financial education http://www.wisebread.com/taxonomy/term/8846/all en-US Want Financial Education in Schools? Follow the Example of One Kansas Teen http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/high_school_student_828456866.jpg" alt="High school student learning financial literacy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I&rsquo;m a native Kansan. I&rsquo;m a proud Jayhawks fan. My roots are deep there, and much of my family still lives there. I&rsquo;m going back home next month to celebrate my grandson becoming an Eagle Scout (the <a href="http://www.wisebread.com/is-student-loan-debt-as-bad-as-it-seems" target="_blank">same one</a> who got lost on his way to class the first day of college last fall).</p> <p>I say all this because I want to brag about something innovative that my home state has done for its students&nbsp;&mdash; and to use the example as a guide for what we all need to do to encourage the same action for financial education.</p> <p>Recently, spurred to action by a teenager who suffered cardiac arrest during a spelling bee, the Kansas Legislature passed a law requiring every high school student in the state to complete a cardiopulmonary resuscitation (CPR) course to graduate from high school.</p> <p>The American Heart Association reports that 350,000 people across the United States suffer cardiac arrest outside of a hospital each year. Only 46 percent of those victims receive CPR. Now, every high school graduate in Kansas will know how to perform CPR. That will unquestionably save lives over time.</p> <p>Emma Baker was the 13-year-old student who collapsed during a spelling bee. Her life was saved because a school administrator knew CPR and a person in the audience recognized her medical distress.</p> <p>That event drove a passion for her and her family to press for legislation to ensure that others in the future have someone there to perform CPR in the rare event that it&rsquo;s needed.</p> <p>We need to follow that example for financial education for our students across the country.</p> <p>Every single student in our schools will:</p> <ul> <li>Spend cash.<br /> &nbsp;</li> <li>Take out installment loans for major purchases.<br /> &nbsp;</li> <li>Swipe credit cards, or just point their phones at a reader to make a charge.<br /> &nbsp;</li> <li>Need to purchase insurance.<br /> &nbsp;</li> <li>Save for emergencies.<br /> &nbsp;</li> <li>And, we hope, invest for their retirement.</li> </ul> <p>Add to that the fact that there was more than $1.4 trillion in student loan debt in 2017 and more than $1 trillion in credit card debt in the United States, and it should be abundantly clear that understanding fundamental personal finance topics including credit, savings, and other basic financial concepts is a critical life skill every student needs.</p> <p>Everywhere I go, everyone I talk to wants to know why we don&rsquo;t include financial education in our schools&rsquo; curricula. The answer is simple. We don&rsquo;t make it clear to our school boards, administrators, and legislators that it&rsquo;s a priority for us as citizens and parents.</p> <p>We need to follow Ms. Baker&rsquo;s example. If we don&rsquo;t share our passion and make our voices heard, we can&rsquo;t bring change to our schools for our children. If our school boards, administrators, and legislators don&rsquo;t know that financial education is a priority for their constituents, they can&rsquo;t give it the attention it needs.</p> <h2>Financial Literacy Month</h2> <p>April is Financial Literacy Month. That would be a great time to speak with your school board members and legislators about the importance of requiring personal finance education in our classrooms.</p> <p>Another way to get involved is through the <a href="http://www.jumpstart.org/" target="_blank">Jump$tart Coalition for Personal Financial Literacy</a>. Experian was one of the founders of the organization more than 20 years ago. Today, Jump$tart has about 150 partners from the private sector, public sector, and academia. It&rsquo;s extraordinarily rare to find an organization where companies like Experian work together with government agencies like the Consumer Financial Protection Bureau, colleges and universities, and nonprofit foundations. In this case, it&rsquo;s because we all believe in the importance of personal finance education in the classroom.</p> <p>Jump$tart isn&rsquo;t an advocacy organization. It works to provide training, resources, and guidelines for effective classroom instruction. Jump$tart established <a href="http://www.jumpstart.org/national-standards" target="_blank">national standards</a> for financial education in grades K-12 and has built a clearinghouse of resources for teachers to use in their classes.</p> <p>There are Jump$tart <a href="http://www.jumpstart.org/state-coalitions" target="_blank">coalitions</a> in all 50 states, Puerto Rico, and Washington, D.C. Visit the website to learn more about what Jump$tart does and how you can volunteer to support financial education initiatives in your state.</p> <p><em>(Editor&rsquo;s note: Wise Bread is also a proud supporter of Jump$tart. Check out the recent TweetChat we co-hosted with Jump$start on the topic of <a href="http://www.wisebread.com/creating-a-financially-literate-future-for-your-kids-highlights-from-our-chat-with-jumptart" target="_blank">creating a financially literate future with our kids</a>.)</em></p> <h2>Credit tips for Financial Literacy Month</h2> <p>Throughout April, there will be financial education initiatives and events to encourage people of all ages to increase their financial knowledge. A piece of that knowledge is about credit and how to use it wisely. Here are a few credit tips in advance of Financial Literacy Month.</p> <ul> <li>Get your credit report at least once a year. It&rsquo;s free from each of the national credit reporting companies at <a href="http://www.annualcreditreport.com" target="_blank">www.annualcreditreport.com</a>. The first step to improving your credit is knowing what&rsquo;s in your credit report.<br /> &nbsp;</li> <li>Check your credit score when you get your report. You can purchase a score for a nominal fee, and you&rsquo;ll get the risk factors that go with the score. Use those factors to address the issues in your credit report to improve your credit score.<br /> &nbsp;</li> <li>The two most important factors for every credit score are your payment history and your credit utilization ratio. Pay your bills on time and keep your credit card balances low, and your scores will improve over time.<br /> &nbsp;</li> <li>Check your credit report and score several months before applying for a major loan or mortgage. Doing so will ensure you have time to address any issues with your credit history and take steps to improve your score if necessary.<br /> &nbsp;</li> <li>Join Experian&rsquo;s <a href="http://www.experian.com/blogs/news/about/creditchat/" target="_blank">#CreditChat</a> on Twitter and Periscope to learn more about personal finance and credit. We want you to be part of the conversation not only during financial literacy month, but all year long.</li> </ul> <p>Everywhere I go, parents and professionals tell me how important requiring financial education in our schools is and how concerned they are that it isn&rsquo;t.</p> <p>I&rsquo;m the wrong person to tell.</p> <p>Make your voice heard in your state. We want all our students across the country to graduate with fundamental personal financial skills.</p> <p>Have a talk with your legislators, school boards, and administrators. Only when they understand how important it is to all of us will financial education become a priority. Financial Literacy Month would be a good time to start that conversation.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwant-financial-education-in-schools-follow-the-example-of-one-kansas-teen&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWant%2520Financial%2520Education%2520in%2520Schools_%2520Follow%2520the%2520Example%2520of%2520One%2520Kansas%2520Teen.jpg&amp;description=Want%20Financial%20Education%20in%20Schools%3F%20Follow%20the%20Example%20of%20One%20Kansas%20Teen"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Want%20Financial%20Education%20in%20Schools_%20Follow%20the%20Example%20of%20One%20Kansas%20Teen.jpg" alt="Want Financial Education in Schools? Follow the Example of One Kansas Teen" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/rod-griffin">Rod Griffin</a> of <a href="http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/essential-money-lessons-for-recent-grads">Essential Money Lessons for Recent Grads</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-these-6-assets-might-affect-student-financial-aid-eligibility">How These 6 Assets Might Affect Student Financial Aid Eligibility</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-ira-shouldnt-double-as-an-education-savings-plan">Why Your IRA Shouldn&#039;t Double as an Education Savings Plan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training cpr cpr training financial education financial health financial literacy healthy habits Wed, 21 Mar 2018 19:06:30 +0000 Rod Griffin 2121990 at http://www.wisebread.com 8 Personal Finance Lessons Women Learn in Their 20s http://www.wisebread.com/8-personal-finance-lessons-women-learn-in-their-20s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-personal-finance-lessons-women-learn-in-their-20s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_summer_000023077770.jpg" alt="Woman in her 20s learning personal finance lessons" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Being in your 20s is amazing. It's filled with change; most women enter the decade as college students without any idea of what to do with their lives, only to end their 20s much more settled &mdash; oftentimes married, sometimes with kids, and frequently well into a career. Here are the eight financial lessons women in their 20s learn.</p> <h2>1. Love Has an Enormous Impact on Your Money</h2> <p>I entered my 20s dating the person I thought I would marry. I first moved across the country for them, and eventually to the other side of the world to Russia for that person. But by time I was 21, I was dating someone new. This time, it <em>was</em> the person I did marry. But going into a relationship you never really know where it is headed, and you don't know the impact it will have on your wallet. The reality is that love will impact your financial situation tremendously. It's not just about who pays for dates, but whether you share the same financial values, what type of job the other person has, whether you move or switch careers for that person. So choose your significant other wisely.</p> <h2>2. Take Big Risks With Your Job</h2> <p>Your 20s are the best time to grow in your career. In fact, a brand new study has revealed that most of your <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/10/your-lifetime-earnings-are-probably-determined-in-your-twenties/">earning potential</a> is determined in your 20s. So, it's best to find work that is meaningful and enjoyable, but that will also earn you a decent living. Now is the time to move across the country, try something totally new, go to law school or get an MBA, or quit a stable corporate job to start a business or work for a start up. What you do with your career this decade, will impact your finances for the rest of your life.