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business Wednesday 31 august 2022
Millennial Money: Don't let money 'rules' get you down

By KELSEY SHEEHY of Nerd- income on child care.
Wallet THE REALITY: Most families
Put 20% down when buying spend 20% or more on child
a home. Don't spend more care.
than 30% of your income The U.S. Department of
on housing costs. Keep Health and Human Ser-
child care expenses below vices considers spending
10% of your annual house- more than 7% of your an-
hold income. nual household income on
These money rules of child care unaffordable.
thumb can be useful But a whopping 51% of par-
guardrails, helping you al- ents spend more than 20%,
locate spending and de- according to a 2022 survey
termine what's affordable. from Care.com, which in-
They can also be incredibly terviewed more than 3,000
defeating when they feel parents paying for child
unattainable. care. There are few things
If money "rules" feel com- you can do to dramati-
pletely detached from cally cut child care costs,
your reality, know this: The but discounts and scholar-
average American doesn't ships may be available, de-
come close to hitting many pending on your state and
of the popular money rules. The likeness of Benjamin Franklin is seen on U.S. $100 bills, Thursday, July 14, 2022, in Marple Town- child care situation.
And that's OK. ship, Pa. A dependent care flexible
"If you treat 'rules of thumb' Associated Press spending account is anoth-
as rigid rules, you're setting er option. If your employer
yourself up for frustration," personal financial reality. American renters spent half work to fit your current offers it, you can contribute
says William O'Donnell, THE RULE: Divide your bud- or more of their income on financial situation with an up to $5,000 pretax and use
president of Heartland Fi- get into needs (50%), wants rent alone, according to eye toward where you'd the funds to help pay for
nancial Solutions in Bel- (30%) and savings (20%). the most recent data avail- like to be long-term. Sure, it a nanny, day care, after-
levue, Nebraska. "The thing THE REALITY: Housing alone able from the U.S. Census may be more of an 85/10/5 school care and summer
people tend to forget is can easily eat up half of Bureau. Add in other needs budget now, but over time camp registration, among
that guidelines are flexible your take-home pay. — utilities, groceries, trans- you can move closer to other things.
because everybody's situa- The 50/30/20 rule is a popu- portation, insurance, child your ideal balance. THE RULE: You need a 20%
tion is different." lar budgeting framework care and debt payments Simply tracking all of your down payment to buy a
What's important is having that divvies up after-tax in- — and there's little, if any- expenses is a good start; house.
a handle on your expenses come into three buckets: thing, left over for wants or you'll see where every dol- THE REALITY: First-time
and building a spending needs, wants and savings. savings. lar is going and can make homebuyers typically put
plan that works for you, not But must-pay expenses can Don't scrap your budget if more informed decisions around 7% down, accord-
some ideal. Here's how to bust that budget before the buckets don't work. In- about your spending. ing to data from the Na-
view money rules of thumb you even get started. stead, embrace the prin- THE RULE: Don't spend more tional Association of Real-
in the context of your own In 2020, for example, 23% of ciple and adjust the frame- than 7% of your household tors. q
NYC announces debt relief plan for struggling taxi drivers

By KAREN MATTHEWS means that drivers won't risk several months. Under the
NEW YORK (AP) — New York losing their homes if they plan announced Tuesday,
City taxi drivers who owe default, said Bhairavi Desai, medallion owners can ap-
hundreds of thousands of the executive director of ply to refinance their loans
dollars on loans they took the Taxi Workers Alliance, a starting Sept. 19.
out to operate yellow cabs drivers' union. "It's lifesaving Andrew Milgram, manag-
will see their burdens re- and historic," she said. ing partner and chief in-
duced substantially under Many taxi drivers who bor- vestment officer of Marble-
a debt relief program an- rowed to buy the medal- gate Asset Management,
nounced Tuesday. lions that are required said drivers should not wait
Under the program an- to operate a yellow cab to apply. "With a rapidly
nounced by city officials, landed in deep debt when changing economy, it is vi-
the New York City Taxi Work- the value of a medallion tal drivers act in the month
ers Alliance and taxi me- plunged from more than $1 of September to realize
dallion lender Marblegate million in 2014 to $200,000 a meaningful debt forgive-
Asset Management, loans few years later. Taxi indus- ness and a sizable reduc- The medallion of taxi driver and taxi medallion owner Marcelino
for 3,000 drivers who owe try representatives blamed tion in their monthly loan Hervias is affixed to the hood of his taxicab on New York's Upper
an average of $550,000 will predatory lending practic- payments," Milgram said in West Side on June 26, 2017.
be restructured to a maxi- es as well as ride-hailing ser- a statement. Associated Press
mum of $200,000. Of that, vices like Uber for the crisis. Mayor Eric Adams, a Dem-
$30,000 will be covered by City officials, the taxi al- ocrat, praised the deal owners and drivers have are likely putting tens of
a grant and the balance liance and Marblegate hammered out by mem- always kept New York City thousands of dollars back
will be secured by a city- reached a tentative debt bers of his administration moving, and it is finally time into the pockets of these
backed guarantee, the of- relief agreement in Novem- including the Taxi and Lim- we pay it forward with real owner-drivers and showing
ficials said. ber of last year and worked ousine Commission. debt relief for owners in them what real relief looks
The city-backed guarantee out the details over the last "Our taxicab medallion need," Adams said. "We like."q