Over the past year, consumers focused on the nitty gritty of their own finances — from seeking jobs to clipping electronic coupons — according to an analysis released this week of the top 10 finance searches for 2009 on Yahoo!
As tens of millions of people turn to the Internet to locate resources and solutions, their search activity provides a snapshot into their largest financial concerns. To identify the top finance searches, Yahoo! editors analyze search queries based upon absolute volume and growth versus previous periods, to see which themes and trends bubble to the surface. (Individual users and their searches remain anonymous.)
In the aftermath of the global economic crisis, as unemployment soared to 10.2 percent, households focused on staying employed and right-sizing their personal balance sheets. As consumers adopted the thrifty practices of the Depression era, savings rates rose to 4.5 percent in the third quarter, revolving debt fell for a record eighth straight month in September, and “staycations” became the hot trend in leisure.
Homeowners struggled mightily to hang on to their properties as one in seven mortgages fell into default or foreclosure by the third quarter of the year. The federal government launched a range of stimulus plans to prop up the sagging economy, and Americans went online to figure out how to get their share of the pie.
The top financial searches of 2009 are a sharp contrast with the previous year, when consumers sought to make sense of the chaos in financial markets; four of the top five 2008 search terms included oil prices, gold prices, gas prices and Dow Jones. In 2009, the focus shifted from macro to micro — coupons, unemployment and stimulus plan took the top three spots. Here’s a closer look at the top 10 finance searches for 2009:
Penny-pinching came back into vogue, as consumers sought “grocery coupons,” “printable coupons,” “restaurant coupons” and more. Powering the search trend was a promo-turned-fiasco: In May, The Oprah Winfrey Show offered free coupons for Kentucky Fried Chicken’s new grilled chicken meal (two pieces of chicken, two sides and a biscuit) on Oprah.com. Some 10.5 million coupons were downloaded (apparently using technology that did not prevent consumers from making copies). Stores were inundated — 4.5 million meals were given away in two days — supplies ran out, anger ensued, lawsuits were filed and KFC canceled the promotion. (Rain checks were supplied to customers who didn’t get their meals.)
In 2009, Web surfers combed the Internet for any information related to finding a new job, returning to school and starting a business, as the unemployment rate hit a 26-1/2-year high in October. Underlying this search term was Congressional action to extend jobless benefits for 14 weeks to workers in all 50 states whose jobless benefits run out at the end of this year. The extension underscores the misery in the job market they’re designed for people who’ve been out of work for a year to 18 months. (See this site, sponsored by the U.S. Department of Labor, for information on benefits in your state.)
3) Stimulus Plan
Inspiring “Honk If You Need a Stimulus” bumper stickers, the Obama administration’s $787 billion economic defibrillator also spawned millions of Web searches at the beginning of the year, as Americans tried to figure out what the plan would entail. The American Recovery and Reinvestment Act provided government funds for construction, infrastructure development, education and health care, among other projects, and small relief from tax withholding (about $20 a week) for Americans who qualified. It also prompted a wave of “Tea Party” protests against big government.
4) Cash For Clunkers
When the dust settled on the Car Allowance Rebate System (CARS) program, Americans had purchased nearly 700,000 vehicles with better fuel efficiency. But it wasn’t without some initial confusion about which older vehicles qualified for the trade-in cash — and subsequent controversy over the program’s cost. The automotive Web site Edmunds.com estimated that each vehicle purchased under Cash for Clunkers cost taxpayers $24,000 — and that only 125,000 of the sales were incremental. The rest would have happened without the existence of the program.
5) Student Loans
It’s a time-honored recession tradition: If you can’t find a job, go back to school. According to the Pew Research Center, college enrollment is at an all-time high, fueled by a huge jump in applications to community colleges. About 11.5 million students, or 39.6 percent of all young adults ages 18 to 24, were enrolled in either a two- or four-year college in October 2008, the latest figures available. States such as Washington, Iowa and Indiana report record demand at two-year colleges this year, with older students packing classrooms in hopes of broadening their skills.
The problem is, tuitions rose about 5 percent beyond the rate of inflation every year in the last decade — and are now skyrocketing amid state budget woes. California’s Board of Regents in November approved a 32 percent hike in the cost of college for undergraduates, prompting widespread protests.
