Category Chapters

Nov 24 2020

ELECTRIC CARS

As technology improves, electric vehicles, also referred to as EVs, are increasing in popularity. The benefits of EV are the result of:

  • being environmentally friendly with no emissions
  • nearly silent engine sound
  • potential tax credits have been available in recent years
  • lower operating costs and maintenance expenses
  • smartphone apps to program charging times and to heat or cool the passenger cabin in advance of driving

Common concerns associated with EVs include:

  • the higher initial cost
  • short driving ranges for some models and in cold weather and on steep inclines
  • slow charging time, which are improved with new technology
  • charging stations may not always be available
  • loss of cargo space for the battery pack
  • lower towing capacities than with a conventional vehicle

The two main EV types are battery electric vehicles (BEVs) only running on electricity, and plug-in hybrid electric vehicles (PHEVs) that use electricity for a limited distance before switching to a gas-electric hybrid mode. Some models have an onboard generator to create electricity for greater driving distances.

For additional information on electric cars, go to:

Link #1

Link #2

Link #3

Teaching Suggestions

  • Have students conduct online research to determine current models, prices, and operating costs of electric cars.
  • Have students conduct an interview with someone who owns an electric car or hybrid to obtain information about the person’s experiences.

Discussion Questions 

  1. What factors should a person consider when buying an electric car?
  2. Describe future developments that might make electric cars more attractive to car buyers.

 

Nov 7 2020

Fill out the FAFSA

For many people, how to pay for a college education is one of the major financial decisions before deciding on a school. There are many different ways to pay for college. Understanding your choices can help you make the right decision for your situation.

Start by completing the Free Application for Federal Student Aid (FAFSA)

A critical first step for many prospective students is to complete the FAFSA . FAFSA completion is an important part of the student aid process.

Due to the coronavirus pandemic, some states have extended their FAFSA deadlines. . Contact your school’s financial aid office to find out if their priority FAFSA deadline has been extended.

Why fill out the FAFSA?

Filling out the FAFSA is required if you want to apply for federal assistance, including grants, loans and work study. Your eligibility for need-based federal aid, such as Pell Grants and subsidized student loans is determined by your FAFSA submission.

Filling out the FAFSA does not commit you to taking out student loans or accepting the financial aid offered. However, if you do not submit a FAFSA you will not be able to access federal grants or other forms of federal financial aid.

In addition, states typically require students to complete the FAFSA to qualify for state grant programs, and most colleges and universities will not consider awarding any institutional aid, until the FAFSA has been submitted.

Even if you have not finalized your plans for this fall, consider filling out the 2020-2021 FAFSA sooner rather than later, many state and schools award aid on a first-come, first-serve basis and may have established earlier, “priority” deadlines. If you miss a key deadline to complete the FAFSA, you will limit your ability to qualify for state or institutional funding.

For more information:

finaid.org

http://studentaid.ed.gov

Teaching Suggestions

  • Ask students why it is important to complete the FAFSA form sooner than later?
  • What basic information is needed before beginning the FAFSA application process?

Discussion Questions

  1. Where can you get assistance if you need help in filling out the FAFSA form?
  2. Why is important to take advantage of any scholarships and grants before applying for a federal loan?
Oct 24 2020

Bizarre Money Habits

During difficult times, as well as in other times, saving money is difficult. While high-tech and app methods may work, traditional actions can result in quickly increasing your wealth. These weird-sounding saving habits suggested by millennials include:

 

  • Save a certain denomination of money. People who get paid in cash or receive change suggest saving every five-dollar bill, for example, in an envelope. This money can be used for fun activities, a special dinner, or to add to your long-term savings.
  • Use a jar to control spending. Put a set amount of cash in a decorated jar for lunches, eating out, or other budget item. Having to actually pull money out of the jar will make you more cautious of your spending habits.
  • Skip buying certain items. Avoid coffee, soft drinks, snacks, or other impulse items, and save that amount. These small amounts can add up to larger sums saved. 
  • Make use of recurring payments. If you are paying each month for a car payment, when the vehicle is paid off, keep sending that amount into a savings account.
  • Save in short sprints. For one month, avoid eating away from home and bring lunch to work. This reduced spending can make you more aware of your spending habits and increase amounts saved.
  • Pay for your drinks (or snacks) at home. Every time you have a soft drink, other drink, or snack, “pay” for it be setting aside the “price,” such as $1 for a soft drink or $2 for a bag of chips. These funds will add up for your savings.
  • Visualize your savings goal. Display a photo or other visual as a reminder of items you plan to buy or when saving for holiday gifts or a vacation.
  • Actually, freeze your credit card. Place your credit card in a bag or container of water and place it in the freezer.  This action can help avoid impulse purchases, and you can easily defrost it under warm water when you need to pay for an emergency.