</p> <h2>3. Plan for the Future: Settling Down Happens Quickly</h2> <p>Ask any 30-year-old woman what has happened to her Facebook feed in the last two years. She'll tell you it has gone from friends posting wedding and travel photos to a feed filled with her friends' baby photos. You start your first job at 22 thinking your 30-year-old coworkers are so old because they don't go out to happy hours and instead head home to be with their familes. Before you know it, you are 30, and you're the one going home to your kids and spouse, instead of out for drinks. So, use your 20s to save for this settling down that will likely happen by the time you're 30. Start saving for your wedding, for your house, and for your future children.</p> <h2>4. Spend Enough to Enjoy the Present</h2> <p>While you should save in your 20s, don't save so much for the future that you fail to enjoy the present. If you want to quit your job to travel the world, do it. It's going to be 1000 times harder to do when you're 34 than when you're 24. Plus, society is far less accepting of a 30 or 40-something year-old woman who quits her job to travel (unless you've experienced a traumatic divorce and are soul searching, a la Eat Pray Love). So spend on the big things, but also on the small. Go out for drinks with friends, to concerts, and sporting events, because you'll never be more able to than you are when you're an unsettled twenty-something.</p> <h2>5. Find a Job With Good Maternity Leave</h2> <p>Setting down happens quickly, and often when you're not even looking. You likely won't be thinking about your job's maternity leave when you say &quot;yes&quot; to your first or second or third job offer of your 20s. But you should. Chances are that you'll stay at that place of employment longer than you plan, and you'll want to be covered if you become pregnant. Choose a company with a&nbsp;<a href="http://www.wisebread.com/the-29-companies-with-the-best-maternity-benefits">good maternity leave policy</a>.</p> <h2>6. Women Still Earn Less Than Men</h2> <p>My mom likes to tell me about how when she was my age, women lawyers could wear nothing but skirt suits and pantyhose. Pant suits were simply unacceptable. At a dinner interview where spouses were invited, people assumed it was my dad interviewing, not my mom. Granted, things have changed for women since 1984; but not as much as we'd like. Women only account for 20% of corporate board seats, 20% of US Senate and House seats, and about 33% of doctors and lawyers. And women still earn about 78 cents for every dollar a man earns.</p> <h2>7. It's Good to Live Somewhere Cheap and to Live Frugally</h2> <p>Every woman in her 20s should live somewhere that is far less expensive than she can afford, and spend far less money than she reasonably could. Why? Because someday later on, when you are worried about the job market or what would happen if you got a divorce, you'll have confidence that you can get by on a lot less. It's much easier to gain this confidence at 25 than 45.</p> <h2>8. No Matter How Much You Learn About Personal Finance in Your 20s, You Don't Know It All</h2> <p>Most women learn an enormous amount about money in their 20s. We earn our first paychecks, start our 401(k)s, pay medical bills, taxes, mortgages, and more. There is a lot to learn and we mostly learn it out of necessity. But, by the time you reach your 30s, you realize that <a href="http://www.wisebread.com/7-personal-finance-lessons-women-learn-in-their-30s">there is still more to learn</a>. Thankfully, by this point, even if your finances are in rough shape, you have confidence that you can learn more and have the resources for doing so.</p> <p><em>What financial lessons have you or did you learn in your 20s?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/elizabeth-lang">Elizabeth Lang</a> of <a href="http://www.wisebread.com/8-personal-finance-lessons-women-learn-in-their-20s">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance age and money financial education money lessons women and money Mon, 02 Mar 2015 14:00:08 +0000 Elizabeth Lang 1314827 at http://www.wisebread.com 5 Financial Lessons Everyone Should Learn by Kindergarten http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-lessons-everyone-should-learn-by-kindergarten" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/child-business-suit-money-finance-Dollarphotoclub_63769669.jpg" alt="child finance" title="child finance" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We each grasp financial lessons at different points in our lives, but we're never too old &mdash; or too young &mdash; to start learning. Some lessons, however, are so basic that understanding them is nearly a prerequisite to financial survival. Whether you need a refresher yourself, or are responsible for shaping a young person's relationship with money, here are five financial lessons everyone should learn by kindergarten.</p> <h2>1. Money Represents Labor</h2> <p>At its most basic level, money is just labor in physical form. Whether you worked for it using your mind or your muscle, the green stuff is the result of some form of effort. And without making your six-year old mop the floor for a bowl of mac 'n cheese, there are ways to gently and positively make the connections between effort and financial reward.</p> <p>Of course, the secondary value of this lesson is how it can alter spending behavior. The &quot;aha moment&quot; you want to encourage goes something like this: &quot;If money is labor, then the <em>things</em> I buy with my money also represent my labor.&quot; Fully grasping that concept is the root of healthier spending behavior for life (and if you're like me, you know a shocking number of adults who still don't quite get it).</p> <h2>2. Spending Is Not the Same as Investing</h2> <p>Though each may drain our wallets and bank accounts for a period of time, <em>spending</em> and <em>investing</em> are entirely different animals.</p> <p>Dropping $3500 for a leather couch is <em>spending</em>, but using that same amount to buy a good used car that will get you back and forth to work is <em>investing</em>. Think of it this way. If the item or service you're buying will provide some sort of tangible dividend (such as the ability to stay employed, advance in a career, sell at a profit later, etc.) , it's an investment. If it doesn't meet that simple criterion, it's just plain old spending. If you haven't already, <a href="http://www.wisebread.com/5-investing-basics-that-can-make-you-rich">learn the basics of investing</a> and put its power to work for you sooner than later.</p> <h2>3. Consumer Credit Is Dangerous</h2> <p>It may not seem this way, but every time we use a credit card, we're taking out a loan. Granted, it might be a mere $3.89 for a hamburger, but it's a loan. And let's face it, the last thing credit card issuers want their customers to do is pay off their balances every billing cycle (credit card companies have an endearing term for those who do &mdash; &quot;deadbeats&quot;). They'd much rather have all those hamburgers, shoes, smartphones, and haircuts add up at a 17% percent interest rate.</p> <p>Teach your kids the dirty secrets of credit cards. Tell them about the evil geniuses that lurk behind the magnetic strip. You know, the ones who conceived the evil formula of convenience + frequent use + low minimum payments = long-term debt and high returns. Create a bedtime story about an overspending prince who became a pauper because of plastic. It's a cautionary tale for the ages.</p> <h2>4. Understanding the Difference Between Wants and Needs</h2> <p>When I was a kid, I desperately wanted a green plastic toybox shaped like a large frog. I don't remember the brand name, but I do remember wanting to own one so badly that every fiber of my 40-pound body nearly vibrated with green-plastic-frog-toybox desire. I never got it. Kids want things with such wild enthusiasm that it's difficult for them to distinguish what they want from what they need. Had I been asked way back when, I'm sure I could have made a case why that frog toybox was essential to my survival &mdash; because it certainly felt that way.</p> <p>But at any age, being able to clearly <a href="http://www.wisebread.com/what-you-need-vs-what-you-want-and-how-to-tell-the-difference">distinguish wants from needs</a> is an essential skill. Why? Because we live in an economy that's made a science of confusing the two. Indulgence and denial aside, it's the identification that matters and it's the first step of being able to live within our means.</p> <h2>5. Money Can't Buy Happiness, But It Can Buy Choices</h2> <p>The value of money rests not in its ability to make us happy, but to buy us options in life. Authentic, well-financed choice is a rare bird these days. Many of us feel like we have choices, because we're presented with so many options as consumers every waking minute. But to me, most of these sorts of choices feel low-value &mdash; &quot;trinket choices&quot; manufactured purely to encourage spending. Only the most financially disciplined can afford to exercise a potentially life-altering choice like switching careers, moving across the country, starting a business, or retiring early. This level of choice gives us the power to reinvent ourselves at any stage of life.</p> <p>Granted, these are only five lessons in a long list of financial fundamentals. But together, they form a great foundation for building security and wealth. If you're still learning, let your curiosity motivate you. And if you're helping a young person learn, be patient and avoid instilling a sense of fear about money. Remember, real power comes from understanding that money is not mysterious, wealth is not always the result of dumb luck, and financial security is within our control.</p> <p><em>What financial lessons did you learn early in life? Who taught you and how? Which ones are you still learning?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you">9 Financial Lessons People Learn in High School — Did You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education kids and money money lessons money school Fri, 27 Feb 2015 12:00:05 +0000 Kentin Waits 1308948 at http://www.wisebread.com Do You Know These 5 Financial Lessons Most People Learn in Their 40s? http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man-paying-bills-86479709-small.jpg" alt="man paying bills" title="man paying bills" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>By the time you hit your 40s, you're supposed to have figured everything out, right? Then suddenly you're 40, and guess what? Life is still pretty confusing. Join the club!</p> <p>Luckily, learning doesn't stop when you hit the <em>big four-oh</em>.</p> <p>First, let's review what you've already learned.</p> <p>In your 20s, you (hopefully) learn and apply financial lessons like the value of compound interest, the difference between good and bad debt, savings strategies like dollar cost averaging, and more. (See also: <a href="http://www.wisebread.com/the-5-most-important-financial-lessons-people-learn-in-their-20s-did-you?ref=seealso">The 5 Most Important Financial Lessons Everyone Should Learn in Their 20s</a>).