Category Chapter 1

Jun 18 2016

Finances for Newlyweds

An estimated one-third of recently married couples are surprised by the financial situation of their spouse.  A similar number (36 percent) are not aware of their partner’s spending habits.  Based on a study by Experian Plc, only 40 percent knew the credit score of their partner.

Men more often hid money from spouses.  About 20 percent of men had secret bank accounts about which their partners didn’t know; compared to 12 percent of women. Regarding the maximum amount that they would spend before consulting with their spouse, men replied $1,259; women said $383.   Hidden financial information can have a significant adverse effect on the relationship of a newly married couple.

For additional information on newlywed finances, click here.

For additional information on the survey results, click here.

Teaching Suggestions

  • Have students survey newly-married people about their disclosure of financial information to their spouse.
  • Have students create a list of problems that might arise between newly-married people who do not inform their spouse about their personal financial information.

Discussion Questions 

  1. What financial information would be most important for newly-married people to disclose to their spouses?
  2. How could a lack of disclosure of financial information to a spouse create relationship difficulties?
Mar 19 2016

6 Ways Men and Women Differ When It Comes to Money

“The differences between men and women have taken on increased importance in today’s conversations about American culture . . .”

Based on information from the Census Bureau, financial institutions, and a credit score company, this article by describes the following six ways that men and women differ when it comes to money.

  1. Men make more for the same work.
  2. Women are better at managing personal debt.
  3. Men pay off their student debt faster.
  4. Men save more in their “rainy day” funds.
  5. Women use sounder strategies, but with less confidence.
  6. Men save more for retirement.

More information about each of the above statements including statistics is provided in the article.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss the specific differences cited in this article in more detail.
  • Create examples of how men and women can use this information to improve their long-term financial security.

Discussion Questions

  1. Based on U.S. census data, women make about 79 percent of what men do for the same work. If you were a woman in this situation, what could you do to increase your salary?
  2. According to this article, women are better at managing personal debt than men. How can the decision to pay off personal debt impact a person’s ability to establish a financial plan, buy a home, or invest?
  3. Pick one of the areas where men are weaker and one of the areas where women are weaker. Describe how you would improve on this factor for a man or a woman.
Mar 12 2016

Investors Eye Trump Card’s Election Impact

“The presidential election is eight months away but ‘political risk’ is already being felt on Wall Street, as money and politics collide in a flurry. . .”

In this article, Adam Shell describes how the circus-like 2016 presidential race is creating uncertainty on Wall Street.  This uncertainty centers on the candidates and how they promise to deal with select industries, trade, tax policy, and globalization.

For example, many of Donald Trump’s campaign speeches are protectionist in nature and some on Wall Street worry that Trump will build a wall around the United States choking off globalization and world trade.

For Wall Street, Hilary Clinton is also problematic.  She has been a vocal critic of the pricing practices of the pharmaceutical industry.  She is also a proponent for more regulation on the financial industry and has suggested that banks involved in speculative investments should pay a “risk fee.”

As the campaigns develops between establishment and anti-establishment  candidates, it should be an interesting run up to the November elections that could impact Wall Street and investors.

For more information, click here.  

Teaching Suggestions                           

  • You may want to use the information in this blog post and the original article to stress how politics, the financial industry, and investing are intertwined.

Discussion Questions

  1. How do you think the uncertainty associated with this presidential election affects the financial markets and investing?
  2. Why could protectionism hurt the U.S. economy and Wall Street investors?
  3. Is globalization good for the U.S. economy? Is it good for investors?
Feb 20 2016

Successful Financial Goals

Financial goals are communicated in many formats, and are good to have. However, too often, a goal is lacking the “why.”  While various financial planning actions are beneficial, quite often, little thought is given to the motivation behind a certain goal. Without this “why,” minimal internal motivation is likely to be present to see a goal to completion. The “why” of a financial goal will help you persevere when encountering challenges that could derail your achievement of a goal.

Not being able to answer the “why” may indicate that the goal is not worth your efforts. The “why” will also assure that a goal provides a higher level of satisfaction when it is achieved.  The process may require a series of “why” questions as you respond to the initial “why.”

Instead of being an afterthought, the “why” of your financial goals should be a driving force in creating and achieving these personal economic objectives. Be able to decide if a goal is a result of advertising, societal influences, or reflective thought about your personal financial situation. This action should result in meaningful goals rather than just efforts to accumulate more money or more stuff.

For additional information on financial goals, click here.

 

Teaching Suggestions

  • Have students talk to people to create examples of financial goals.
  • Have students ask a series of “why” questions to help other people to better focus their personal financial goals.

Discussion Questions 

  1. What are common motivations that influence personal financial goals?
  2. How might a person better understand the motivation behind personal financial goals?
Feb 6 2016

The Gig Economy

Online selling, personal taxi services such as Uber, and renting a spare room to tourists, are examples of an increasing number of people generating or supplementing their incomes by trading goods and services online.  This trend is often replacing traditional employment.

Measurement of the “gig economy” (working outside a formal work environment with temporary, short-term employment by independent workers) is difficult.  Many situations are not reported in current labor statistics. In recent years, the fastest growth for self-employed workers has been in hairdressing, cleaning, and management consulting. While these services may be in the gig economy, this trend may also indicate growing formal self-employment in these fields.

Gig economy activities may start as temporary work due to a lay-off or a need to supplement household income. However, as time goes by, these self-employment positions can become a person’s ongoing employment status.

For additional information on the gig economy, click here.