For additional information on unusual money actions, click here.

Teaching Suggestions

  • Have students talk with others to obtain other ideas that they use to save money.
  • Have students create a video or other visual that might be used to encourage people to spend less and save more.

Discussion Questions 

  1. Why do most people have a difficult time saving money?
  2. Describe personal action that you have used to spend less and save more.
Oct 10 2020

Resources to help you avoid scams during the COVID-19 Pandemic

Scammers are taking advantage of the coronavirus pandemic to con people into giving up their money. During this time of uncertainty, knowing about possible scams is a good first step toward preventing them.

Beware of these corona-related scams:

Vaccine, cure, air filters, and testing scams

The FTC warned  about an increasing number of scams related to vaccines, test kits, cures or treatments, and air filter systems designed to remove COVID-19 from the air in your home. There is no vaccine for this virus, and there is no cure. If you receive a phone call, email, text message, or letter with claims to sell you any of these items–it’s a scam.

What to do instead: Testing is available  through your local and state governments, but these tests are not delivered to your house.

Fake coronavirus-related charity scams

A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real to get money from you. Be careful about any charity calling you and asking for donations. Also be wary if you get a call following up on a donation pledge that you don’t remember making–it could be a scam.

What to do instead: If you are able to help financially, visit the website of the organization of your choice to make sure your money is going to the right place.

“Person in need” scams

Scammers could use the circumstances of the coronavirus to pose as a grandchild, relative or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and ask you to send money. They may ask you to send cash by mail or buy gift cards. These scammers often beg you to keep it a secret and act fast before you ask questions.

What to do instead: Don’t panic! Take a deep breath and get the facts. Hang up and call your grandchild or friend’s phone number to see if the story checks out. You could also call a different friend or relative. Don’t send money unless you’re sure it’s the real person who contacted you.

Scams targeting Social Security benefits

While local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease  Social Security benefit payments or Supplemental Security Income payments due to the current COVID-19 pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period. Any communication that says SSA will suspend or decrease your benefits due to COVID-19 is a scam, whether you receive it by letter, text, email, or phone call.

What to do instead: Report Social Security scams to the SSA Inspector General online at oig.ssa.gov .

For more information, go to: click here.

Teaching Suggestions

  • Ask students if they or their families have received calls from scammers. If so, what was their response?
  • Ask students to prepare a list of actions to take if they receive calls from scammers. Share the list with others.

Discussion Questions

  1. Why is it important to do your homework when you donate to a charity? should you donate in cash, by gift card, or by wiring money?  Why or why not?
  2. What should you do if you receive a call, an email, text message, or a letter claiming that an air filter system will remove COVID-19 from the air in your home?
  3. How would you handle any communication which claims that Social Security will suspend or decrease your benefits due to COVID-19 pandemic?
Sep 26 2020

COVID-19 FINANCIAL LESSONS

The finances of many people have been greatly affected by the COVID-19 pandemic.  Some of these recent financial situations are:

  • Large numbers of households lacked an emergency fund, and were not prepared for unexpected financial difficulties.
  • People who encountered difficulties making their mortgage and rent payments were offered relief and protection options to avoid losing their place of residence.
  • Monthly payments and interest on student loans were suspended until a later date.
  • Consumers lost nearly $80 million as a result of coronavirus-related fraud. Some common scams were offers to receive stimulus checks sooner, fraudulent unemployment claims, threats of utility shutoffs, online shopping and price gouging for high-demand products such as sanitizer and paper goods.
  • COVID-19 surcharges were added by some businesses and restaurants to cover increased cleaning, sanitation, and food costs. Some dentist offices added an “infectious disease” or a “personal protective equipment” charge.
  • A coin shortage resulted from banks and coin-heavy businesses being closed, lower U.S. Mint production, and increased contactless payments. To adapt, stores gave store credit or a free drink or chips when coins were not available for correct change.

For our current and future times of crisis, these money management suggestions are offered:

  1. Learn about federal, state, and local government assistance programs.
  2. Reassess and review your budgeting priorities.
  3. Reduce and avoid debt; contact creditors to discuss revised payment plans.
  4. Start to rebuild your savings cushion.
  5. Use online tools for managing finances and to automate savings and payments.
  6. Increase your awareness of possible frauds and scams.

For additional information on managing money during COVID and future times of crisis, go to:

Link #1

Link #2

Link #3

Teaching Suggestions

  • Have students talk to others about the financial difficulties and actions taken in recent months.
  • Have students create a video with suggested actions that a person might take when facing financial difficulties.

