Many personal finance reports are published with advice that may not provide the best guidance. In an effort to avoid buzzwords and troubling phrases, consider these suggestions:
- determine who conducted the research; a company may sponsor a study that lacks the rigor of academic or government researchers.
- be wary of research that reports feelings or predictions rather than actual behaviors and actions of respondents.
- consider the number of people in the study and how the respondents were selected.
- avoid generalizations that about a certain age group, such as Millennials, Baby Boomers, or Generation X.
Don’t revise your money management activities based on some survey or research report. If your current actions are working, then you are on the correct path.
For additional information on avoiding personal finance nonsense, click here.
- Have students conduct online research to locate a recent personal finance study to evaluate the validity of the advice offered in the report.
- Have students create a video presentation reporting both valid and nonsense personal finance advice.
- What problems could occur if a person uses inappropriate financial advice?
- In addition to the suggestions in the article, what actions might a person take to determine the validity of personal finance advice?
When considering a career change, the following financial suggestions are offered:
- have an appropriate amount of savings for unexpected expenses during the transition.
- create a budget to live frugally; cut living costs to be prepared for sudden expenses.
- reassess your investment portfolio to reduce risk exposure and possibly eliminate fees.
- seek advice from a financial advisor.
- determine how a career switch might impact your ability to save.
For additional information on financial advice when changing careers, click here.
- Have students talk to a person who recently changed jobs to obtain information about their experiences.
- Have students create a video presentation with suggested actions when planning to change careers.
- What relationship exists between a person’s career choice and money management activities?
- Describe additional financial planning actions that might be appropriate when considering a career change.
To spend less and save more, consider an “anchoring” system. One example of an anchor is the price of an item to determine if that is an appropriate amount of money to spend for the item.
Anchors prevent shoppers from being overwhelmed by the many choices, prices, and features. You can create your own anchors by:
- setting the maximum price you are willing to spend for an item.
- considering the value of an item in relation to the number of hours you have to work to pay for it.
- comparing the cost in relation to another item. If you buy coffee costing $2.50 a cup and want a sweater costing $50, view the sweater as costing 20 cups of coffee. Your “coffee” anchor will help you determine how valuable the sweater is to you.
When buying a home, you may be encouraged to look at properties outside your price range. Anchoring yourself at a price limit will avoid overspending, make you feel more in control, and encourage wiser financial decisions.
For additional information on financial anchoring, click here.
- Have students talk to several people to obtain information about how they determine the price they are willing to pay for an item.
- Have students create a video presentation that demonstrates various anchoring methods.
- How might anchoring help improve personal financial literacy and money management activities?
- Describe anchors people might used to determine the price they would be willing to pay for an item.
Even if you just started working, now is the time to start preparing for retirement. Achieving the dream of a secure, comfortable retirement is much easier with a strong financial plan.
Tip 1: Start Early
Social security Administration’s retirement planning resources are helpful to you at any stage of your career. Their calculators, Benefit Eligibility Screening Tool, and disability resources are all available on our benefit planners website.
Tip 2: Be Informed
What’s the best age to start receiving retirement benefits? The answer is that there’s no single “best age” for everyone and, ultimately, it’s your choice. The most important thing is to make an informed decision, based on your individual and family circumstances.
Tip 3: Estimate the Benefits You Might Get
Knowing the amount of money you could get is pivotal in planning your finances. With the Retirement Estimator, you can plug in some basic information to get an instant, personalized estimate of your future benefits. Try out different scenarios, such as higher or lower future earnings amounts and various retirement dates to see the various potential effects on your future benefit amounts.
For more information, click here.
- Ask students to prepare a list of several retirement planning sources available from various governmental and private organizations.
- What actions you can take to prepare for retirement right now? Share your list with colleagues, friends, and relatives.
- Why is it important to start planning for retirement as early as possible?
- Why should you save now for retirement? Isn’t Social Security enough during retirement years?
- What are some ways to invest to reach your retirement goals and never outlive your savings?
Many recent college graduates choose to rent expensive, upscale apartments rather than putting money into savings. Their “fear of missing out” (FOMO) on being “close to the action” or luxury-living amenities comes at a cost, with high demand for these units resulting in spiraling monthly rents. To cover these higher costs, “apartment loans” are now available in several urban areas.
Similar to the high-risk mortgages that triggered the financial crisis in 2008, apartment loans may be viewed as predatory lending. Renters may borrow up to $15,000 with no interest for the first six months, but then encounter an annual interest rate of 15-17 percent. Some justify these loans in that the costs are lower than payday lending.
If you have to take out a loan to pay the rent for an apartment…you CAN’T afford to live there. Your ability to build wealth and long-term financial security will depend on living within your income.
For additional information on apartment loans, click here.
- Have students conduct a survey of renters to determine actions they took to determine the location and cost of obtaining an apartment.
- Have students create a visual presentation with the dangers of apartment loans.
- What actions might be considered to avoid apartment loans?
- Describe financial and personal concerns associated with apartment loans.
Are you at risk for fraud? What are some of the more common frauds and how much could it cost you?
- In 2018, the Federal Trade Commission (FTC) collected more than 1.4 million fraud reports, and Americans said they lost money to the fraud in 25 percent of those reports. Americans reported losing $1.48 billion to fraud – an increase of 38 percent over 2017.
- The top reports in 2018 were: imposter scams, debt collection, and identity theft.
- Younger people reported losing money to fraud more often than older people. Of those people who reported fraud and their age, 43 percent of people in their 20s reported a loss to that fraud, while only 15 percent of people in their 70s did.
- When people in their 70s lost money, the amount tended to be higher: their median loss was $751, compared to $400 for people in their 20s.