Teaching Suggestions

  • Have students describe examples of the “gig economy.”
  • Have students explain the “gig economy” to others (including different generations) and get their reactions.

Discussion Questions

  1. What factors influenced the development of the gig economy?
  2. How might the gig economy affect a person’s financial planning activities?
Jan 2 2016

Personal Finance Quizzes

Need a lecture launcher to start your Personal Finance course?

Here a few links for resources:

Kiplingers Personal Finance Quizzes

LearnVest Quizzes

Financial Football Game

Teaching Suggestions

You may want to use the links in this blog post:

  • as a lecture launcher for the first day of your Personal Finance course.
  • to preview important personal finance topics that will be covered in the course.
  • stress why everyday decisions can make a “big” difference in the quality of a person’s life over a long period of time.

Discussion Questions

  1. How many of the questions did you get right?
  2. Do you understand why your incorrect answers are wrong and why there is a better answer?
  3. How can the questions in this quiz help you improve your ability to manage your personal finances and improve the quality of your life now and in the future?
Oct 28 2015

Financial Fragility of American Households

A recent study from the Federal Reserve reports that almost half of consumers are not able to come up with $400 to cover an emergency expense.  In contrast, the study of 5,800 Americans reported that almost one-third of Americans believed their income would increase in the upcoming year.  However, many appear to be living one big expense away from financial disaster.

Other findings of the study include:

  • Forty-seven percent didn’t have the cash to pay for a $400 emergency expense.
  • One in five participants in the study reported spending amounts greater than their income.
  • “Underemployment” is a major concern for workers since part-time work often means a lack of benefits, especially health care coverage.
  • Nearly one in five Americans has nothing set aside for retirement; 39 percent of report that they have either given no thought or only a little to planning for retirement.

Despite these difficulties, Americans have seen a “mild” improvement in how they view their economic well-being since the recession ended. About 40 percent reported they were either “somewhat” or “much better” off than they were in 2009.

The report reflected that the recovery is only benefiting some.  About half of college-educated respondents said they are better off than in 2009; only 37 percent of those without a bachelor degree reported an improved economic situation.

For additional information on the financial fragility of Americans, click here.

Teaching Suggestions

  • Have students talk to various people about their economic situation compared with five years ago.
  • Have students create survey questions that might be used to measure the financial condition of a household.

Discussion Questions 

  1. What are common measurements of personal economic well-being?
  2. How might a person take action to improve personal economic well-being?
Oct 21 2015

Teaching Financial Literacy

While science, math, and history are vital for academic and career success, many high school graduates lack knowledge of basic money management skills.   Along with other subjects, effective financial education should be rigorous, relevant, meets standards, and have engaging learning experiences. Those teaching personal finance should be well-qualified and supported by adequate resources.

In recent years, financial education is referred to as financial literacy or financial capability.  In the past, these topics were taught in math, social studies, business and, consumer science (previously called home economics) courses.  More recently, an extensive number of free or low-cost financial literacy programs and resources have been developed.  Financial institutions, businesses, government agencies, professional associations, and non-profit organizations have collaborated in this effort.  The National Standards in K-12 Personal Finance Education, published by the Jump$tart Coalition for Personal Financial Literacy, provides teachers with a guidance.

For additional information on teaching financial literacy, click here.

Jump$tart Coalition for Personal Financial Literacy

Teaching Suggestions

  • Have students ask people to describe their definition of “financial literacy.”
  • Have students develop a learning activity to effectively teach financial literacy.

Discussion Questions 

  1. What are considered to be the main elements of financial literacy?
  2. Why is financial literacy important for all students?
Sep 12 2015

10 Reasons You Will Never Get Out of Debt

“Do you feel as if you’ll be in debt forever?  You’re not alone.”

According to a CreditCards.com survey, 13 percent of Americans say they’ll never pay off all their loans, and another 8 percent say they won’t pay off what they owe until they’re 71 years old.  While the results of the survey are discouraging, this Kiplinger article describes the following 10 reasons people can’t get out of debt and also provides suggestions for getting out of debt.

  1. You don’t know how much you owe.
  2. You pay only the minimum.
  3. Your mortgage is too big.
  4. You took out too many student loans.
  5. You can’t say no to your kids.
  6. You don’t have money for emergencies.
  7. You feel a sense of entitlement.
  8. Your car loan is too long.
  9. You rack up late fees.
  10. Your interest rates are too high.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Explain how people get in trouble when they make financial decisions without considering the consequences.
  • Go into more detail about how each of the 10 reasons described in this article affect an individual’s financial future.

Discussion Questions

  1. How do you plan to balance your objective of creating an enjoyable and entertaining life with the objective of building a secure financial future?
  2. Based on the 10 reasons in this article, what steps can you take to improve your financial planning for the future.
Aug 26 2015

Many Americans Have No Savings

About three in ten Americans have no emergency savings, according to a study conducted by Bankrate.com. This number has increased in recent years, mainly due to the lack of growth in household income. Without an emergency fund, people tend to encounter even greater financial difficulties. A person will often use high-interest debt to cover unexpected expenses. In addition to the 29 percent with no savings, another 21 percent have less than three months worth of expenses saved.

For additional information on emergency savings, click here.

Teaching Suggestions

  • Have students ask several people who their might cope with a financial emergency.
  • Have students create a plan for creating a emergency savings fund.

Discussion Questions 

  1. What are methods that might be used to cope with a financial emergency?
  2. How might a person be encouraged to create an emergency fund?