As Mark Zuckerberg rang the opening bell at the NASDAQ, plenty of people like me likely shared the same thought: my asinine thoughts, likes, dislikes and photos are now worth millions, and owned publicly. Fantastic! What was once private is now public, as far as both the SEC and your mother are concerned. We’re good at sharing stuff, aren’t we? But are we good at anything that actually matters? — Facebook closed at its opening price, indicating that no, maybe we aren’t. The theme of this week’s news is exactly that: can young people make and save money where it counts?
Maybe not, according to this piece by our own Jeanine Skowronski. We don’t know enough about credit scores, according to a recent survey. Especially for recent college grads who are saddled by large student loans, it’s very important to be cautious about how much debt they take on — it could have disastrous effects on their credit scores. On the bright side, Jeanine reports, young people are getting wiser about credit, on the whole. Relatedly, Jeanine wrote up a guide to what happens when you miss your first credit card payment at six different issuers — banks and card companies all vary in their policies, so go have a look.
The world of credit products is complicated and fraught with pratfalls — saving money is much more straightforward. And yet, we’re not too good at that either, are we? But doesn’t it seem that you bank encourages spending more than it encourages saving, sometimes? Especially with such low rates these days, rewards for spending might look more attractive than your savings account. Fortunately, that’s starting to change — ING Direct rolled out a product called My Savings Goals, which helps customers set specific savings goals, and meet them. They even offer it for Kids Savings accounts.
Some kids need bank accounts, too! And they need to know how to choose one over another, but that can prove tricky. Lori Fairchild, writing for us, discovered that her daughter’s decision for opening her first account was largely swayed by which bank had the best candy (among other things). There is arguably a worthwhile heuristic at play here: only a savvy and successful bank would keep a candy budget.
As far as the bigger kids are concerned, banks seem to think that social media is a fantastic way to connect with them. In fact, some are even turning to Pinterest, the province of lonely women who like pictures of high heels in tight focus, and kittens and puppies in soft focus. Were there a way to make a checking account look like a 60’s-vintage photo of an unintimidatingly attractive woman with a bob haircut riding a bicycle down a charming street in Paris, then banks might stand a chance. Zachary Ehrlich takes a look at why this doesn’t work.
The young folks among us make some good points when it comes to money, however, because old folks are pretty damn foolish with it, frequently. JP Morgan lost about $3 billion on a trade made in its London office. Occupy the SEC, the branch of the Occupy movement that concerns itself with complex regulatory issues, believes that the Volcker rule in its current form won’t prevent JPM from sinking itself on similar bets, and American taxpayers could eventually lose out. It’s a scary thought — Obama’s reelection campaign seems to agree, possibly for purely political reasons.