The graphic should be pretty self-explanatory. The bottom line is that positive and negative months are random. Good luck trying to find a pattern.

The best month, based on geometric average total return is December. The worst month, based on geometric average is September. The most volatile month, based on standard deviation, is April (April just happens to be the second best month based on geometric average total return).

Nonfarm payrolls rose by 243,000 last month, the Labor Department said Friday, marking the biggest gain since April. The jobless rate fell by two-tenths of a point to 8.3%, the lowest it has been since February 2009.

Both figures contradicted expectations of a slowdown in job growth to start the year. Economists surveyed by Dow Jones Newswires had forecast a gain of 125,000 in payrolls and that the jobless rate would remain at 8.5%.

The report also indicated that job growth was stronger in previous months than initially reported, with the economy gaining 60,000 jobs beyond the government’s preliminary figures for November and December.

The latest drop in the jobless rate, which is obtained from a separate household survey was largely because of genuine job growth rather than a reduction in the labor force, the report showed. The number of unemployed people fell to 12.8 million, a three-year low, and the jobless rate has fallen from 9.1% since August.

The way they massage the numbers, anything is possible.

I live in Southeast Texas. Things have never gotten too bad here. What about you? Do you see things improving in your part of the country? Personally, are you starting to see positive changes in your own finances?

The District of Columbia notched the greatest increase over the 2007-2010 period, with an 8.1% jump in income, in large part because of federal-government employment.

It’s nice to be the government, I guess. I don’t know what else to say to that.

The rest of the country didn’t fare so well…

From 2007 to 2010, median annual household income fell across the country by 3.5% to $51,287. That’s according to an analysis of Census data released Wednesday by former Census Bureau officials Gordon Green and John Coder.

I’m thankful we live in Texas, which has held steady (median household income grew .8% 2007-2010).

Here is a state-by-state look at change in median income for 2007-2010.

For younger kids, short-term results are very important. They need to understand the correlation between saving and spending. Hopefully as they get older, they are able to wait longer and longer to receive the payoff for their hard work. One major issue in the lives of teenagers and adults in America is delayed gratification. That’s why our nation’s credit card debt is out of control, why there are many people who can’t pay their light bill but still have an iPhone. Teaching kids self-control is a difficult task, but one that is essential for their success as adults.

There are two different types of saving lessons our kids need to learn: Saving for something and saving just to save. Both are valuable lessons. Younger guys have a more difficult time understanding the second one, so obviously those lessons need to be age-appropriate.

Saving for Something
This one has become automatic for our kids. On “pay day,” we break up their money into smaller bills. They are required to divide their money into give, save, and spend envelopes. They always have something they want to save for, so we’ve tried a variety of techniques to help them keep track of how much money they are saving and how close they are to achieving their goal. (Most of these are very visual – posters, thermometers, all kinds of charts.) Celebrating their achievement of that goal makes it even more meaningful when they can finally enjoy all of their hard work.

As our kids have gotten older, though, we’ve seen that they need an additional lesson. Kids need to learn to save for the future, not just just for a specific item.

Saving for the Future
So what is the best way to teach kids to save for the future? I don’t think there’s one right way that will work for everyone, but here’s what we’ve done. We opened a savings account for my son when he turned 10. We tried to make it a milestone (something the other kids could look forward to when they turned that age). He went to the bank with us to open the account, and they put his name on it. When he gets money for anything, he now has four categories to put his money into: long-term save, short-term save, give, and spend. (He still ends up having approximately the same amount of money as his siblings because we pay him a little more for the work he does around the house.) As he’s seen the balance in that account grow, he’s been more motivated to put money away. It’s also given him the chance to learn about a checkbook register, how to keep track of what you’ve put in the bank, and several other valuable financial lessons.

I’ve done a small amount of research into ING Savings Accounts for Kids and that is something we are considering as his balance grows. (In school, he’s starting to learn about percentages and higher numbers, so it might be a good time to introduce some investing concepts.)

This website lists software specifically for kids to learn how to keep track of their money and budget. I’m researching some of these products as well.

