Ian's list

Top picks from the web on money and your life, from ING economist Ian Bright – June 16, 2015

Car crash chances

Car crash chances

Is buying extra car accident insurance that reduces the excess worth it? Hedge fund manager John Hempton blogs that it depends on the real risk of a crash versus the costs. But even if the figures don’t add up, if a crash happens we may well wish we had bought that insurance anyway – an example of irrational “regret theory in practice”, he notes.

Financial fluctuations

Financial fluctuations

Income and spending may rise or fall by as much as 30% a month, and few households prepare for this – that’s according to a 2012-2014 survey of 2.5 million US bank customers, reported in the New York Times. Researcher Diana Farrell said in the article that people earning $40,501-$63,100 a year need $4,800 spare to cope with monthly variation – perhaps in an emergency fund – but most fall $1,800 short.

Bootstrap the budget

Bootstrap the budget

Motivating people to save money by setting specific goals can help them escape poverty, a Wall Street Journal article confirms. Research in the Philippines asked people to earmark specific accounts for things like education or home-buying; participants saved an average 82% more than those using conventional bank accounts. And a multinational programme enlisting 10,495 households helped people save 96% more on average, the article said.

SavingBehaviourIncomeEmergency savingsCars

Ian Bright
Ian Bright

Senior economist at ING
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