</p> <p>In your 30s, you learn about balancing the budget between big-ticket items like kids, retirement, and home ownership, you choose debt (including mortgages) wisely, align yourself with financial experts, and learn to live within your means. (See also: <a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-in-their-30s-did-you?ref=seealso">5 Lessons Everyone Should Learn in Their 30s</a>).</p> <p>Now you're in your 40s, and things are changing (again). Some of the ground rules you lived by in your 20s and 30s may not serve you anymore. Here are five financial lessons that generally come to light in your 40s.</p> <h2>1. Risk Tolerances Change Over Time</h2> <p>With some investment experience under your belt and retirement still a long way away, you might be feeling a little more gutsy with your <a href="http://www.wisebread.com/asset-allocation-for-all-markets">asset allocation</a>, and want to rejig your portfolio to be more aggressive. In other cases, you might have survived a few market (and life) downturns, and are feeling more risk averse.</p> <p>This is why it's important to have regular financial reviews (ideally with your <a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner">financial planner</a>) to ensure you're feeling good about your investments, and can track your progress towards your life goals.</p> <h2>2. You're Not Invincible</h2> <p>I remember as a child, falling off my bicycle was a no-brainer: get back up and keep going. Falling off a bicycle in our 40s isn't so easy; we don't bend any more &mdash; we break!</p> <p>You might have had a health scare or serious illness or injury, and if you're lucky it didn't hurt your finances as well. In your 20s, hopefully you took advantage of good health and low premiums to insure yourself. Now it's time to do an insurance review to ensure you're properly (but not overly) covered.</p> <p>To get started, check out these Financial IQ Tests:</p> <ul> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-disability-insurance">Financial IQ Test: How Healthy is Your Disability Insurance?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-life-insurance-plan">Financial IQ Test: How Healthy is Your Life Insurance Plan?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-health-care-plan">Financial IQ Test: How Healthy is Your Health Care Plan?</a></li> </ul> <h2>3. Your Finances Aren't Invincible Either</h2> <p>Think of your finances in the same way as you and that bicycle. There is less room for mistakes and slack savings strategies the older we get, given that we have an ever-decreasing amount of time to take advantage of compound growth in order to recover. Make sure your financial health is in tip-top shape; recovering from &quot;broken finances&quot; is no easy task.</p> <h2>4. Inflation Sucks</h2> <p>Once you reach your 40s, you understand the real effects of inflation. When you were a kid a candy bar only cost about 25 cents &mdash; now it's 500% more at about $1.50! Carry this forward another 30-40 years when you're retired, and that same candy bar will be even more expensive. The money you save for retirement right now needs to go further than you think. Take inflation into account when planning for the future, and ensure your investments are structured to (at least) keep up with inflation.</p> <h2>5. 40 Is Not Old!</h2> <p>40 used to be &quot;the new 30,&quot; and now 50 is &quot;the new 40.&quot; As we age (and also live longer and longer) we realize that our younger preconceptions of certain ages has been skewed. In your 20s you might have thought that you'd have it all sorted out by your 40s (since you'll be old by then, right?), and suddenly here you are, and you're alive and kicking and still trying to figure life out like everybody else.</p> <p>Forgive yourself. You're still young. You can change careers, embark on new adventures, and make a few mistakes like the rest of us. Not only that, but you have a long time until retirement yet, so under the premise of asset allocation (and keeping up with inflation), it behooves you to keep a long-term vision for your portfolio.</p> <p><em>What crucial financial lessons did you learn in your 40s? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you">9 Financial Lessons People Learn in High School — Did You?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-play-teaches-you-about-personal-finance">5 Things Play Teaches You About Personal Finance</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-in-their-30s-did-you">5 Financial Lessons Everyone Should Learn in Their 30s (Did You?)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education financial lessons money lessons Thu, 02 Oct 2014 13:00:06 +0000 Nora Dunn 1225626 at http://www.wisebread.com 9 Financial Lessons People Learn in High School — Did You? http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-financial-lessons-people-learn-in-high-school-did-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/high-school-student-78741584-small.jpg" alt="high school student" title="high school student" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whether it be in the classroom or via real life experience, high schoolers get the chance to learn and apply a lot of the basic tenets of personal finance and money management. Some of them apply and retain the information, while others ignore, forgets or simply misunderstand it. (See also: <a href="http://www.wisebread.com/the-5-most-important-financial-lessons-people-learn-in-their-20s-did-you?ref=seealso">The 5 Most Important Financial Lessons People Learn in High School (Did You?)</a>)</p> <p>Which way did you go?</p> <p>Check below for the nine financial lessons most people learn in high school, and then ask yourself: are you (financially) smarter than a 12th grader?</p> <h2>1. Money Is Difficult to Come By</h2> <p>Many people who grow up with loans, credit cards, and other forms of debt have lost their understanding of the value of money. Money is valuable for a reason; because there is a finite amount of it. With a culture that relies so heavily on credit and debt to compensate for the finite nature of money, we tend to lose sight of the value that it really holds. High schoolers learn this by having to work for their spending money, or by receiving an allotted sum from Mom and Dad, and once it's gone, it's gone.</p> <h2>2. Budgeting Is a Weekly Task</h2> <p>Budgeting for your expenses is not a one-and-done proposition. In fact, budgeting on a weekly basis is the most prudent way to handle money, since expenses (and sometimes income) can change from week to week. Teens and young adults have to do this to pay for their gas, entertainment, or other activities they want to participate in. As adults, our approach should be no different.</p> <h2>3. Saving Money Is a Slow and Consistent Process</h2> <p>High schoolers who do try to save money learn that it's a slow and incremental process, where small contributions add up over time. Trying to put large sums of money away all at one time will be difficult, and though possible at times can cause morale to sink whenever the process can't be repeated. The trick to saving money is putting away just a little bit at a time over a long period. Consider an automatic transfer from your checking to savings account every week, set to something small like $20.</p> <h2>4. It's Not Always Easy to Get a Job</h2> <p>Teens with little experience and low job-skills know the difficulty of finding good work. Jobs, though widely available in most cases don't exist in a vacuum. They exist because someone else is making money and needs people to help them make more money. Otherwise, neither you or anyone else would be getting hired. That means in reality, a job is a precious commodity that's difficult to come by.</p> <h2>5. Frivolous Spending Should Be Limited (and Cash Only)</h2> <p>When the money set aside for going out on the weekend is gone, that's the end of the fun. At that point, most high schoolers need to go home and do something that they don't have to pay for. That's a lesson that's harder to learn when you're an adult, especially when a swipe of the credit card makes you feel like you never run out of money. But it once again highlights the importance of living by a budget and within your means.</p> <h2>6. A Cheap Car Can Be a Good Thing</h2> <p>Remember when you were happy to have any car that would get you from point A to point B? Those were good times (good enough for Brad Paisley to write a <a href="https://www.youtube.com/watch?v=pTF6UZbq9Lk">song about them</a>),and highlighted the practicality of avoiding a car payment and paying for your car in cash.</p> <h2>7. Saving for Retirement Can and Should Start Early</h2> <p>Many teens have money put away in a long-term savings account by their parents. Starting a long-term savings plan that early in life means that their money (if invested wisely) will grow at a steady rate and become a significant amount depending on the amount of cash and investment type. The key though is to understand the <a href="http://www.teensguidetomoney.com/Saving/individual-retirement-account-ira/">retirement savings options</a> and start early.</p> <h2>8. Personal Finances Are Closely Tied to Personal Freedom</h2> <p>The less you're in debt and the more you're able to stretch your money and budget for the things you want, the more personal freedom you'll have. Teens learn this quickly as they begin to drive and take on small financial responsibilities. If they carry it into adulthood the benefits are far-reaching, often helping them avoid taking on too much debt or developing lifestyles that can't be maintained by their income.</p> <h2>9. There is No Such Thing as a Free Lunch</h2> <p>Popularized by Nobel Prize-winning economist Milton Friedman, this simple phrase is often echoed by fathers in the hopes of instilling a strong work ethic in their kids. The phrase itself is meant to quickly articulate the idea that nothing in this world is truly free. Though people might give you things for free, those things still required somebody to work and pay for them. Whether we agree with it or not, it's one of the harsh realities that we face living in a society built around economics and the free market. Teens learn this quickly as they begin to transition out of their parents house and into the &quot;real world&quot; where nothing is paid for, and they're now responsible for most of their own expenses.</p> <p><em>What financial lessons did you learn in high school? Do you think more emphasis should be put on real-life finances and budgeting in high school? Let me know in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-play-teaches-you-about-personal-finance">5 Things Play Teaches You About Personal Finance</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-in-their-30s-did-you">5 Financial Lessons Everyone Should Learn in Their 30s (Did You?)