Bottom line – it’s our job as parents to teach our kids to handle money. We want them to be productive adults and to not repeat our mistakes. Hopefully being open with them about those mistakes and teaching them practical saving and spending habits will allow them to be better off as they enter adulthood.

Now, here are the numbers for January 2012 (click on the graphic for a larger version):

January’s 4.48% return for the S&P 500 Index was it’s best return for January since 1997. The question is: What will it mean for the rest of the year?

As I understand it (if I’m wrong, please correct me), these customer funds are no different from a customer brokerage account at say Merrill Lynch or Charles Schwab. So, it would be like going to check your account balance one day and your account being empty.

I’m not sure why John Corzine and the other executives are not behind bars right now. He and the other executives at MF Global should at least be required to sell all their possessions and put that money towards what they stole from their clients. That would go a lot further than Corzine’s “contrite” attitude about the whole deal.

Write-offs for sales/state income tax has expired. That means those with state income taxes have to pay tax on that money twice?

2. Stop Buying Stuff & Refurbish Things

Interesting ways to re-use old things. For the author, it serves two purposes: saving money and allowing her to have “new” stuff when that spending money urge strikes

3. I Was in a Facebook Fist-Fight

Who knew extended warranties on cell phones were a controversial topic? “People think there is a 50% chance of them damaging their phone when, in all actuality, it’s closer to 5%.”

4. Credit is Not the Enemy – You Are

Best quote: “People need to stop placing the blame on others, including credit issuers, and recognize that they are their own worst enemy.”

5. 3 Rules for Hitting the Target

“Plan one month at a time.” – Breaking a larger goal into smaller ones has definitely helped us stay on track. 

6. Get Your Children Off to the Best Financial Start

A few good tips for teaching kids to save money.

7. Five Reasons to Give Up Goal Setting

Should you give up setting goals?

8. Additive vs. Multiplicative Thinking About Money

This isn’t the most practice article, but it is an interesting article on the way we think about money.

9. 10 Ways to Protect Your Financial and Personal Information When Shopping Online

Best tip: “Don’t click on links when you don’t know the source of the email, social media message or e-card.” If you’re not sure, don’t click it!

10. Why Aren’t People Applying for Mortgages

With mortgage rates so low right now, an interesting article about why people still aren’t applying for mortgages.

Hey everybody!

This morning I woke and was so frustrated about all the stuff I’m dealing with, trying to get this studio open. I was about to open my mouth and start complaining when I remembered something that happened to me about a year ago.

I was walking to my car and this woman who looked to be homeless started walking towards me. I’m ashamed to say this but I thought, “I don’t feel like being hustled today.” Then I got quickly convicted. I felt guilty so I started digging in my pocket for some money. As she got closer I noticed that she had the kindest eyes that I had ever seen. As I was reaching into my pocket she started to speak. I thought, “Here goes the sales pitch”. She said “Excuse me sir, I need some shoes”. Can you help me? My eyes filled with water because I remember being out on the streets and having only one pair of run over shoes. I was taken aback for a second.

I took her inside the studio and had my wardrobe people find shoes in her size. As she put the shoes on she started crying, praising God and thanking Jesus, and saying, “My feet are off the ground! My feet are off the ground!” Several of the wardrobe people started crying. I was crying. But I never forgot that, “My feet are off the ground!”

I thought, “Wow! All she wanted was some shoes.” She quickly disappeared and never asked me for a dime. I realized that I still had the money in my hand so I went out looking for her. She was gone just that quick so I looked all around the neighborhood for her. I found her standing on a corner looking down at her shoes still crying. I was so touched I asked her how she had gotten homeless. She told me that she had AIDS and that she was waiting to get into a shelter. She said that her family had turned their backs on her and she had nowhere to go and that God would make a way for her. I said to myself, “He just did.” Her faith and her praise moved me.

I took her to a nearby hotel and put her up until she was able to get on her feet. I had someone that worked for me to check on her from time to time and make sure that she had food and clothes. After about a month or so we lost touch but I never forgot her.

