Annotated Bibliography

Frederick Geisler
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This article provides expenditure data from all states in American from 1997 through
December of 2015, findings are not surprising but are rising at an exponential rate. The data is
collect from the US census along with other surveys taken around the nation. With multiple
charts and tables this article is very informative, but very data heavy. The authors are trying to
answer a real question, where does all our money go and it turns out they found only sixteen
places ones money ends up. On paper it seems easy to tell where the nation is saving its money,
with increases in money spent motor vehicles and forty-five of the fifty states decreasing their
gasoline consumption, but the data makes it clear that when Americans are giving extra money,
they spend it.
The more I dive into the tables the more I begin to understand why overspending is an
issue here in the United States. The states that are more likely to have financial success are the
ones who increase their allocation to the finical services sector of their budget, focusing on future
success. Setting aside money is key when it comes to long-term financial independence, but that
goes hand in hand with minimizing outside forces on your budget and bank account. States and
even regions set themselves apart from each other and the data shows that, a few in all sixteen
categories. Consumer expenditures are a scary thing for some households but the right
precautions need to be taken in order for financial independence.
Angrisani, Marco, Arie Kapteyn, and Scott Schuh. "Measuring Household Spending and
Payment Habits: The Role of Typical and Specific Time Frames in Survey Questions."

Http://www.bostonfed.org/. N.p., 2012. Web.

<http://www.bostonfed.org/economic/wp/wp2012/wp1207.htm>.
This article gives data on a household use or a credit or debit cards, and how frequency of
those uses can actually allow someone to make a purchase without thinking about it, an issue for
the young and old as found in this study. The study used participants from the age of eighteen to
over fifty-five, with all levels of education, and income. The easy access to money is what the
issue is here, along with frequent spending prevents one from knowing exactly what they can
afford to pay.
The study found that age along with level of education have an effect not only on
frequency of spending but the amount spent. That those in the thirty-five to fifty-five age range
had not only spent a lesser percentage of their income, but the spent in over longer periods of
time, unlike the eighteen to thirty-four year olds who spent the most often and the highest
percentage of their income. The findings are to be expected but the link between education and
spending habits is there, even the most basic principles of finance can be taught at all levels but
they seem to be withheld till higher education. This becomes costly when a majority of college
students receive financial aid, why should they have to wait to learn about loans, interest rates,
and their affects till they already are being affected by one?

Cooper, Daneil. "Impending U.S. Spending Bust? The Role of Housing Wealth as Borrowing
Collateral." Http://www.bostonfed.org/. N.p., 1 July 2009. Web.
<http://www.bostonfed.org/economic/ppdp/2009/ppdp0909.htm>.
This paper focusing on taking ones homes value and consumption in order to use it as
collateral at banks to allow for greater loans. The author uses different math equations to show

that highly leveraged households benefit in increases in their homes value, and vice versa. Next
he goes on to say that higher house prices indicate a higher cost of housing services, and that
rising home value will theoretically impact consumption to the homeowner. Cost of living is one
thing that should be thought as a subscription, due to its repetitive costs, a lower rent or mortgage
can help different sectors other than energy. The Author goes on to talk about the uses for the
equity in their home, but unless youre not looking for another outstanding loan this article is
nothing but fools gold.
This paper is terrible advice for those looking to get out of or prevent debt, the play of
using your home are leverage with banks for a higher loan is next to barbarian. The consumption
habits of those who find this to be a useful or even reliable access to money are far from
educated, the disadvantages to this are clear, another outstanding loan from a bank that will make
plenty of money off of someone without their house. In the long run this is the exact opposite of
what someone should do in a financial crisis, the possible loss of ones house is too great of a
risk, and will only cause other financial troubles when paying back the price of the home.
Budgeting and contacting a financial consult are the two fastest ways out of debt, the only way
that this whole leveraging idea could work is if inflation increases at a faster rate than the loans
interest rate.
Stanley, Thomas J., and William D. Danko. The Millionaire Next Door: The Surprising Secrets
of America's Wealthy. Atlanta, GA: Longstreet, 1996. Print.
This is a popular book in the world of personal finance, discovering the true habits to
those who have the net worth to be called millionaires, not just the appearance. The book goes
over the findings of a series of interviews and surveys taken by Americans with a net worth of
over one million dollars. The study was not only conducted on paper, but body language and

actions were also under the microscope. The finding showed that those who had the highest net
worths among those surveyed where the individuals who at the crackers when they were served
food, wore cheap durable clothes, and drove the same car for upwards of five to six years. Those
with the lowest average net worth were the individuals who had children who relied heavily on
them financially, while dressed to the nines, with the cars and house to match.
This book is an eye opener, but for a reader it honestly should have been what anyone
expected. Those who spend less and save more eventually outrun those in a completely different
pay grade, the money isnt all that its different between these individuals, not only are their
appearances different but their children grow up to go into much different occupations. Due to
their differences in spending habits (frugal and hyper spending) their respective incomes become
next to meaningless over time, with the interest rates. With a larger percentage of their income
going to more non-return items or ones with depreciating values it is the inevitable for those
individuals to have a lower net worth by retirement, and for most of their professional career.
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This journal goes over the affects ones friends can have on their spending, along with
why people will not stop spending when they are attempting to impress someone. According to a
study noted in the journal, males spend up to fifty-six percent more with a friend, while females
spend four percent less. Also showing that if given five dollars men would spend almost the
entire amount while women would spend less than half. The studies give the results for multiple
trials, and the findings are quite surprising. Given that the study allowed the participants to keep
their change, the findings are still quite odd.

