US Finance World

1. “When I say this is a good policy, I mean it’s good for me.”

Although agents can help you navigate auto?policies, some may not have your best interests at heart. Often, large auto and home insurers use “contingent commissions” to compensate agents who sold their policies. These fees come in two types: “steering” commissions, for signing customers with a particular carrier, and profit-based commissions, when clients don’t file a lot of costly claims. The concern with the former is that unscrupulous agents push certain policies to reap larger commissions; with the latter, they might delay or discourage claims.

How can you protect yourself? Ask about commissions, and have prospective agents explain their recommendations.

• Compare car insurance quotes

2. “Young drivers can’t catch a break.”

Statistics show that drivers under age 25, especially males, are in a high-risk group and have difficulty getting insured.

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If a person with little or no money wins a lottery for several million dollars, their first instinct would be to go on a shopping spree for stuff they could never afford. Statistics has proven that winners of large jackpots face both a pile of money and lots of problematic decisions.

We have all heard horror stories about people winning the lottery and a few years later they are totally broke. Most likely there will be family, friends and even strangers seeking ways to relieve you of your money. A prime example of that is a man in Florida who won the lottery a few years ago, it was reported that he was paying for funerals, lending money to friends, starting flawed businesses, and even giving out as much as a million dollars to an acquaintance. Needless to say his money want be around for very long at that rate. This individual did indicate that he wanted to start a foundation for the poor although he never did.

I have never been fortunate enough to win a large sum of money; however, I did consult with an accountant to determine what proactive steps an individual may take if they suddenly come into a large sum of money.

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A financially clueless single gal — that was me when I first started writing this column, years ago. At the time, it was trendy to be both.

Remember the infamous “I spent my down payment money on shoes” episode of “Sex and the City”? It was a funny celebration of frivolity over financial sanity. Plenty of us could relate.

People still joke about that episode today. But even now, many of the messages that single women get validate obliviousness around money, disguised as being free-spirited.

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Bloomberg said:

Feb. 5 (Bloomberg) — U.S. stocks rose, rebounding from the biggest losses since March, as investors speculated the European Union may come up with a solution for budget deficits in Greece and Spain and consumer credit dropped less than forecast.

Bah.

Here’s the shorter-term outstanding credit picture…

And the rate of change….

Yes, there was a small uptick in non-revolving debt taken on (cars?) but the credit card rate-of-change continued to blow and during the Christmas month it declined by a net $8.5 billion.

Let me also point out that last December, which allegedly was the “depths of Hell” when it came to consumer behavior, revolving credit declined by $6.6 billion.

This December revolving debt declined by 29% more than it did last Christmas season.

Now perhaps you can square that with the claims of a “good” Christmas season that had increased consumer sales, and perhaps you can claim that this somehow represents that the de-leveraging is coming to an end in the consumer space, but I cannot.

First, from a “big-picture” perspective, here’s the consumer credit outstanding graph going back to the late 1960s:

The so-called “consumer revolution” happened through “increased earnings” eh?

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Banking today seems to be a much more complicated affair than it was just 10 or 20 years ago. The advent of debit cards, online banking, the ability to link checking and savings accounts, and tons of banks competing actively for your business can be overwhelming for the average customer.

After all, most of us just want a few simple things from our bank: a safe place to keep our money, access to our cash when we need it, and the ability to charge purchases or write checks to pay for things we need in a convenient fashion.

However, banking is big business. And, where there’s money, there’s creativity. Banks are always looking for ways to make themselves more attractive. In the 1980s it was ATMs. In the 1990s, it was free checking. In the current decade, it is overdraft protection programs.

Overdraft protection sounds like a great idea. After all, who doesn’t want to be “protected from their overdrafts?” In fact, protection sounds like just the kind of thing we all should expect from our banks, right?

Still, the reality of overdraft protection is not so simple.

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