This past summer I was shooting “Daddy’s Little Girls” and this woman walks up to me smiling. I didn’t recognize her face but her eyes were familiar. She had on a really nice dress and her hair was done. It was her! She told me that the little help that I had given her changed her life. She was in a house now and doing very well.

I said all of that to say this. After I met this woman, every time I think about complaining and mumbling I remember, “My feet are off the ground!”

I wanted to share this with you just to let you know that when I say that I am thankful for you, I really mean it. And when I say that you are a blessing to me, I mean it. We take so much for granted sometimes that I just wanted all of you to know that I am grateful to God for you everyday.

Thank you for being in my life,

Tyler

by Tyler Perry on March 21, 2007.

The Statue of Liberty - best tax preparation mascot ever?

Every day on the way home, we pass the Liberty Tax Statue of Liberty waving at us. I never have quite figured out why the Statue of Liberty wants me to do my taxes, but I get the idea that they want me to come in and find out.

The last time we passed them, though, I saw this sign:

REFUND ANTICIPATION LOANS

This sounds like bad idea on so many levels. I tried very hard to think of a situation in which this could be considered a good idea.  I even called our local Liberty Tax branch to get some details about the offer.

In order to represent them fairly, I want to make it clear that I do not think this is an evil company, nor do I think they are in any way running a scam or anything improper. But I do believe that they wouldn’t loan money to people if they weren’t making a profit from it, and I definitely do not think this is in the best interest of their customers.

When I spoke with the representative at Liberty Tax, I asked her what the terms of the loan are. She informed me that they don’t directly offer the loan or qualify people for it – it’s done through Republic Bank & Trust.  That means the terms will vary depending on the specific circumstances of the customer. I have to believe that people who are trying to qualify for this type of loan don’t have the best credit scores, so I’m sure the interest rates are high. (Based on some of the research I’ve done, it’s possible to see rates up to 500%!) Every person who qualifies can receive a loan of up to $1,500, and the amount is paid back when their tax return refund comes in.

The only positive note I could find in the whole thing is that you can’t qualify until after your taxes are calculated.  At least theoretically, the customer would know how much their refund will be before they decide whether to apply for a loan.

I specifically asked the representative if they recommended these types of loans. She didn’t really answer that question, but simply said she would do what the customer wanted.

Debt is bad. Debt based on the anticipation of having a lot of money come in “soon” is really bad. It’s so tempting, though, to take the easy way out.

Here’s two reasons this is a bad idea:

You’re choosing to have a small amount of money right now instead of a larger amount of money later.

We’re a society that wants instant gratification. We don’t want to wait for anything. Some of it is because we’re greedy: We want our money – and the stuff we can buy with our money – RIGHT NOW. Some of it is because we’re scared: Maybe we are afraid there’s a bill we can’t pay, and this seems like the best – or easiest – way to pay it. But if you wait, you can do more with your money later than you’ll be able to do with it right now.  In order to receive this type of loan, here are some examples of the fees and charges you’ll be expected to pay (rough numbers):

Tax preparation fee: Around $200 (according to About.com)

eFiling fee: Usually around $25 (according to TuboTax)

Loan origination fee: Usually around $32 (according to Wikipedia)

Interest (assuming a rate of 20%): $50 (20% is a very generous estimate according to CRL)

So you’re spending $307 to receive your money a couple of weeks early. Is it worth it?

Let me say that again: it’s YOUR MONEY, but you’re paying someone else to give it to you. That does not make sense on any level.

When you go into debt, though, you are giving away control of your finances and part of your life.

When you borrow the money initially, it is subject to someone else’s terms – they decide how much money they will give you, when they will give it to you, how much interest you have to pay back. When your refund finally does come in, it’s not yours to do with what you want. You have to give it back to the people you borrowed it from in the first place. Even the Bible tells us, “The borrower is slave to the lender.”

Here’s an important “grown up financial lesson” to learn: Even when it feels harder in some ways, being in control of your own life and finances brings more freedom and security than handing it over to someone else.

So what would you say to someone who was considering getting one of these loans? Is there anything you could say that would change the mind of someone who had already decided to get one of these loans?