- Scammers like to get money by wire transfer – for a total of $423 million in 2018. That was the most of any payment method reported, but there was a surge of payments with gift and reload cards – a 95 percent increase in dollars paid to scammers last year.
- Tax-related identity theft was down last year (by 38 percent), but credit card fraud on new accounts was up 24 percent. In fact, misusing someone’s information to open a new credit card account was reported more often than other forms of identity theft in 2018.
- The top 3 states for fraud and other reports (per 100,000 population) are Florida, Georgia and Nevada. The top 3 states for identity theft reports (also per 100,000) are Georgia, Nevada and California.
For more information, click here.
- Ask students if they, their relatives or friends have ever been victims of fraud. If so, what was the outcome?
- Ask students to prepare a list of local, state, and federal agencies where fraud can be reported.
- Is it possible that the reason more young people reported fraud is because older persons are less likely to report?
- Are older people not reporting fraud because they are not tech savvy, or embarrassed by their inability to know they were scammed?
In June 2019, the Federal Trade Commission (FTC) charged that two defendants, Douglas Filter and Marcio G. Andrade, using such trade names as Deletion Experts, Inquiry Busters, and Top Tradelines, used deceptive websites, unsolicited emails, and text messages to target consumers with false promises of substantially improving consumers’ credit scores by claiming to remove all negative items and hard inquiries from consumers’ credit reports.
The defendants also falsely claimed to substantially improve consumers’ credit scores by promising to add consumers as “authorized users” to other individuals’ credit accounts. In most instances, however, the defendants were not able to substantially improve consumers’ credit scores. The complaint also alleges that the defendants charged illegal upfront fees and failed to provide consumers with required disclosures about their credit repair services.
The defendants often used illegal remotely created checks to pay for the credit repair services they offered through telemarketing, according the FTC’s complaint.
For more information, click here.
- Ask students to prepare a list of federal laws that protect consumers from operators of fake credit repair schemes.
- What is the best advice before you sign with such companies as, Grand Teton Professionals, LLC; to repair your poor credit?
- What is a household to do if it is experiencing problems in paying bills, thus resulting in poor credit scores?
- What are your options, if you are having problems paying your bills and need help?
- Discuss the statement, “Only time and a conscientious effort to pay your debt in a timely manner will lead to the success of improving your credit report.”
Most people would like to be able to go back and do some things differently related to their personal finances. A study by bankrate.com revealed that 76 percent of those surveyed have at least one financial regret. The largest concern, over half (56 percent), involved not starting to save sooner for retirement, an emergency fund, or their children’s education. Other financial regrets reported in the study include: living above one’s means; taking on too much credit card debt; and the burden of student loans.
A recommended action to address these financial regrets include breaking down large goals into smaller, easier ones can help put individuals on a path to success. A “save-first” mindset instead of “spend-first” is also suggested. In addition, consider opening an online savings account with higher returns, and set up direct deposits for regular saving.
For additional information on financial regrets, click here.
- Have students conduct online research to determine various financial regrets of people in different age categories and life situations.
- Have students conduct an interview with a person about actions that might be taken to avoid financial regrets.
- What factors might create situations that result in a financial regret?
- Describe possible financial regrets and corrective actions a person might take.
Before a person views your resume, it might be scanned by a computer to screen your qualifications.
Career experts suggest preparing your resume for three audiences: a computer screening program, a human resources specialist, and the hiring manager.
To pass the test of automatic resume scanners, consider these suggestions:
- Be sure to include your contact information, and avoid putting required information in the heading where it might be missed by the scanner.
- Avoid fancy formats and fonts. Use a professional presentation. Bullets are suggested for an organized, easy-to-read appearance.
- Emphasize keywords that reflect your competencies and experiences.
- Connect to the job description. Use the requirements and responsibilities of an employment position as a guide for presenting your background, skills, and accomplishments. Avoid a generic resume; tailor your resume to the specific position. Especially look for keywords that are repeated in the job description.
- Use clear job titles. Adapt and simplify previous job titles to fit generally-accepted labels in an industry.
- Seek guidance. Ask for assistance from career development centers, professional colleagues, friends, and others who can help you prepare a resume appropriate for scanning software.
Of special note, job applicants with military experience should match job description keywords to their military service. They should also emphasize and communicate their background so the resume scanning software will easily recognize their employment competencies.
For additional information on automatic resume scanners, click here.
- Have students create a resume for a specific job description to connect their background to the available position.
- Have students talk to a few people to obtain suggestions for improving their resumes.
- Based on selected job descriptions, name keywords that might be appropriate to use in a resume for those positions.
- List various sources that might be used to obtain resume preparation assistance.
The Social Security Board of Trustees released its 2019 annual report on the long-term financial status of the Social Security trust funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) trust funds are projected to become depleted in 2035, one year later than projected last year, with 80% of benefits payable at that time.
The OASI trust fund is projected to become depleted in 2034, the same as last year’s estimate, with 77% of benefits payable at that time. The DI trust fund is estimated to become depleted in 2052, extended 20 years from last year’s estimate of 2032, with 91% of benefits still payable.
The Board of Trustees usually comprises six members. Four serve by virtue of their positions with the federal government, Secretary of the Treasury and Managing Trustee; Commissioner of Social Security, Secretary of Health and Human Services and Secretary of Labor. The two public trustee positions are currently vacant.
For more information, click here.
- Ask students if they are concerned about the future of Social Security. Do they believe that Social Security will be there when they retire?
- Ask students to debate the issue, “Social Security is not sustainable over the long term at current benefit and tax rates.”
- What is the outlook for future Social Security and Medicare costs in relation to GDP?
- What might be the implications of rising Social Security and Medicare costs?
- How are Social Security and Medicare financed?
- How do longer life expectancies and early retirements affect the future of Social Security?