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education financial lessons money lessons Tue, 26 Aug 2014 13:00:03 +0000 Mikey Rox 1195535 at http://www.wisebread.com 12 Ways Kids Can Teach Us About Money http://www.wisebread.com/12-ways-kids-can-teach-us-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-ways-kids-can-teach-us-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mom-daughter-money-156796282-small.jpg" alt="family money" title="family money" class="imagecache imagecache-250w" width="250" height="156" /></a> </div> </div> </div> <p style="margin-left: 40px;">&quot;If someone gave me $10, I would buy a toy from the movie Frozen,&quot; recently said one of my favorite 8-year-olds.</p> <p style="margin-left: 40px;">&quot;What if the store didn't have the one you wanted?&quot; asked his mom.</p> <p style="margin-left: 40px;">&quot;Then I would save my money.&quot;</p> <p>With their untarnished idealism and often very pragmatic ways of thinking, kids can teach us a lot about life &mdash; and about money.</p> <h2>1. There Is Magic in a Single Dollar Bill</h2> <p>From early on, we learn that it's fun to get money. Holding a dollar bill means we get to buy a dollar's worth of <em>something</em>. Sometimes a little treat &mdash; like candy &mdash; brings a lot of excitement. Take a kid into a bulk candy store with a dollar bill in hand, and watch the magic come alive.</p> <p>At any age, no matter the dollar amount, money translates into buying power and the ability to make choices. As adults, we can reclaim that same child-like excitement when someone gives us a $10 Starbucks gift card. It's not that the $10 will make or break our wallets, but the fact that it's a gift often adds a little magic to the coffee and scone we choose to buy with that gift card.</p> <h2>2. What You Buy Is More Important Than Where You Buy</h2> <p>Do you remember how beautiful you felt when you wore your hot pink, bedazzled T-shirt to the first day of 2nd grade? Chances are, you didn't really care whether it came from a thrift shop, a discount store, or an upscale retailer. Kids generally care about what they are wearing or receiving as a gift than where it was purchased. Many adults reverse the emphasis.</p> <h2>3. Special Purchases Are Worth the Wait</h2> <p>When a child sees a commercial for a certain doll/truck/game, that's the one they want. Kids usually have to wait if a store is out of that specific item &mdash; especially if they &quot;<em>really, really, really&quot;</em> want it. After they've seen it &mdash; at a friend's house, at school or on TV &mdash; they understand that they need to wait for an adult to first approve the purchase, and later take them to a store to make the purchase. The anticipation builds, and that makes buying (and having) it that much more satisfying.</p> <p>Adults can experience that same gratification as a result of anticipating a purchase, whether it's a new car or a new pair of sunglasses. Don't settle for what might be readily available; take a lesson from the kids and wait for the item that you <em>really, really, really</em> want.</p> <h2>4. Saving Is Fun!</h2> <p>Many parents teach their children to save money by incentivizing the process, or making it a fun challenge. Beth Kobliner, author of <a href="http://www.amazon.com/gp/product/0743264363/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0743264363&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=CLU3ARSMMUCO42EC">Get a Financial Life</a>, says that &quot;children as young as three years old can grasp financial concepts like saving and spending.&quot; She offers the following suggestion to help make saving fun: Have a child set a realistic savings goal to buy a specific item. &quot;Every time your child adds money to the savings jar, help her count up how much she has, talk with her about how much she needs to reach her goal, and when she will reach it.&quot;</p> <p>That same activity could be very gratifying for adults as we save up for big-ticket items or even small indulgences.</p> <h2>5. Money Is Finite</h2> <p>By pre-school, kids have an understanding that money doesn't grow on trees, but many still assume that it is somehow always available to grownups thanks to <a href="http://www.dailymotion.com/video/x144h7f_our-panel-of-kids-share-their-money-thoughts_people">banks, ATMs, and &quot;factories</a>.&quot;</p> <p>Still, when a child holds a $10 bill at a toy store, he knows that a $12 purchase isn't possible. As adults, with wallets full of plastic money, we sometimes forget that concept; hence the <a href="http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/">average U.S. household credit card debt</a> stands at over $15,000. The concept of &quot;buy now, pay later&quot; can land many adults in perilous waters. (See <a href="http://www.wisebread.com/what-is-your-financial-kryptonite-and-how-to-conquer-it?ref=seealso">What Is Your Financial Kryptonite &mdash; and How to Conquer It</a>)</p> <h2>6. Make Wise Choices</h2> <p>What might present itself as an agonizing decision over choosing the Matchbox sports car or fire truck can turn into excitement once the decision has been made. But it might take a lot of hemming and hawing that we can't understand (&quot;It's just a $2 toy car!&quot;).</p> <p>As much as we may like them, in some ways, liberal return policies have made us lazier consumers as adults. Kids tend to stay truer to their purchases; as such, they often make more contemplative decisions. Not a bad practice!</p> <p>At the same time, kids can teach us that it's okay to make a financial mistake. Kids rarely beat themselves up if they make a bad purchase. They tend to look to the next &quot;buying opportunity&quot; right away rather than wallow in buyer's remorse, as adults sometimes do.</p> <p>The good news: As adults, capable of higher level thinking &mdash; and making higher priced mistakes &mdash; we can take steps to avoid buyer's remorse. According to Kelly Kiyeon Lee, co-author of a report in the Journal of Consumer Research, one way to avoid is to take the time to really think about the value of the product, including short-term and long-term benefits, she says. Another is to learn from past mistakes, especially high-ticket impulse purchases.</p> <h2>7. Big Isn't Always Better</h2> <p>Kids can find the joy in a &quot;cool&quot; passageway in a tiny house, or lighted cup holders in an economy car. Sometimes, we grown-ups forget that magic, and focus on the price tag as an indicator of what's &quot;better,&quot; particularly when it comes to houses, cars or other big-ticket items. The problem is that reality limits our budgets, so while a $750,000 home may have more &quot;wow&quot; appeal, we can find the joy in the $250,000 home &mdash; or an $800/month apartment &mdash; if we open our minds to it.</p> <h2>8. Impulse &quot;Wants&quot; Are Inevitable; Impulse &quot;Buys&quot; Are Not</h2> <p>Speaking of impulse purchases, if you've ever had an &quot;assistant&quot; accompany you to the grocery store, you know that temptations lurk in certain aisles (think cereal, snack, cookie &hellip;) and other strategic locations throughout the store. End caps and checkout lanes can be present particularly brutal challenges. Fortunately, as the wallet-holding adult, you can moderate their impulse wants, and put the kibosh on the impulse buys. As grown-ups, we often need to remind ourselves to listen to the &quot;adult moderator&quot; in our brain telling us we don't really need that purse &mdash; even if it is super cute.</p> <h2>9. Money Can Help People</h2> <p>Whether it's donating a portion of their allowance to the church collection basket or contributing to a specific cause, kids learn from an early age that altruism feels good, and that if a lot of people chip in a little bit, great things can happen &mdash; towns hit by natural disasters can be rebuilt, cures for diseases can be researched, and other good causes can benefit from contributions, however small. It is their collective power that packs the punch &mdash; and can make a difference in one or many lives. And that feels good. (See also: <a href="http://www.wisebread.com/surprisingly-easy-ways-you-can-support-charity?ref=seealso">Surprisingly Easy Ways You Can Support a Charity</a>)</p> <h2>10. Free Is Fun!</h2> <p>Going to the ice cream shop on &quot;free cone day&quot; gives kids a thrill, even though, in most cases, ice cream is always &quot;free&quot; to them if Mom or Dad pays. Long line? No problem &mdash; the ice cream cone is free!!</p> <p>When the cosmetic rep offers you a free fragrance sample, why not take one? Free gift with purchase &hellip; free samples at the warehouse store? Sure! Last week I called Under Armour customer service to inquire about a replacement strap on a gym bag. When they offered to send one to me &mdash; for free! &mdash; I felt like it was gold.</p> <h2>11. Money Can Be Negotiated</h2> <p>In fact, financial negotiations can start at a young age for many kids. &quot;If I do more, can I earn more?&quot; &quot;When I turn 12, will you increase my allowance?&quot; Even requests for a special pair of soccer shorts can be turned into negotiation, wherein kids have to make a compelling argument to the parent whose reflexive response is &quot;no.&quot;</p> <p>In a recent CNN Money article debating the pros and cons of giving kids an allowance, Jayne Pearl, author of <a href="http://www.amazon.com/gp/product/1576600645/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1576600645&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=AXZMNXJ7T5I3LE2R">Kids and Money: Giving Them the Savvy to Succeed Financially</a> asserts the importance of an <a href="http://money.cnn.com/magazines/moneymag/money101/lesson12/index2.htm">allowance as a teaching tool</a>. &quot;Negotiation skills are an important part of that [learning], which they're going to need for dealing effectively with friends, teachers and, eventually, their bosses,&quot; she says.</p> <p>Those basic negotiation skills can help us get the best price on a car, house, a dining room set at an estate sale, and at other points of sale where bargaining is appropriate. They also come in handy when accepting a job offer, asking for a raise, or making joint financial decisions with our spouses.</p> <h2>12. Money Does Not Equal Worth</h2> <p>Most kids don't make a connection between success and money. Sure, most have seen enough TV to assume that a lot of famous athletes, singers, and actors are &quot;rich&quot; and therefore live in lavish houses and drive fancy cars. But their favorite teacher may be the lowest on the school's pay scale, and their best friend may live on the &quot;other side of the tracks.&quot; Most kids don't notice, care, or take stock of others' net worth.</p> <p>What a great reminder for us adults.</p> <p><em>Have your children taught you any lessons about money? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mardee-handler">Mardee Handler</a> of <a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-financially-educate-your-children">How to Financially Educate Your Children</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance children and money financial education money lessons Thu, 17 Jul 2014 13:00:03 +0000 Mardee Handler 1160247 at http://www.wisebread.com What Did Your Parents REALLY Teach You About Money? (It Might Surprise You) http://www.wisebread.com/what-did-your-parents-really-teach-you-about-money-it-might-surprise-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-did-your-parents-really-teach-you-about-money-it-might-surprise-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money-AA035997-small.jpg" alt="money" title="money" class="imagecache imagecache-250w" width="250" height="182" /></a> </div> </div> </div> <p>One of my most heady childhood memories is from the very first time I earned money from a &quot;job.&quot; I was about 11 years old, and my father's best friend needed a mother's helper to entertain her baby for a couple of hours. In exchange, she gave me a $5 bill. (See also: <a href="http://www.wisebread.com/wise-breads-first-job-stories?ref=seealso">Wise Bread Writer's First Jobs</a>)</p> <p>I walked on air all the way back to my house. I had earned my own money &mdash; and it felt great!</p> <p>I now realize that the excitement I felt at earning that five-spot stemmed from a very powerful belief about money that I have held since I was a small child: I believed that people should make their own way in the world. Having an opportunity to do so as a child made me feel grownup.</p> <p>This unconscious money belief &mdash; which financial planners and psychologists refer to as a &quot;money script&quot; &mdash; informs every aspect of my dealings with money. Mine has mostly been positive, except when I was the beneficiary of my father's life insurance policy, and I was extremely uncomfortable with the idea of inheriting money that I did not earn. My money script is a relatively common one, and for the most part it serves me well.</p> <p>Other money scripts can not only do a whammy on your psyche, but they can also lead to self-defeating and self-destructive behaviors.</p> <p>Here's what you need to know about childhood money scripts, and how they affect your financial decisions and your financial future.</p> <h2>Where Money Scripts Come From</h2> <p>Financial psychologists Bradley Klontz and Ted Klontz coined the term &quot;money script&quot; to describe our core beliefs about money. According to Klontz and Klontz, &quot;<a href="http://www.onefpa.org/journal/Pages/How%20Clients%E2%80%99%20Money%20Scripts%20Predict%20Their%20Financial%20Behaviors.aspx">money scripts are typically unconscious</a>, developed in childhood, passed down from generation to generation within families and cultures, contextually bound, and often only partial truths.&quot;</p> <p>Considering the fact that my grandmother came from a long line of subsistence farmers in Kentucky who were generally suspicious of both the government and rich folks, it's pretty easy to see where this money script originated. And according to Klontz and Klontz, this origin of the money script also explains why it is so difficult for me to change my attitude, even though I'm generations away from those poor Kentucky farmers:</p> <p style="margin-left: 40px;">When money scripts are developed in response to an emotionally charged, dramatic, or traumatic personal, family, or cultural financial flashpoint, such as significant losses during the Great Depression, parental abandonment, or financial bailouts by a family member, money scripts can become resistant to change, even when they are self-destructive.</p> <h2>4 Types of Money Scripts</h2> <p>Bradley Klontz and his research partner Sonya Britt have determined that money scripts fall into <a href="http://squaredawayblog.bc.edu/squared-away/what%E2%80%99s-your-%E2%80%98money-script%E2%80%99/">one of four categories</a>: Money Avoidance, Money Worship, Money Status, and Money Vigilance.</p> <h3>Money Avoidance</h3> <p>My money script is a form of money avoidance. Avoiders tend to believe that money is bad, rich people are greedy and unethical, and that they themselves do not deserve to have money. Individuals like myself who believe that they must make their own way in the world regard earned money as a source of virtue and unearned money as somehow immoral or wrong. In general, if you have a money avoidance script, you regard money as a source of anxiety, fear, or disgust.</p> <h3>Dealing With Avoidance</h3> <p>For me personally, it has helped to consistently remind myself that money is a tool &mdash; and therefore morally neutral in and of itself. It becomes a moral force only in how you use it. For that reason, I tried to use Dad's insurance money for things I thought he would approve of &mdash; like my sons' college funds, my retirement fund, and charity. I'm still struggling with my feelings about the money, but I recognize that my script reflects the struggles of previous generations, rather than my own life experiences.</p> <h3>Money Worship</h3> <p>If you have a money worship script, on the other hand, you believe that money leads to happiness and fulfillment. Money worshippers tend to believe that money will solve all of their problems, and that there will never be enough money. Money worshippers are vulnerable to workaholism and compulsive spending, since they are always chasing happiness in the form of wealth.</p> <h3>Dealing With Worship</h3> <p>The phrase &quot;money can't buy happiness&quot; was coined for money worshippers. If you have a worship script, you need to remind yourself that the really satisfying things in life have nothing to do with money. It's a difficult process, but it's important to make the choices that will increase your actual happiness, rather than those that will increase your financial &quot;happiness.&quot;</p> <h3>Money Status</h3> <p>An individual with a money status script believes that net worth is related to self-worth. These are the individuals who feel that they must show off their &quot;wealth&quot; at all costs, even if it means going into deep debt just to keep up appearances. Having a money status script will lead to attempts to impress others with the accoutrements of status, and often leads to falling for get-rich-quick schemes.</p> <h3>Dealing With Status</h3> <p>Individuals with status script must remember that no one is paying as much attention to them and their stuff as they are. This can be tough to remember, as individuals with status scripts will often hang out together. But thinking about what is really important to you &mdash; do you care more about earning enough money to have a new BMW each year, or would you rather scale back and spend more time with your family? &mdash; is a good way to work on turning off this script.</p> <h3>Money Vigilance</h3> <p>Finally, individuals with money vigilance scripts tend to have their finances in order, because these scripts state that saving money and being frugal are of utmost importance. However, money vigilance is not always good news for those who follow the script. Misers (think Ebenezer Scrooge) have strong money vigilance scripts, to the point where they deny themselves basic comforts for fear of spending any money unnecessarily.</p> <h3>Dealing With Vigilance</h3> <p>Generally, those with vigilance scripts are not sabotaging their own financial future. However, they may be hurting themselves and their relationships if they allow their vigilance to become miserly. As an individual with a vigilance script, I do know that it's unlikely your friends and family are silent about your frugality, but it might be wise to listen if their comments make it clear that your financial choices are hurting someone.</p> <h2>Overlapping Scripts</h2> <p>While many individuals will generally fall into only one category of money script, it is possible to have several overlapping scripts, even if they are conflicting money beliefs.</p> <p>For instance, in addition to my money avoidance script, I have a strong money vigilance tendency. This comes down to me on my mother's side, where my great-grandmother &mdash; who was quite wealthy &mdash; squirreled money away in purses and handbags, to the point that her family found over $3000 in cash among her handbags after she passed away in 1976.</p> <p>Avoidance and vigilance are two scripts that seem to correlate well together. Even if you are uncomfortable with owning money, it would still make sense to try to keep careful track of the money you have. But Bradley Klontz often sees two money scripts that seem to be <a href="http://www.dallasnews.com/business/personal-finance/headlines/20130531-how-your-money-script-can-affect-your-finances.ece">diametrically opposed</a>:</p> <p style="margin-left: 40px;">Sometimes we have a lot of correlation between people who are money avoidance and also are money worshippers. They may seem to be totally opposite approaches to money, but when you think about it more holistically, it does make sense. The people who are so adamantly against rich people &mdash; if you actually sit down with them, they actually would like to be rich.</p> <p>Not only would having these conflicting beliefs be emotionally taxing, but it could also lead to some seriously poor financial decisions. You might financially sabotage yourself in order to avoid becoming wealthy &mdash; while still compulsively spending what money you do have in the hopes that it will help you to feel happier.</p> <h2>Know Thyself</h2> <p>Without understanding the particular scripts that inform your money choices, you will never be able to pinpoint the beliefs that are holding you back from your goals. Take the time to think about your most deeply held money beliefs and figure out if they are helping or hurting your financial future.</p> <p><em>Which money script (or scripts) do you follow? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/what-did-your-parents-really-teach-you-about-money-it-might-surprise-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-time-value-of-money-matters-and-10-ways-it-affects-you">Why the Time Value of Money Matters, and 10 Ways It Affects You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen">Want Financial Education in Schools? Follow the Example of One Kansas Teen</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-financially-educate-your-children">How to Financially Educate Your Children</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance economic behavior financial education money habits money scripts Thu, 12 Jun 2014 21:00:56 +0000 Emily Guy Birken 1142510 at http://www.wisebread.com Slam Dunk Personal Finance Tips From the NBA http://www.wisebread.com/slam-dunk-personal-finance-tips-from-the-nba <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/slam-dunk-personal-finance-tips-from-the-nba" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sports-482103609.jpg" alt="basketball" title="basketball" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Are you a basketball junkie? Did you know that a lot of the steps that lead to success on the hardwood also lead to success with your money?</p> <p>Yep, it's true.</p> <p>In fact, here are five lessons you can learn from the court that apply to your finances. (See also: <a href="http://www.wisebread.com/11-ways-to-save-money-on-live-sporting-events?ref=seealso">How to Save Money on Live Sporting Events</a>)</p> <h2>1. Develop Your Offensive Game</h2> <p>In basketball, you can score a variety of ways &mdash; a dazzling dunk, a long three-pointer, or a skillful free throw &mdash; just to name a few. And no matter the method, scoring is necessary to win.