Friday Financial Five – February 1st, 2013
Friday, February 01, 2013
Social Security checks into the digital age
Starting March 1st, payments from Social Security will no longer come in check form. Recipients will need to sign up for direct deposit to a bank or credit union or they’ll receive a debit card. This is projected to save taxpayers $120 million in check fees. More than that, let’s hope this new system helps prevent fraud or waste in the entitlement program. There will be exceptions made in certain circumstances. If you’re currently receiving a paper check, go here to make a payment selection: http://www.godirect.org/
The fall in 4th Quarter GDP
The fourth quarter Gross Domestic Product decrease makes sense. Keep in mind the GDP equation: Government Spending plus Consumer Spending plus Investments plus Net Exports (Exports minus Imports). Consumer and Business Spending both increased, but were not able to overcome big reductions in Government Spending, which dropped 15 percent. This included a huge cut in defense spending. The overall growth for 2012 was 2.2 percent, but given the spending cuts and increased taxes projected for 2013, 2 percent growth for this year might be optimistic.
Checkout fees on your credit card
We’ve all encountered minimum payments at stores to pay by credit card. According to Bankrate.com, starting this week, retailers are allowed to charge up to four percent to recoup the charges they pay to MasterCard, Visa, and others. So keep an eye out, not just at the big stores, but at the local gas station. If a retailer is charging the fee, it must be disclosed. There won’t be a surcharge in Massachusetts or Connecticut, however, where these excess charges are banned.
RI housing numbers continue to impress
Rhode Island single-family home sales saw a big fourth quarter increase, according to the RI Association of Realtors. While the twenty-five percent increase in total sales over the previous year’s fourth quarter is nice, the real gem is the $10,000 increase in price of the median single family home. We need to start seeing consistent growth in real estate prices, as the road to recovery hinges on workers and investors getting out from under the weight of negative or minimal equity.
The Boston condo market
Speaking of real estate, while some recoveries outside of RI have been tepid, Boston’s condo market continues to be red hot. There are reports of packed open houses for buyers and quick sale turnarounds once a property is listed on the market. The end of 2012 saw the median prices near an all time high. This is what happens when you have a favorable employment environment, limited new construction, extremely low inventory, and the continuation of historically low interest rates. Rhode Island also saw an increase in condo sales but at nowhere near Boston’s price levels.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
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