Discussion Questions 

  1. What are reasons that people might not prepare for unexpected financial difficulties?
  2. Describe actions you might take to prepare for unexpected financial difficulties.

 

Sep 12 2020

Protecting your credit during the coronavirus pandemic

Your credit reports and scores play an important role in your future financial opportunities. You can use the steps below to manage and protect your credit during the COVID-19 (coronavirus) pandemic.

Get a copy of your credit report

If you haven’t requested your free annual credit reports, you can get copies at AnnualCreditReport.com. Each of the three nationwide credit reporting agencies (also known as credit reporting companies) – Equifax, TransUnion, and Experian – allow you to get your report for free once every twelve months. You can request additional reports for a small fee if you’ve already received your free report. Be sure to check your reports for errors and dispute any inaccurate information.

If you can’t make payments, contact your lenders

Many lenders have announced proactive measures to help borrowers impacted by COVID-19. As with other natural disasters and emergencies, they may be willing to provide forbearance, loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. Some lenders are also saying they will not report late payments to credit reporting agencies or waiving late fees for borrowers in forbearance due to this pandemic. If you feel you cannot make payments, contact your lenders to explain your situation and be sure to get confirmation of any agreements in writing.

Credit reporting under the CARES Act

The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act places special requirements on companies that report your payment information to credit reporting companies. These requirements apply if you are affected by the coronavirus disease pandemic and if your creditor makes an agreement (called an “accommodation” in the Act) with you to defer a payment, make partial payments, forbear a delinquency, modify a loan, or other relief.

How your creditors report your account to credit reporting companies under the CARES Act depends on whether you are current or already delinquent when this agreement is made.

  • If your account is currentand you make an agreement to make a partial payment, skip a payment, or other accommodation, then the creditor is to report to credit reporting companies that you are current on your loan or account.
  • If your account is already delinquentand you make an agreement, then your account will maintain that status during the agreement until you bring the account current.
  • If your account is already delinquent and you make an agreement, and you bring your account current, the creditor must report that you are current on your loan or account.

For more information, go to: click here.

Teaching Suggestions

  • Ask students if they have requested their free credit reports from Equifax, Experian, and Trans Union. If so, did they find any errors?  What did they learn from the credit reports?
  • Encourage students to request their credit reports if they have never obtained one from the credit reporting agencies.

Discussion Questions

  1. Why is it important to contact your creditors as soon as possible if you can’t make payments on time? What are the consequences if you don’t?
  2. What are the special requirements that the CARE Act places on companies that report your payment information to credit reporting agencies? Under what circumstances these special requirements apply?
Aug 22 2020

Should you Pay Off Your Mortgage Early?

Traditional wisdom encourages you to pay off your mortgage faster by taking a 15-year mortgage instead of 30 years, or by paying an additional principal amount each month. However, these actions have risks. If you encounter financial difficulties and don’t have an emergency (reserve) fund, you could face foreclosure. Be sure your emergency fund has enough to cover several months of mortgage payments to avoid losing your home.

Some financial advisors suggest that if your reserve fund earns a rate greater than your mortgage rate (also taking into account tax benefits), you may decide to invest rather than pay down your mortgage. This approach could give more flexibility when encountering an economic downturn, which might include refinancing your mortgage at a lower interest rate.

Also, beware of organizations promising to help you make additional mortgage payments. You can do this on your own, without the fee they will likely charge.

For additional information on paying off your mortgage early, click here.

Teaching Suggestions

  • Have students talk to others about the benefits and drawbacks of paying off a mortgage early.
  • Have students develop a visual to compare paying off a mortgage early with saving and investing additional funds instead.

Discussion Questions 

  1. What are the benefits and drawbacks of paying off a mortgage early?
  2. Describe actions to take when trying to decide if to pay off a mortgage early.
Aug 15 2020

Want a retail store credit card?

Retail store cards are credit cards that can be used only in a single store or at an affiliated group of stores. Like other credit cards, a store card will show as a line of credit on your credit report.

The advantage of these cards is that they tend to be easier to get, even if you have a poor or limited credit history. If you’re able to make consistent and on-time payments, a retail store card can be one way to help you build or improve your credit .

The disadvantage is that retail store cards may carry higher interest rates than traditional credit cards.  Also, if the card has a deferred-interest promotion, you could end up paying even more in interest if your balance isn’t fully paid off by the end of the promotional period.