This journal provides more research into the spending habits of adults, and the keeping
up with the joneses side of spending. Wanting to outspend ones friend was found to be a
common was to display financial dominance in a relationship, and boost ones ego. This seems
like nothing at the surface, but ally this to cars, houses, and other common items, it becomes
clear that especially in males the inherit behavior is to out spent their friends in order to appear to
have more money. This is a long-term issue in most households across the United States, pulling
more money away from places that offer a return, to those that lose money over time. Financially
the mistake of trying to pay ones was into lifestyle that doesnt match their income is
dangerously unforgiving.
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This journal goes over the spending gaps between those who properly saved for their
retirement and those who did not, due to uncertain life expectancies after retirement. The
survey was conduction in 1992 and followed up in 2000 for the rest of the data, showing the
differences in financial assets over those eight years. Even after eight years, those households
who had not only more money already in their portfolios, but put more into their account
annually continued increase far beyond the other participants. All credit due to returning
portfolios along with spending habits that allowed the most successful of household to operate
under their means, the had more than three times the retirement savings at the age of seventy.
The findings of the study are not that unusual, it is actually spot on. Allocation of money
to financial assets, along with time a return is all but certain. The study shows that those who
start putting their money into a retirement fun early benefit when it counts, the longer it is put off
the less compound interest can work. With the eight years between the two surveys, the gap only

widened, those in the highest quintile of the study only were successful because of they built the
habit of putting away the money early and controlled their spending habits over their lives.
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%40sessionmgr113&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=88
80117&db=lfh
This is a journal on the accumulation of household debt, also including mortgage
refinancing and home-equity loans. The bulk of this journal is on the 2001 recession entering
2002, and the key factors that played into the plummeting household savings rate which at the
time was near zero percent in the fall of that year. Statistics are given on the average personal
savings per household, the negative GDP growth of 2001, and exponential growth of consumer
debt shown as percentages of disposable income per household. The authors also highlight
multiple ways the government could have reduced most blue-collar working homeowners debt
by minimal changes to social security and tightening the roles surrounds employers 401(k) plans.
The author Maya MacGuineas is the current president of the committee for a responsible
federal budget, graduated from Northwestern University, majoring in economics and psychology.
Along with receiving her masters in public policy form Harvard university. This audience
intended for this journal is all those who are concerned with household wealth, and spending
appreciation within the household. The article was written prejudice free, since all the
information is useful to all homeowners. The author provides multiple changes to government
policies that would help the middle-class, the highest percentage of Americans. Overall the
journal is a necessity for my paper, because of the acknowledgement of government policies and

their effects on savings of Americans, and retirement funds accumulated throughout their
lifetimes.
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3204402&db=ulh
This journal breaks down the science behind personal finance, with general knowledge
like operating on spreadsheet, all the way to building credit for ones future. Honesty, and
discipline are the authors keys to success, along with the longevity of ones spending habits.
Their first key to a secure financial future is removing all forms of debt, starting with the which
loan compounds the most often. Managing debt is not their golden egg in this journal, it is to
start and stay frugal after graduating ones institute. Starting an emergency fund, and qualifying
for ones first credit card, only if it requires a deposit. The main point the author make is to start
saving for retirement early, and increase your deposits according to changes in pretax income.
This Sources creditability is marginal; this is a periodical (Kiplinger's Personal Finance)
without a stated author surrounding the article. The information provided highlight the key
differences between a comfortable retirement and one that is not complete. There was not a
noticeable throughout the article. The purpose of this article was to highlight the importance of
saving for retirement early and meticulously adding to it more often than annually. I used this
periodical because of the basic information it provides over 401(K), and 529s. Along with the
importance of planting a substantial retirement seed early, even the basics need to be outlined.

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This journal measured the change in retirement decisions across demographic changes,
highlighting the small differences between financially wealthy and financially independent.
Mainly the use of durables, or items defined as non-depreciating, used in replacement of
continuous spending cycles. The formulas are implanted intended for the reader to put in their
own information to allow them to track how well they really are financially. Using models such
as a two-period overlapping generations to show the differences in key information like expected
retirement age, savings averages, and longevity of life expectation between the two generations.
This source (Journal of Population Economics) was publish in the summer of 2014, but
with the rate of retirement the data is still relevant today. This mix of the audience this journal
reaches with this publication is across the entire spectrum, the main focus of the information is
towards the older generations. The authors Torben M. Andersen and Mikkel Nrlem Hermansen
both have their PhDs in business economics. There was a clear bias in the information provided,
leaning toward older generations, unsurprisingly a bulk of their information (Data) was skewed
towards them. This article is of a top priority for those individuals with less than average
understanding of measuring their own finances across the board.
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My final source (Podiatry Management) is a journal entry on financial independence and
the bumpy road map that is associated with it. Many recommendations are made in this article,
like by the age of thirty-five having accumulated a savings of 1.4 times ones salary, and further

on with age. The author also states that retiring on 80% of ones pre-retirement savings will make
for a comfortable retirement, but what happens when inflation catches up? Later on in the
article chart shows that most physicians today are living check to check, 54% in respect to the
27% who feel financially comfortable, even the highest paying professions like physicians
have the opportunity to be financially illiterate.
The author Jon Hultman, has a broad range of experience in the finance world. Currently
hes the president of the medical business advisors along with being a chairman of the board.
Graduating from the California College of Podiatric Medicine (DPM) and UCLA Graduate
School of Management (MBA). The intended audience for this journal in particular are those
69% of physicians mentioned above who are not financially comfortable. As far as bias goes
there were not any within the article. This articles purpose was to inform and teach those living
check to check how to use their money correctly when saving for retirement and what those
individuals actually spend on one-time investments like cars, homes, and nearly everything
outside of the essentials. This source is important for my overall paper because it provides
information on the highest of income individuals, and the financial mistakes associated with
them, showing that while there is an income gap between the everyday person and a physicians
both make the same mistakes.