Meanwhile, private student loans dried up significantly amid the economic crisis, and the House passed legislation that would move all student loans to a Direct Loan delivery system through colleges and universities, and out of the hands of private lenders. (The bill is currently on hold in the Senate as lawmakers wrestle with health care legislation.)
6) IRS Refund
The Internal Revenue Service issued more than $20 million in erroneous refunds after taxpayers overpaid their taxes with rubber checks — and the IRS didn’t catch the discrepancy until after the refund checks were cashed. More than 245,000 checks used to pay taxes were returned for insufficient funds — and of those, about 6.5 percent were written for more than the taxpayer owed, generating $53 million in refunds before the IRS caught the problem. It stopped payment on most of those refunds, but $20 million was cashed. The Treasury Inspector General for Tax Administration, an independent oversight committee, reported problems with how the agency handled payments bounced by the banks.
Back in February the Obama administration introduced a $75 billion effort to help homeowners avoid foreclosures by cutting their mortgage interest rates as low as 2 percent for five years. But it hasn’t stemmed the tide: As of early September, only 1,700 households of the 375,000 who qualify for a modified loan had completed the required paperwork and signed on for a new loan, according to the Treasury Department. About one-third of borrowers completed applications, but hadn’t received a decision from lenders.
Among the factors behind the crisis: Adjustable-rate loans resetting at higher interest rates, job loss and reluctant lenders. Earlier this week, Treasury Department officials said they’ll pressure the 71 participating loan servicers to step up efforts to help troubled borrowers facing foreclosure. In the meantime, some people were searching for “foreclosure” as an opportunity: The share of existing homes sold as foreclosures or otherwise distressed property rose to 30 percent in September, according to the National Association of Realtors. Analysts predict the crisis will persist well into next year.
8) Government Jobs
Actor Kal Penn left the popular television show “House” for a new job — in the White House, as associate director in the Office of Public Liaison & Intergovernmental Affairs. The actor’s surprise career change was one that many were seeking in 2009, as evidenced by the popularity of the search string “how to get a government job.” But what was once seen as the bastion of stability and security has become anything but, as cities and states slashed jobs in 2009 and put many workers on furlough.
9) Bernard Madoff
He is now known as inmate number 61727-054 in a North Carolina prison — but his epic $65 billion fraud sparked millions of searches for more information about the man and his crime. (“What is a Ponzi scheme?” was a popular string.)
Americans were astonished by the gargantuan scope of the con, the government ineptitude in responding to a decade of red flags and the celebrity clients (actor Kevin Bacon and others). At first, perhaps, a little schadenfreude was afoot, as the jobless, newly homeless and those who lost a chunk of their retirement savings in the markets took satisfaction in the knowledge that the very rich are not so different from you and me. But then they learned that some of Madoff’s victims were not all members of the Palm Beach Country Club, but ordinary people who toiled for the nonprofit groups that entrusted the 71-year-old sociopath with both their endowments and retirement plans.
Madoff pleaded guilty to 11 federal offenses and is serving a 150-year prison sentence. His homes in France, Montauk and Palm Beach have been auctioned, along with his yacht and the rest of his personal items, and a hearing related to the victim’s restitution fund is scheduled for February.
10) Health Care Bill
The numbers are daunting: Americans spend more on health care than on food. From 1997 and 2007, each person’s health care bill increased 81 percent. Every year for three decades, costs have outpaced the rate of inflation. Medical bills are behind 60 percent of U.S. bankruptcies. Insurance bills account for many a layoff and cutbacks. Some 47 million Americans are uninsured. But can the government fix the mess?
At press time, an $848 billion plan to overhaul the nation’s health care system was under debate in the Senate, after the House of Representatives approved a $1.1 trillion version of the legislation by a margin of five votes on Nov. 7. Senate Democrats claim the plan would extend health insurance coverage to most of the uninsured and reduce the federal budget deficit.
Skeptical taxpayers protested the cost and runaway bureaucracy in angry town-hall meetings across the U.S. and wild rumors of death panels made the rounds. Democrats need 60 votes to pass legislation in the Senate; expect a bruising battle in the coming weeks.