Tag Archives: money management

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?
Aug 22 2015

Vital Financial Concepts To Teach Children

Learning at home is the starting point for teaching children about money. These eleven key personal concepts should be explained and experienced by children as they are growing up:

  1. Saving
  2. Budget
  3. Loan
  4. Debt
  5. Interest
  6. Credit card
  7. Taxes
  8. Investment
  9. Stock
  10. 401(k)
  11. Credit score

The age at which these concepts are taught will vary.

For additional information on teaching vital personal finance concepts to children, click here.

Teaching Suggestions

  • Have students describe how they learned about these concepts.
  • Have students conduct a survey among young consumers to determine their knowledge of these topics.

Discussion Questions 

  1. What additional personal finance concepts might be added to this list?
  2. What actions might parents take to teach these concepts to their children?
Jul 4 2015

Quiz: What’s Your Financial SPF Factor?

“So put aside that beach read for a few minutes and take this quiz to assess your financial SPF factor.”

While most people recognize SPF as standing for sunscreen, SPF–as defined in this article stands for Save, Protect, and Fund.  After a brief explanation of each SPF financial term, the article asks 11 questions that someone can use to help gauge their financial knowledge and financial planning skills.

At the end of the quiz, you are also told how your answers stack up and then the article provides suggestions about how to improve not only your score, but also your ability to plan for your financial future and retirement.

For more information, click here.

Teaching Suggestions

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

  • Stress the importance of effective financial planning over your lifetime.
  • Begin a discussion about the benefits of long-term investments.
  • Review time value of money calculations.

Discussion Questions

  1. How can financial planning help you obtain your goals and objectives?
  2. Why should you begin investing sooner rather than later?
  3. A common problem for some people is they don’t have the money they need to begin an investment program. Given your current circumstances, what steps can you take to “find” the money to start an investment program?
Mar 7 2015

THINGS NOT TO BUY

To avoid wasting money, financial experts suggest cutting back on items that might not best serve your needs, such as:

  • cable television, since there are less expensive alternatives such as online streaming, which save a person over $800 a year.
  • name-brand razor blades costs can be reduced by using a membership program or by shopping at a discount retailer.
  • bottled water costs can reduced by using a home purification system.
  • USB drive costs can be reduced with the use of cloud storage.

For additional information on wise buying, click here:

Teaching Suggestions

  • Have students talk to others and create a list of items on which money is often wasted.
  • Have students suggest lower-cost alternatives for various items that are purchased regularly.

Discussion Questions 

  1. What actions can be taken to find low-cost alternatives for items that are purchased frequently?
  2. Explain short-term and long-term financial benefits of saving money on items that are purchased frequently.
Feb 7 2015

Wedding Costs and Marriage Success

The average cost of a wedding is nearly $30,000 and the average engagement ring cost is about $5,500.  However, a high-cost wedding does not ensure a long-term marriage.  A study by two economists at Emory University concluded that “marriage duration is inversely associated with spending on the engagement ring and wedding ceremony“.

Other findings of the research included:

  • spending between $2,000 and $4,000 on an engagement ring was associated with a 1.3 times greater chance of divorce compared to spending between $500 and $2,000.
  • spending between $2,000 and $4,000 on the engagement ring was associated with two to three times the probability of reporting being stressed about wedding-related debt relative to spending between $500 and $2,000.
  • spending less than $1,000 on the wedding is associated with an 82 to 93 percent decrease in the chance of reporting being stressed about wedding-related debt relative to spending between $5,000 and $10,000. 

While money is important in marriage and life, being materialistic can result in relational difficulties.

For additional information on the wedding costs and marriage success, click here:

For the research paper, click here:

Teaching Suggestions

  • Have students research actions that may be taken to reduce wedding costs.
  • Have students interview people about their experiences related to planning a wedding. 

Discussion Questions 

  1. What financial difficulties might result from overspending for a wedding?
  2. How might a couple reduce weddings costs?
  3. Describe actions that might be taken to as alternatives for an expensive wedding.
Jan 31 2015

What is your Personal Savings Rate?

The average personal savings, as a percentage of income, in the United States, has averaged about five percent.  To calculate your own personal savings rate, take these steps:

  1.  Total your savings for the year, including non-retirement savings, personal retirement contributions, and employer retirement contributions. The amount could be negative if you took on more debt than the total of your savings.
  1. Determine your total income by adding your take-home pay (after subtracting income taxes) to the amount your employer contributed to your retirement account.
  1. Calculate the personal savings rate by dividing (1) by (2).

For additional information on personal savings rates, click here.

Also, to see information about savings rates and other statistics, click here.

Teaching Suggestions

  • Have students calculate their person savings rate.
  • Have students interview several people to determine actions that are commonly taken to increase a person’s savings rate. 

Discussion Questions 

  1. What actions might be taken to increase savings?
  2. Describe financial difficulties that may occur when a person has inadequate savings.
Jan 10 2015

5 Questions to Help You Get Your Financial Life in Order

“Rather than making resolutions . . . try answering the following five questions today, with a plan to answer them again when 2015 comes to a close.”

