ones who have taken some of the biggest lumps with our economy over the last five to seven years. Older Millennials are starting to enter their 30s and it seems there’s not enough advice to go around.

Because lattes are warm and fuzzy.

Two insightful articles we found this week are “10 Characteristics of Debt Free People” and “The 12 Worst Money Habits and How to Break Them”. While we find these kinds of articles helpful, they always remind us about the need to also be money conscious about our personal finances.  Both articles, while different, have a lot in common about valuing your hard earned cash and appreciating experiences over things such as the proverbial latte. Protect your money and always try to make a portion work for you.

If you are near retirement and need to give your savings a little extra jolt, here are “10 Ways to Boost Your Retirement Savings”. Every little bit helps, which is why we love to bash the icon of unconscious spending, the latte. Of course, have your latte, but only of your money conscious says it’s okay.

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still somewhere over the rainbow?

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