What I’ve Been Up To

This Week In Your Wallet: Home Improvement ROI and The Mobile Divide

Okay, despite the snow that was falling outside my window less than a week ago, today it’s expected to hit the mid-60s and I’m convinced that spring is here to stay. So, it seems, are a number of other people, judging by the money we’re spending sprucing up our homes.

Homeowners spent $130 billion on remodeling last year – the largest amount of remodeling spending since 2007. And according to Harvard’s Joint Center for Housing Studies we’re expecting another double digit bump this year. Where should you put that dough to get the biggest return on your money?

As I discussed with HGTV’s Mike Aubrey on Today, minor improvements tend to have a bigger payoff than major ones. You can do an awful lot of good with a can of paint, he says. (And he knows – when he’s not on TV, he sells real estate in the Washington, DC area.) More specifically, according to Remodeling.com’s annual Cost vs. Value study, the 2014 top 5 improvements for your money are:

• Entry door replacement (steel) cost $1162; payoff 96.6%
• Deck addition (wood): cost $9,539; payoff 87.4%
• Attic bedroom: cost $49, 438; payoff 84.3%
• Garage door replacement: cost $2,791, payoff 83.7%
• Minor kitchen remodel: cost $18,856, payoff 82.7%
• Oh, and if you’re looking to save a bit more – our Frugal Friday post featured a couple of home improvement deals from Lowe’s and Home Depot. 

Bribing, borrowing and lying 

No, I’m not referring to politics, or the latest episode of Scandal. In T. Rowe Price’s sixth annual Parents, Kids & Money Survey, 48% of parents owned up to bribing their children with money. Additionally, 30% of parents admitted to “borrowing” from piggy banks, and 28% said they’ve lied to their kids about money. Sure, white lies, small loans and a little financial incentive for good behavior might seem harmless enough, but you have to remember: Your relationship with money is setting the tone for your kids’ financial future.

These survey results arrived just in time for National Financial Literacy Month. And while it’s important for us to continue our learning and understanding of money matters (and technology’s impact on them — more on this in a sec), I’d say it’s just as important to consider who’s watching us while we’re at it.

I know you agree. T. Rowe Price found that 69% of parents are concerned with wanting to set a good financial example for their children. In a different piece of research from RetailMeNot, the majority of respondents (92%) said it’s up to mom and dad to educate the future generations on money.

The Mobile Divide

It’s important to acknowledge that parents and kids are living in very different worlds where our shopping practices are concerned.  Even though more parents are shopping, and paying their bills online, over half of them never use mobile devices to make purchases or deposits, nor do they use financial software or apps. This is a stark contrast to the 54% of kids who not only buy mobile apps, but also use them to make in-app purchases. Not to mention, 41% of kids are using their phones for buying items in general.

Who’s picking up the tab for all of these online, mobile and credit card purchases the kids are making? Fifty-seven percent of parents raised their hands, according to T. Rowe Price. And I’ll bet some of them (because I had the experience until I wised up) don’t even realize how much their kids are spending.

My feeling is that you can’t apply the tried and true money lessons (i.e. the value of a dollar, and ahem, the dangers of bribery and loans) to new technologies if you’re completely in the dark on how they work. Money didn’t grow on trees for us, and they need to know that it doesn’t come from cyber space for them. So, pull out the next bill and ask the kids to show you what they’re doing. Consider setting limits that they have to adhere to, subtracting what they spend from their allowance (if they receive one) or coming up with some other way to square the accounts. And consider finding a shopping app or two that improves your own life (personally, I love the fact that I can order my groceries from anywhere, anytime using peapod.com’s app).

The bird is drawing bandits

New research claims stolen Twitter accounts are now more valuable than credit cards in cybercrime black markets. As The Wall Street Journal reports, it comes down to supply and demand. After major data breaches (i.e. Target), the black market for credit card numbers explodes. And just like the price for the hottest new gadget decreases after everyone has it, so does your financial information if it’s widely available on the market.

Considering this, hackers are setting their sights on your social media accounts, simply because they’re worth more. Depending on the account, hackers can make up to $16-$325. For comparison, the price for stolen credit card data after a major breach can be as little as $0.75. Just another reason to take password protection seriously! For more, read the full article.