</p> <p>In personal finance, offense deals with your ability to make money. And just as in basketball, you can do this in more than one way. This could be through a traditional nine to five job, building your own business, or even both &mdash; working a day job while having a side-hustle.</p> <p>Just as the great players work on all parts of the game, you should also develop multiple ways to make money. That's because the more sources of income you have, the less vulnerable you'll be if one of them dries up. So if you ever got fired from your day job, you don't need to worry quite as much about paying your bills as someone who never developed a side-hustle. (See also: <a href="http://www.wisebread.com/5-ways-to-make-extra-income-online-today?ref=seealso">5 Ways to Make Extra Income Online</a>)</p> <h2>2. Play Defense, Too</h2> <p>Offense may be glamorous and show up on the highlights, but ultimately, defense wins championships. In personal finance, defense deals with your ability to keep your cost of living down and spend less than you make. (See also: <a href="http://www.wisebread.com/how-to-spend-less-on-everything-in-2014?ref=seealso">How to Spend Less on Everything</a>)</p> <p>The concept is simple: If you keep your costs lower than your income, and make more than you spend, you win!</p> <p>In personal finance, debt and a high-consumption lifestyle are your opponents keeping you from winning it all. So get out of debt, stay out of debt, and control your costs.</p> <h2>3. Listen to Your Coach</h2> <p>One common trait among all of the great players is that they listened to their coaches. These people are students of the game who know how to win at the highest level. For instance, both Michael Jordan (six championships) and Kobe Bryant (five championships) both won with Phil Jackson as their leader. Coincidence?</p> <p>Similarly, in personal finance, there are people who know how to win with money. And they're more than willing to teach you how to do the same.</p> <p>Here are two of them:</p> <ul> <li>If you're in debt, Dave Ramsey is one of the best when it comes to motivating you to get out. Read his playbook: <a href="http://www.amazon.com/The-Total-Money-Makeover-Financial/dp/159555078X">&quot;The Total Money Makeover</a>&quot;<br /> &nbsp;</li> <li>If you want to automate your finances and build wealth effortlessly, Ramit Sethi can show you how. Read his playbook: <a href="http://www.amazon.com/gp/product/0761147489/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0761147489&amp;linkCode=as2&amp;tag=wisbre03-20">&quot;I Will Teach You To Be Rich</a>&quot;</li> </ul> <h2>4. Call Timeouts</h2> <p>In the game, timeouts are called when you're making mistakes or letting the opponent get the best of you. They're necessary to assess where you are, regroup, and make adjustments so that you win in the end.</p> <p>You should do the same thing with your personal finances. Maybe you've allowed your electricity bill rise little by little over the past four months. Or perhaps you've spent more than you wanted to with an impulse buy. (See also: <a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying?ref=seealso">Simple Ways to Stop Impulse Buys</a>)</p> <p>What would a financial timeout look like? Well, there are two things that you should come out of your timeout with: A spending plan, and a net worth statement.</p> <h3>Your Spending Plan</h3> <p>A spending plan is also known as a budget. It lets you know how much money you're bringing in and defines how much money you're willing to give up as expenses. It's a shorter-term view that leads into the next view. There are lots of tools available online to help you do this, but why not start with <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">building a budget in five minutes</a>?</p> <h3>Your Net Worth</h3> <p>A net worth statement tracks the value of everything you own overall, as well as everything you owe. It's a higher-level picture that'll show you how close you are to reaching your ultimate financial goal &mdash; for instance, becoming a millionaire.</p> <p>The calculation is simple: Total Assets - Total Liabilities = Net Worth. Here's a handy <a href="http://www.aarp.org/money/investing/net_worth_calculator/">net worth calculator</a> to help you figure it out.</p> <h2>5. Play for the Championship</h2> <p>Every season, teams play for one goal &mdash; the NBA championship. Individual stats don't matter. Records don't matter.</p> <p>Similarly, money is just a tool. Budgeting is just a means to an end. How much you make isn't the most important goal in life.</p> <p>This is where things get a bit philosophical.</p> <p>What's your end goal? What are you working toward?</p> <p>Just enough to be able to spend more quality time with your friends and family? Travel all around the world? Donate to a cause or charity that's close to your heart?</p> <p>Once you define your goal, you'll find it easier stay focused on what you need to do to get there.</p> <p><em>Has the NBA taught you anything about managing your money? Please share your slam-dunks in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/darren-wu">Darren Wu</a> of <a href="http://www.wisebread.com/slam-dunk-personal-finance-tips-from-the-nba">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance General Tips financial education money lessons nba Wed, 16 Apr 2014 08:36:23 +0000 Darren Wu 1135734 at http://www.wisebread.com 5 Personal Finance Lessons From “The Hobbit” http://www.wisebread.com/5-personal-finance-lessons-from-the-hobbit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-personal-finance-lessons-from-the-hobbit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/8272071683_ee390a2091_b.jpg" alt="Tolkien books" title="Tolkien books" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>It&#39;s hard not to be inspired by stories and characters in &quot;<a href="http://www.amazon.com/gp/product/0345534832/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0345534832&amp;linkCode=as2&amp;tag=wisbre03-20">The Hobbit&quot;</a> and <a href="http://www.amazon.com/gp/product/0345340426/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0345340426&amp;linkCode=as2&amp;tag=wisbre03-20">&quot;The Lord of the Rings</a>.&quot; The books and movies may contain fantastic realms and amazing creatures, but they are also grounded in reality, especially when it comes to Bilbo Baggins. Of all the characters in Middle Earth, he&#39;s the one most of us can relate to. He&#39;s flawed, charming, fearful, anxious, funny, and very human. And we can learn a lot from him and the world he inhabits. Here are five financial lessons we can take from &quot;The Hobbit.&quot; (See also: <a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation?ref=seealso">Personal Finance Lessons From &quot;Parks and Recreation&quot;</a>)</p> <h2>1. You Need The Right Tools to Get Out of Trouble</h2> <p>In Bilbo&#39;s case, trouble was a huge spider trying to literally suck the life out of both himself and the dwarves. He solved the problem with his sword, Sting, and of course the One Ring (to rule them all). But when it comes to finances, your trouble is more than likely some kind of debt. Whether it&#39;s credit card debt, massive car payments, mortgage trouble, or a loan, you need good tools slay that financial burden.</p> <p>Your best bet is to find a great budgeting tool. My personal favorite is <a href="http://www.youneedabudget.com/">You Need a Budget</a>. It is usually priced at $60, but check the <a href="http://store.steampowered.com/app/227320/">daily deal at Steam</a>, and it can sometimes be downloaded for less than $15. A software tool like this helps you with debt strategies, saving plans, and much more. With the right tools, you can defeat almost all of your financial troubles. (See also: <a href="http://www.wisebread.com/8-cool-mint-tools-for-manaing-your-money?ref=seealso">8 Mint Tools for Managing Your Money</a>)</p> <h2>2. Escaping Your Comfort Zone Can Bring Rewards</h2> <p>Bilbo did not exactly jump headfirst into his adventure with the dwarves. In fact, it was only the insistence of Gandalf that got him to leave his comfy home in the Shire. And although he has many life-threatening encounters, he also goes on some incredible journeys and finds great wealth and power with the One Ring.</p> <p>This same risk-reward outlook is true in the financial world, too. If you&#39;re investing money in a retirement plan like a 401k, and you won&#39;t be retiring for 30-40 years, you do not want to be in a safe, comfortable plan. Aggressive, riskier portfolio allocations weighted toward stocks will bring greater rewards over time. Yes, they can also bring greater losses, but you have plenty of time to ride those out. (See also: <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=seealso">Getting Started in the Stock Market With Index Funds</a>)</p> <h2>3. Gold Will Always Be Valuable</h2> <p>The dragon Smaug ransacked the town of Dale and captured Lonely Mountain for one reason &mdash; gold. Not just a little gold, but a massive mountain of gold. And after he captured it, he sat on it. Literally. During that time, the gold grew and grew in value. And the same is true in our world.</p> <p>Yes, the price of gold rises and falls, and currently it&#39;s a lot lower than it was in the summer of 2011 (<a href="http://www.infomine.com/investment/metal-prices/gold/5-year/">when it hit an all time high</a>). But gold is gold. It&#39;s a precious metal, and it&#39;s finite. The last estimate was around 171,300 tonnes, which is enough to fill 2.5 Olympic sized swimming pools. When anything that is both useful and desirable is finite, it will always be valuable. So, the next time you see one of those ads offering &quot;cash for gold,&quot; don&#39;t take the first offer you get. Shop around, get appraisals, and always check the current price of gold. (See also: <a href="http://www.wisebread.com/how-to-sell-gold-without-getting-ripped-off?ref=seealso">Sell Gold Without Getting Ripped Off</a>)</p> <h2>4. Don&#39;t Live a Champagne Lifestyle on a Beer Budget</h2> <p>In the case of the Hobbit, that beer would probably be a nice pint of Barliman&#39;s Best, which is served at the famous Prancing Pony Inn. And it&#39;s Bilbo Baggins who would plump for a cheap mug of beer and a simple meal instead of anything fancy and beyond his means.</p> <p>However, Bilbo is in fact the richest Hobbit who ever inhabited the Shire. He owns the priceless One Ring, and a precious Mithril Shirt (which he later gives to Frodo). The two items make him quite the wealthy Hobbit, but instead of giving them up for riches, he chooses to live a humble life. We can all learn from this. Don&#39;t spend a raise as soon as you get it. Don&#39;t throw debt onto credit cards, and only pay the minimum. Don&#39;t live way beyond your means. Start by paying yourself back, every payday, with 10%&ndash;20% going into savings. (See also: <a href="http://www.wisebread.com/being-frugal-without-giving-up-your-social-life?ref=seealso">How to Be Frugal Without Giving Up Your Social Life</a>)</p> <h2>5. Greed Will Ultimately Be Your Undoing</h2> <p>A Stoorish Hobbit called Smeagol became the twisted and deformed Gollum, all because of his greed and obsession for the One Ring. Smaug, the powerful dragon, horded his stolen gold and was eventually killed over it. The Sackville-Bagginses, cousins to Bilbo, were consumed with greed. They were obnoxious, condescending, and hated by almost everyone.