I HEAR THUNDER

The housing bubble that burst in 2008 has taken four years to recover.  Prices of homes that are selling are finally starting to rise again in most states.  Although that financial disaster has taken a turn for the better there is another storm that is moving in from the distance and that is student loan debt.  Student loan debt is sitting at $1 TRILLION dollars currently and with defaults at an all time high it is the next bubble that is ready to burst!  Just like the housing bubble not many people are paying attention to the warning signs and many don’t understand how dangerous the economy will get if this bubble burst.  Everyone will be affected if this bubble pops in fact no one will escape the aftermath.

First the borrowers who are not able to pay the current loans they have don’t have the luxury of filing bankruptcy like the homeowners did during the housing crisis.  These borrowers are going to get sued and their wages are going to be garnished making real life even more challenging.  Student loans never go away in fact they will take social security checks and tax refunds to pay off these loans.  Next the banks that lend the money to students are in the same predicament they were in with the housing bubble because a non paying student is the same as a non paying homeowner.  The banks are in the position again to be over leveraging themselves and putting their customers (account holders) in possible financial danger if these defaults continue to rise.  The $1 Trillion student loan debt is more than car loans and credit card debt combined so it presents a problem for these lending institutions.

Lastly, the universities are going to be hurt by this bubble and the sad part about it is that the universities think that if the bubble bursts they won’t be impacted.  The students who are borrowing money are getting federal loans which come from the government so what happens when those loans start to default?  The government takes a hit and stops putting out as many loans and grants for students to take advantage of for attending college.  As a result of this action on the part of the government universities have to find ways to make up the lost of those funds and also risk losing out on a potential Einstein because that Einstein can’t afford the high tuition.  As you can see a storm is upon us and we can hear the thunder, but are we going to let it reach us and we have no umbrella like the housing bubble or are we going to get inside and protect ourselves by doing our part to eliminate this debt.  You have been warned.

YOU’RE JUST A GIRL

I am sure all women at some point in time remember a boy saying to them “you’re just a girl!”  Whether it was the time everyone in the neighborhood was picking teams for tag football or even a little later in life when it was time to close that big business deal.  Not one time in any of those circumstances did we as little girls or women backed down from the challenge, in fact it made us even more determined to be the best!  Women have always been determined to even the playing field with men in every aspect of life making equality a top priority.  Unfortunately there is one area that is being neglected and that is finances.

This has been an ongoing problem for decades where women were not taking care of business when it came to their financial lives.  The problem looked solved in 2009 when women married and single started taking a more hands on approach to their personal finances as a result of the 2008 economic catastrophe.  Women were investing more, looking for ways to save money, and spending wisely from 2009-2011.  Obviously amnesia started to set in and the feeling of fear from 2008 had eroded because in 2012 women are beginning to return to their old ways and letting other people control their financial future.  This is dangerous in so many ways because times have changed drastically here in the U.S. and around the world. 

First and foremost women are outliving men at an average of five years!  I am sure if you look at your own life you can see the number is even larger than that.  Personally my grandmother outlived my grandfather by twenty years and my own father has been dead for fourteen years.  I promise you my mother who is coming up on sixty three if she is anything like her mother by the time it is all over she would have been without my father for thirty four plus years!  That is a long time to fend for yourself financially so you can see how it is imperative that women take control of their retirement savings, long term care insurance, etc.  Women who are married should know where all important papers are from insurance to bank account statements so that if they need them they can find it with no problem.  Something else that has changed is that women are getting married in their thirties and not their teens and twenties like their grandmothers did so they have to take control of their money. It is no way that a woman can go from eighteen to thirty years old without saving any money for the future and if they do they are setting themselves up for financial failure.  It is time for all women to stand up and take control of their financial futures!  You are NOT “Just a Girl!”