In this MarketWatch article, Chuck Jaffe poses the following 5 questions to help people gauge their financial health.

  1. What’s your net worth?
  2. How many times your current (or last) salary do you have in retirement savings?
  3. What’s your debt-payment burden?
  4. If you don’t see the next New Year, what would happen to your family financially?
  5. When reviewing your finances, what is the single thing that makes you feel the best? The worst?

In addition to the questions, Mr. Jaffe also provides information that can be used to improve a person’s answers  to each question with the goal of helping people manage their personal finances and improve their financial life.

For more information, click here.

Teaching Suggestions

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

  • Discuss each question with your students and explain how their answers can impact their personal financial decision making and financial security?
  • Ask students to answer one or more of the questions in this article as an assignment.

Discussion Questions

  1. Why is your net worth, salary, savings, and debt-payment burden important?
  2. What implications does the question “If you don’t see the next New Year, what would happen to your family financially?” have on your financial planning activities?
  3. When you look at your finances, what makes you feel good and what makes you feel bad? Based on your answer, what can you do to change your answers to this question?
Dec 13 2014

Great Ways to Save

“Can running shoes save you money?  Yes – and we have six more ideas to help you save.”

Let’s begin with the answer to the above question.  As the article points out, buying running shoes can save you money because running reduces the risk of heart disease and stroke, lowers blood pressure, and can help prevent other health problems that can cause huge medical bills and even loss of employment or your life.

The above is just one of the suggestions in this article that describes ways to increase savings and provide additional money for investments by taking simple steps that you can make in your everyday life.  Additional suggestions (and the reasons behind the suggestions) include maxing out your savings, saving spare change, choice of gasoline for your car, getting the best value when choosing a hotel, encouraging your kids to save, and bundling communication bills.

For more information go to http://money.cnn.com/2005/06/02/pf/smartest_saving_0507/index.htm

Teaching Suggestions

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

  • Stress the fact that savings can be easier than you think by taking advantage of everyday opportunities to increase the amount of money you save and invest.
  • Use the example in the article about how increasing the amount of money contributed to your 401(k) retirement account can significantly increase the amount available when you retire.
  • Note: This article is just one of a series of articles in the Money series “50 Smartest Things to Do With Your Money.”  You may want to (or have your students) visit this web site for other articles on money management.

Discussion Questions

  1. Some people say that saving small amounts of money doesn’t really help accomplish their long-term financial goals. Do you agree or disagree?
  2. How can one of the suggestions in this article help you increase the amount you save or invest?
Nov 26 2014

Trick yourself into saving

Saving money can be automatic with some simple actions that would reduce your monthly spending.  Some actions, which can include lowering your monthly cash outflows by as much as $400, include:

 

  • Using a programmable thermostat which can be used to automatically raise and lower the temperature in your home, resulting in energy savings.
  • Increasing insurance deductibles for your home and auto insurance which will likely result in an annual savings of several hundred dollars.
  • Practicing less aggressive driving; using a constant speed can save money on fuel costs.
  • Seeking out ways to reduce your communication bills, such as using basic cable along with streaming video on your computer. Also, using a free texting app on your phone.
  • Using a refillable water bottle can save hundreds of dollars by not buying bottled water.

 

To ensure that you actually save this money, each month, have funds automatically moved into a savings account or investment program.

For additional information on saving, go to:

http://www.bankrate.com/finance/video/saving-money/trick-yourself-into-saving.aspx#ixzz3IKDG71pN

Teaching Suggestions

  • Have students conduct online research to determine various actions to reduce spending and increase savings.
  • Have students interview several people to determine various actions that might be considered for reducing spending.

Discussion Questions 

  1. What actions have you taken to reduce spending and increase savings?
  2. Explain short-term and long-term benefits of reduced spending.

 

 

Sep 17 2014

The Credit Card Mistake That’s Costing Millenials

“A new survey from BMO Harris Bank shows consumers are confused on how credit card balances affect credit scores. . .”

While using a credit card is one of the easiest ways to build credit, there are plenty of misconceptions about how best to do that.  According to this survey

  • 39 percent of Millennials—people between ages 18 to 34—believe carrying a balance increases their credit scores. In fact, carrying a balance does not improve credit scores and can actually hurt scores.
  • 23 percent of those surveyed indicated that a person’s educational level affects his or her credit score. In fact, a credit score is based only on the information in your credit report, and educational level is not included in your credit report.
  • 27 percent of those surveyed thought checking their credit scores would lower their credit score. In fact, the opposite is true:  If you regularly check your credit scores, it’s likely you’ll make financial decisions that will improve your credit score.

For more information go to http://finance.yahoo.com/news/credit-card-mistake-thats-costing-103040745.html

Teaching Suggestions

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

  • Discuss why a credit score is important.
  • Stress the importance of “managing” credit card debt.

Discussion Questions

  1. What affect will your credit score have on the finance charges you pay for credit purchases?
  2. How can your credit score affect your ability to purchase a home or an automobile?
  3. Assume you have a low credit score and have been turned down for a home mortgage. What steps can you take to increase your credit score?