</p> <p>Greed will not serve you well. It is one thing to save and be good with money. It is quite another to go out of your way to be a Scrooge-like character, spreading misery and sucking cheer from every room you enter. You will get far more from life if share your good fortune with family and friends. And that may not just mean money, either. Simply sharing meals, inviting friends over for coffee, or simply giving your old clothes and unwanted belongings to charity can bring you so much joy in return. Be a giver and do not go down the path of Smaug and Smeagol.</p> <p><em>Any personal finance lessons from The Hobbit that I&#39;ve missed? Don&#39;t be greedy &mdash; please share them in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/5-personal-finance-lessons-from-the-hobbit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education money lessons smaug the hobbit Thu, 30 Jan 2014 10:48:09 +0000 Paul Michael 1120431 at http://www.wisebread.com 8 Personal Finance Lessons From "Parks and Recreation" http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-personal-finance-lessons-from-parks-and-recreation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/park-144877674.jpg" alt="park sign" title="park sign" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>The NBC show &quot;Parks and Recreation&quot; is dense with commentary on the dysfunction and gridlock of government. But the show also has much to offer for those seeking lessons in how to manage money. (See also: <a href="http://www.wisebread.com/7-financial-lessons-from-breaking-bad?ref=seealso">Financial Lessons From &quot;Breaking Bad&quot;</a>)</p> <p>From Ron Swanson&#39;s fascination with breakfast to Tom Haverford&#39;s high-end clothing rental business, characters in the show are usually involved in some shenanigans that &mdash; usually unintentionally &mdash; offer a small lesson in personal finance.</p> <p>Here are eight lessons from the show.</p> <h2>1. Protect Your Identity</h2> <p>The gruff but sensible Ron Swanson is notably untrusting of anyone who dares to request so much as his birthday. His maniacal devotion to privacy is a bit over the top, but it&#39;s no more crazy than sharing every detail about yourself without concern for the consequences. This is especially true when it comes to things like social security numbers and numbers tied to bank accounts and credit cards.</p> <p>Identity theft is a real problem, impacting 16.6 million people in 2012, and causing $24.7 billion in financial losses, according to the Bureau of Justice Statistics.</p> <p>Be careful about distributing any financial information unless you trust the person (or persons) receiving it. Use passwords that are hard to guess, and change them frequently. You don&#39;t have to live off the grid like Ron, but you should be smart. (See also: <a href="http://www.wisebread.com/how-to-choose-a-better-password?ref=seealso">How to Pick a Better Password</a>)</p> <h2>2. Invest in Gold</h2> <p>Ron Swanson once noted that his entire life savings is comprised of gold bullion buried in various locations around Pawnee. We must first acknowledge that Ron probably has lost a lot of money in the investment in the last year. But long term, gold has proven to be a solid investment worthy of inclusion in most portfolios. Most experts say it&#39;s a nice hedge against inflation. Shares of the SPDR Gold Trust, a popular vehicle that allows individuals to easily invest in gold, have risen 8% in the last five years, and did not crash along with the market in 2008.</p> <h2>3. Write a Will</h2> <p>In a recent episode, accountant Ben Wyatt and Ron Swanson argued over the importance of estate planning. Ron&#39;s wish was that all of his considerable assets be left to &quot;the man or animal who has killed me.&quot; Ben convinced him that it&#39;s better to write a formal will ensuring the money be left to his wife and stepchildren. Ron agrees to follow Ben&#39;s advice after learning that without proper planning, the government could take a big cut of his money from inheritance taxes.</p> <p>Writing a will can ensure that your assets will be passed on to those you care about most, and you can also outline other desires including guardians for your children. And it&#39;s best to complete this planning while you&#39;re young and of sound mind. (See also: <a href="http://www.wisebread.com/six-great-tech-tools-for-planning-your-own-death-0?ref=seealso">Tech Tools for Planning Your Own Death</a>)</p> <h2>4. Make Stuff</h2> <p>Yes, Ron Swanson again. We&#39;d be remiss if we did not point out his skill in being able to craft things by hand. He&#39;s made everything from baby cribs to canoes to engagement rings on his own, likely saving considerable money in the process. This philosophy works for everything from cooking to landscaping to doing your own car and home repairs, too. (And, FYI, Nick Offerman, the actor who plays Ron Swanson, is an accomplished woodworker in real life. <a href="http://offermanwoodshop.com/">Offerman&#39;s woodshop</a> is nothing short of awesome.) (See also: <a href="http://www.wisebread.com/10-home-diy-projects-you-can-do-in-one-day?ref=seealso">Home DIY Projects You Can Do in a Day</a>)</p> <h2>5. You Can Always Afford Love</h2> <p>The lovable buffoon Andy Dwyer found himself dismayed when he realized that impressing new girlfriend April Ludgate would be hard without some cash. &quot;I kinda forgot that you need money when you have a girlfriend,&quot; he said. &quot;I want to treat April like a queen. And queens deserve&hellip; flowers and massages. Chocolate. Booze. Diamonds, rubies, emeralds. Some treasure chest full of scarves.&quot;</p> <p>But as we learn, April loves Andy regardless of whether he can afford to buy her things, and they don&#39;t seem to mind being blissfully broke. (See also: <a href="http://www.wisebread.com/18-frugal-and-romantic-dates-at-home?ref=seealso">Frugal and Romantic Dates at Home</a>)</p> <h2>6. Borrow Instead of Buy</h2> <p>Tom Haverford is the resident entrepreneur, launching everything from an entertainment business to a line of cologne. But his most successful venture was born when he realized that parents were not keen on spending lots of money on designer clothes for kids who would quickly outgrow them. So he started &quot;Rent-A-Swag,&quot; which allowed kids to borrow fashionable clothes and likely save their parents some money. (See also: <a href="http://www.wisebread.com/the-best-10-items-to-borrow?ref=seealso">Best Items to Borrow</a>)</p> <p>&quot;Rent-A-Swag&quot; may not exist in real life, but the concept can be applied to nearly any product that you&#39;ll either outgrow or won&#39;t use more than once or twice. Consider getting a Netflix subscription instead of buying DVDs. Think about going halfsies on that hedge trimmer with a neighbor.</p> <h2>7. Basic Is Best</h2> <p>When energetic city manager Chris Traeger entered into a hamburger cooking contest with Ron Swanson, he cooked up an elaborate sandwich made with tofu, tarragon, and papaya chutney on a brioche bun. It lost out to Ron&#39;s &quot;meat, on a bun, with nothing.&quot;</p> <p>When Chris went to order a top-of-the-line crib for his new baby, he learned that it was recalled due to safety concerns. (He ended up accepting Ron&#39;s handmade model.)</p> <p>Ron Swanson said there are only three proper haircuts for men: high and tight, buzz cut, and crew cut. It&#39;s no coincidence that those hairstyles probably cost about $10 at your neighborhood barber.</p> <p>Stick with what&#39;s simple and familiar, and you&#39;ll rarely be disappointed. And you&#39;ll probably save money in the long run.</p> <h2>8. Enjoy Breakfast</h2> <p>In &quot;Parks and Recreation,&quot; characters have a slightly neurotic love of breakfast. During one meal, the waffle-loving Leslie Knope asks &quot;Why would anyone ever eat anything other than breakfast foods?&quot; Ron Swanson also says &quot;I&#39;m a simple man. I like pretty dark-haired women and breakfast foods.&quot;</p> <p>It&#39;s commonly said that breakfast is supposed to be the most important meal of the day. But it&#39;s also arguably the most financially sensible meal. Breakfast foods are generally cheap and easy to prepare, and if you eat a good breakfast you&#39;ll probably be less likely to spend money on bigger meals later in the day. Not to mention, it can be fun and economical to have <a href="http://www.wisebread.com/25-breakfast-for-dinner-meals">breakfast for dinner</a>. As Ron says, &quot;I&#39;ll take a breakfast buffet anytime, anyplace.&quot;</p> <p><em>Any lessons from Parks and Recreation that we&#39;ve missed? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-women-learn-in-their-20s">8 Personal Finance Lessons Women Learn in Their 20s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you">9 Financial Lessons People Learn in High School — Did You?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/slam-dunk-personal-finance-tips-from-the-nba">Slam Dunk Personal Finance Tips From the NBA</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education money lessons tv Mon, 20 Jan 2014 10:48:12 +0000 Tim Lemke 1111901 at http://www.wisebread.com Money Mistakes Two Popular Board Games Teach Kids http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/money-mistakes-two-popular-board-games-teach-kids" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3236314938_e805725013_z.jpg" alt="Monopoly" title="Monopoly" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>As a father who writes about personal finance for a living, I do everything I can to teach my daughter about money. She has an allowance, a college fund, and a savings account, all of which we discuss the ins and outs of. (See also: <a href="http://www.wisebread.com/6-great-teachable-money-moments-to-share-with-your-kids">Teachable Money Lessons to Share With Your Kids</a>)</p> <p>To make her financial education more fun, we play board games such as <a href="http://www.amazon.com/gp/product/B00000IWD7/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B00000IWD7&amp;linkCode=as2&amp;tag=wisbre03-20" target="_blank">Monopoly</a> and the <a href="http://www.amazon.com/gp/product/B00000IWD7/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B00000IWD7&amp;linkCode=as2&amp;tag=wisbre03-20" target="_blank">Game of Life</a> at home. She&rsquo;s 9 years old &mdash; an age that seems to be more interested than any other in board games. That&rsquo;s great, but the games aren&rsquo;t turning out to be as full of financial literacy as I had hoped.