Six rules for using your store credit card wisely 

  1. Watch your overall spending during the holidays
  2. Pay your bill on time
  3. Understand the differences between zero-interest and deferred-interest promotions
  4. Limit the number of cards you apply for
  5. Don’t get close to your credit limit
  6. Act fast if you can’t pay your bills

For more information, go to

https://www.consumerfinance.gov/about-us/blog/six-tips-when-offered-retail-store-credit-card/

Teaching Suggestions:

  • Ask students if they have any retail store credit cards. If so, what has been their experience?  Share the information with classmates.
  • Ask students to make a list of possible advantages or disadvantages of retail store credit cards. Share the list with the class.

Discussion Questions:

  1. If there is a deferred-interest promotion, why is it important to pay off deferred balance in full before the end of the promotion period?
  2. If you already have several other credit cards, will you be able to manage one more card?
  3. What is the difference between zero-interest and deferred-interest promotions?
Aug 8 2020

Virtual Interviews

Lock-downs, sheltering in, and remote working have increased online and virtual interviews.  To prepare for this activity, consider these suggestions from career planning experts.

  • Some things haven’t changed. Maintain a professional appearance. Wear solid colors; stripes and patterns can be distracting.
  • Plan a quiet environment. Keep the door and windows closed; silence your cell phone. Close other sites on your computer to avoid pop-ups and maintain focus. Remove pets and children from the area to prevent distractions.
  • Select an appropriate background. Clutter and other home items should be out of sight. Set up a blank background that doesn’t clash with your clothing color.
  • Use a small chair. Check your lighting to avoid shadows and glares. Natural light is usually best, but beware of direct backlighting, like a window behind you.
  • Choose an appropriate camera angle so the interviewer can clearly see you. Avoid using a phone for a video interview.
  • Test in advance and practice. Try out the software, and install a backup copy on a second device. Do a test run before the interview day to verify that audio, video, and lighting are appropriate. Record your practice session to view how you might improve.
  • Check your time, especially if in a different time zone.
  • Maintain eye contact with the camera. Set notes on the wall behind the screen with reminders of key points and questions to ask.
  • Show energy and enthusiasm. Move around and do light exercises before you start.

LinkedIn has introduced software when preparing for a virtual interview. Artificial intelligence programs give feedback on practice answers for common questions. The critique includes an assessment on pacing, use of filler words, and phrases to avoid.

For additional information on virtual interviews, go to:

Article #1

Article #2

Teaching Suggestions

  • Have students practice their interview skills for a virtual interview.
  • Have students talk to others about methods used to prepare for an interview.

Discussion Questions 

  1. What are the main differences between an in-person and virtual interview?
  2. Describe benefits and drawback that might be present when using artificial intelligence to prepare for a virtual interview.
Aug 1 2020

Neobanks

Banking options continue to expand. Neobanks refer to financial services providers that appeal to information-hungry consumers comfortable with technology. Many are FinTech start-ups that offer checking and savings accounts, debit cards, loans, and budgeting guidance through digital channels and mobile apps.

Neobanks typically do not have physical bank locations, although some partner with existing banks or credit unions. Some consider PayPal an early neobank example as a result of being linked to bank accounts and payment cards. More recent examples of neobanks include GoBank (a brand of Green Dot Bank), SoFi Money, Varo Money, Wells Fargo’s Greenhouse, and Chase’s Finn.

Commonly viewed benefits of neobanks are:

  • lower costs than most traditional financial institutions; access to large ATM networks with no fees.
  • attractive to underbanked and unbanked consumers who use prepaid cards, check-cashing services, and consumer credit companies.
  • clear communication of fees and charges; usually no overdraft penalties since you can only spend what is in your account,
  • enhanced technology for basic banking activities as well as algorithms for budgeting, money management, and wise spending.
  • ease of loan approval with technology-based methods for obtaining credit, along with access to loans by smaller enterprises.

Some concerns associated with neobanks include:

  • a lack of physical bank branches.
  • may not be chartered as financial institutions with government regulators, also lacking deposit insurance.
  • no recourse may be available when malfunctions occur with an app or mobile connection.
  • not appropriate for individuals who make cash payments and deposits.

As banking alternatives evolve, neobanks will likely become more numerous expanding into new products and services. At the same time, traditional financial institutions will seek ways to offer FinTech products to serve an expanding technology-oriented customer segment.

For additional information on neobanks:

Link #1

Link #2

Teaching Suggestions

  • Have students propose services that might be offered by neobanks to enhance financial literacy and improve money management skills.
  • Have students create a video or in-class presentation that communicates the positive and negative aspects of neobanks.

Discussion Questions 

  1. What actions would you recommend to others before using a neobank?
  2. Describe possible actions that might be taken by traditional financial institutions to counter the potential loss of customers to neobanks.