In the last few years, the Tuesday after Cyber Monday has become known as Giving Tuesday, or rather #GivingTuesday. It was founded in 2012 by the 92nd Street Y and the U.N. Foundation.
With social media — and specifically the hashtag (#) on its side — online giving on Giving Tuesday alone has gone up by 270 percent since 2011. (Last year people donated $32.33 million across five online platforms — Blackbaud, PayPal, Razoo, Network for Good and DonorPerfect — according to The NonProfit Times.) As DailyFinance reports, Giving Tuesday has started an important conversation about caring.
If you’re feeling like you’d like to give back — and you’d like to participate today — DailyFinance offers a list of participating organizations, as does GivingTuesday.org. Know that giving back doesn’t just benefit the recipients, but the givers as well. Research says giving back makes us happier, healthier and less stressed. You might get some tax breaks and it can even benefit you at work. (You can read my take on employers asking employees to donate to company charities on LinkedIn today.) Research has also shown that channeling gratitude can help curb the urge to impulse buy. Fascinating.
And if you’re around at 2:00 p.m. Eastern (11:00 a.m. Pacific) today, then join me (@JeanChatzky) for a Giving Tuesday Twitter chat with Reuters (@ReutersMoney). We’ll go over the best ways to give back this season. Make sure to use the hashtags: #ReutersCharity and #GivingTuesday. See you there!
Kiplinger’s ‘Believe It Or Not’
You don’t have to start saving for retirement until you’re 40… Buying a home is a fast path to wealth…You should borrow from your 401(k) when you need money. These are urban myths of personal finance — ones that I’ve aimed to dispel for years. Kiplinger compiled an entertaining, albeit frightening, list of them. Here’s a few to commit to memory and pass onto the friends who still (yikes!) believe them.
Fiction: “You don’t have to start saving for retirement until you’re 40.”
Fact: Start saving as soon as you can. What’s scary is that 25 percent of Americans ages 30 to 49 aren’t saving anything for retirement — and more than half (59 percent) of these people plan to save more aggressively “later” to make up for the shortcomings now. If that’s you, plug your numbers into a retirement calculator (I have one here) to see what you’ll need to save if you start saving now, versus what you’ll need to save if you start later. Take Kiplinger’s example: If a 25-year-old puts $500 in a mutual fund (earning 8 percent a year), and adds $100 a month, he or she will have over $335,000 by 65. Now, let’s say a 35-year-old invests $2,500 (i.e.: 5X the 25-year-old’s original investment) in the same fund and contributes the same monthly $100. He or she would only have $167,000 by 65.
Fiction: “You should borrow from your 401(k) when you need money.”
Fact: Don’t touch it. When you borrow from your 401(k), you’re borrowing before-tax dollars and then paying the loan back with after-tax money. What’s more, that money will get taxed again when you withdraw in retirement. Meaning: You’ll pay taxes twice on the same money. Even worse, if you get fired or laid off, you’ll likely need to pay the loan back within 60 days. And if you can’t swing it — and you’re under 55 — then you’ll get hit with an additional, 10 percent early-withdrawal fee.
Fiction: “Only rich people need a will.”
Fact: Everybody should have a will. Right now roughly half of Americans ages 55 to 65 don’t. It’s important to have one even for funeral and burial wishes. In some cases — if you die without one in place — then you’ll be letting strangers decide how to divvy up your estate and even raise your children. You can write your own on sites like LegalZoom.com. Or consult a lawyer to draft one up for you.
An old wives’ tale
Women aren’t equally represented in corporate America because they want to prioritize motherhood over climbing ladders, right? New research from Harvard Business School says not so fast. The study found that women in business want high-achieving careers even after they start families (a finding I can relate to from personal experience). So what gives? As The New York Times reports, women have mismatched expectations between what they want to achieve professionally and personally, and what actually happens.
Generally speaking, the study found that men expect to be the primary breadwinners and also expect that their spouses’ will handle more of the child-rearing. Both expectations are exceeded. Roughly 60 percent of male graduates ages 32 to 67 expected their careers to take priority (over their wives’) and about 75 percent of men said this turned out to be true. Eighty percent expected their wives to do more child care and this happened almost 90 percent of the time.
On the other hand — for women — who expect that their careers will be just as important as their spouses’, and that child care will be an equal responsibility between both partners — neither expectation pans out. For women in the same age group (32 to 67), just 17 to 25 percent expected their husbands’ careers to take precedence over their own, but that happened 40 percent of the time. Moreover, 50 percent of women expected to helm the child-rearing — but 75 percent said they ended up doing it. Plus, only a few of the women surveyed, who left the workforce to raise children, did so by choice. The bottom line: despite women’s ambitions, workplace norms, men’s expectations and public policy are still getting in the way.
The country’s biggest spenders
To tame overspending as you’re shopping this month, consider CardHub’s prediction that American consumers will end 2014 with about $55 billion more in credit card debt than we started with. Does America have a growing addiction to debt? With this question in mind, WalletHub took a look at which states have the biggest spenders. You can see a spending breakdown (on healthcare, utilities, auto, etc.) here, but the three states with the highest percentage of people spending more money than they make are: Hawaii, Nevada and Mississippi. Head over to the full report to see how your state stacks up.
Have a great week,