</p> <p>In fact, they have enough real-life errors in them that I&rsquo;m amazed anyone says that board games are a good way to teach children about money. The games may help children learn to count money, but otherwise they&rsquo;re not doing a great job of teaching money skills. (See also: <a href="http://www.wisebread.com/play-on-5-great-card-and-board-games">5 Great Card and Board Games</a>)</p> <p>I talked to a few game experts and board game designers, who admitted that there really aren&rsquo;t any top-notch board games to teach kids about money. They help children look into the real world of their parents &mdash; paying bills and going to work, for example &mdash; but they&rsquo;re meant to be fun first and educational second.</p> <p>&quot;Honestly, there&rsquo;s nothing out there that&rsquo;s really great,&quot; says Eric Tyson, author of &quot;Personal Finance for Dummies&quot; and other &quot;Dummies&quot; books.</p> <p>Here&rsquo;s a breakdown of two of the most popular board games that conventional wisdom says should be teaching kids about money, and some money mistakes they make.</p> <h2>Monopoly</h2> <p>Just as an allowance can mimic many money matters that adults face every day, the game of Monopoly and others can get kids to think about the best way to manage their money and plan whether they should spend or save, Tyson says.</p> <p>Monopoly is good at teaching how to save money and invest in properties, he says, but gives a cynical view of the economy &mdash; vanquish your competitor. Who hasn&rsquo;t spent entire days playing this game, only to be exhausted from the constant deal-making?</p> <p>&quot;There&rsquo;s some potential value,&quot; Tyson says. &quot;Although it&rsquo;s simplified in such a way that it really doesn&rsquo;t represent the real world.&quot;</p> <p><strong>Luck, Not Skills, Gets You Where You&rsquo;re Going</strong></p> <p>Using dice to advance is common in board games, but kids should understand that the luck of the roll is meant for gambling, not real-life decisions. In most board games, where you land is based on luck, not your skill at choosing where you want to go.</p> <p>Monopoly, however, uses luck better than other games, giving players the chance to buy property on most turns, says Phil Orbanes, founder of Winning Moves Games, a game maker in Boston.</p> <p>&quot;When you make a choice in real life, it pretty much determines what your next choice is going to be,&quot; says Orbanes, who was in charge of research and development at Parker Brothers for 12 years.</p> <p>A better way to move on a board game would be to <em>pay </em>to determine how far you move forward, he says. That would be better than the luck of rolling the dice, and players would have to pay to get better options. Unfortunately, in Monopoly, you don&rsquo;t have much of a choice when you land on a space &mdash; it&rsquo;s usually a decision whether to buy or not.</p> <p><strong>Quantity Is Better Than Quality</strong></p> <p>Winning Monopoly players often are better off owning many properties, no matter how low-rent they are, than owning a few high-priced properties such as Boardwalk and Park Place, Orbanes says. Owning more properties prevents other players from owning an entire color and building on it, and gives the player more negotiating power &mdash; which can be good skills to have in real life. (See also: <a href="http://www.wisebread.com/how-to-negotiate-with-confidence-and-strike-the-best-deal">How to Negotiate With Confidence</a>)</p> <p>Boardwalk and Park Place aren&rsquo;t worth buying in the game because the two spots have low odds of someone landing there. Those two high-priced properties are also after the &quot;Go to Jail&quot; spot, meaning players will go back to jail more often than they&rsquo;ll pass those two spots.</p> <p>In real life, if you owned such high quality properties, you&rsquo;d likely have a better neighborhood that would be more valuable overall and would provide a better return on investment.</p> <p><strong>Bid Like Every Property Is in Foreclosure</strong></p> <p>Monopoly also has a little-known rule that not many people follow: the ability to bid on a property at any starting price if a player lands on it and chooses not to buy it.</p> <p>Such bidding might happen in real life if every unsold property was in foreclosure, but that&rsquo;s not how real life works. If that happened in real life, everyone would want to be a real estate investor.</p> <h2>The Game of Life</h2> <p>This is new favorite at my house. From what I&rsquo;ve learned from Amazon <a href="http://www.amazon.com/gp/product/B00000IWD7/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B00000IWD7&amp;linkCode=as2&amp;tag=wisbre03-20" target="_blank">reviews</a>, however, the new version that we have is inferior to the older edition. There are complaints about how the new version isn&rsquo;t as sturdy as the old one, but as someone who didn&rsquo;t play this as a kid but is now learning about it, I have other complaints.</p> <p><strong>There&#39;s No Middle Class</strong></p> <p>Salaries range from $20,000 for a salesperson on the &quot;Career&quot; path to $100,000 for a doctor in the &quot;College Career&quot; path. There&rsquo;s not much of a middle class in the Game of Life.</p> <p>The original Game of Life had a middle class that could be achieved in many different ways that mirrored the 1960s when the game first came out, Orbanes says. But today&rsquo;s version is realistic in that it&rsquo;s more difficult to enter the middle class with assembly line jobs vanishing, he says.</p> <p><strong>Having Kids Makes You Rich</strong></p> <p>If you choose the &quot;Family Path&quot; and increase your chances of having children, you&rsquo;ll get some cash for having children that may not amount to much in terms of the value of a dollar in the game, but in real life it would make it profitable to have children.</p> <p>For example, having a child in the game requires each player to give you $5,000. However, having twins doesn&rsquo;t double the gift amount &mdash; you get the same $5,000 from each player. That&rsquo;s a good amount of money in real life, and it gets better in the game.</p> <p>When you retire, you collect a $10,000 retirement from each of your children by collecting the money from the bank.</p> <p>There are costs in the Game of Life to having children &mdash; such as $5,000 per child to take them on vacation to a theme park &mdash; but the costs are few and not nearly as much as the <a href="http://www.wisebread.com/what-it-costs-to-raise-a-child">$295,560</a> it takes the average middle-class family to raise a child through age 17 in the real world. (See also: <a href="http://www.wisebread.com/what-it-costs-to-raise-a-child">How Much Does It Cost to Raise a Child?</a>)</p> <p><strong>College Skills Negated With Job Loss</strong></p> <p>It&rsquo;s also interesting that when you lose a job that required going to college, you must choose a lesser paying job from the &quot;Career&quot; deck. The college degree you paid for earlier is no longer valid, essentially meaning that the skills you learned will no longer help you land another job requiring a college career.</p> <p>In an economy where workers must learn new job skills after being laid off if they want to find new jobs, this lesson from the game is partly true. But I also think it&rsquo;s true that many skills can be transferred to other jobs, and that a college degree is valuable to employers &mdash; even if it&rsquo;s outside of your chosen field.</p> <p>In the Game of Life, after losing a job that required a college degree, your base salary is now likely going to be closer to $30,000 (mechanic, hair dresser) than the $50,000 a computer designer or $90,000 a lawyer earns in the game.</p> <p><strong>High Interest Loans</strong></p> <p>The game&rsquo;s interest rate on a bank loan is 25%, whether it&rsquo;s for college or a home. That level of math can be too complex for an adult to figure out, so I can see why 25% makes sense.</p> <p>But with real-world loan rates at historic lows, this is a lesson that isn&rsquo;t close to reality. Sometimes borrowing really is a good idea.</p> <h2>Realistic vs Fun</h2> <p>The problem with making board games too realistic is that they&rsquo;ll be too complicated for children to play, and both children and adults won&rsquo;t have fun playing them.</p> <p>&quot;All commercial games on the market are not realistic,&quot; Orbanes says. And who would want it that way? Who wants to play a game testing your money skills that bores you with the reality of paying bills and going to work?</p> <p>While they&rsquo;re meant to be an escape from reality, there&rsquo;s the opportunity to at least teach children some financial skills that they can learn throughout their lives. As Orbanes puts it, they can offer a &quot;simplistic distillation of the basics of what finance is.&quot;</p> <p>That&rsquo;s a good goal. But it&rsquo;s hard to learn it when you&rsquo;re hoping for a good roll of the dice.</p> <p><em>What money mistakes have you discovered in your favorite board games? Have you found a game that does a good job teaching personal finance skills?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-play-teaches-you-about-personal-finance">5 Things Play Teaches You About Personal Finance</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-best-sites-to-help-your-kids-learn-about-money">8 Best Sites to Help Your Kids Learn About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">5 Stupid Things My Parents Taught Me About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education games money lessons Thu, 07 Nov 2013 09:48:04 +0000 Aaron Crowe 1067941 at http://www.wisebread.com 5 Stupid Things My Parents Taught Me About Money http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-stupid-things-my-parents-taught-me-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/teen-4454795-small.jpg" alt="teen and mom" title="teen and mom" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>I don&#39;t want to offend anyone, so I&#39;ll start by saying this: My family has pretty good financial habits, and I was lucky to have learned a lot of them. They work hard, they avoid debt, they save up for things and, as a general rule, they stay out of financial trouble.</p> <p>That said, I think my parents got a few things wrong. (Sorry, Mom.) Here are five stupid things my parents taught me about money. (See also: <a href="http://www.wisebread.com/7-important-lessons-frugal-parents-teach-their-children">7 Lessons That Frugal Parents Teach Their Kids</a>)</p> <h2>&quot;Money Doesn&#39;t Grow on Trees&quot;</h2> <p>&quot;Money doesn&#39;t grow on trees&quot; is a cliche thought up by some cleverly annoying person somewhere to denote the idea that cash isn&#39;t that easy to come by. And it isn&#39;t. Working eight hours a day to earn it is hard. Making it last is hard. And saving it can be really hard, especially when you aren&#39;t making a whole lot of it (or maybe even if you are). It also suggests that once your money&#39;s gone, it&#39;s gone, and you have to go through the whole laborious process of bringing it in again.</p> <p>Even so, I think this phrase gets it wrong. Does that mean I think money actually does grow on trees? Why, yes. Yes it does. Those trees are stocks and bonds. Pick the right ones, and money will grow and grow. Maybe in a messed up, sideways, meandering sort of way sometimes, but it does grow. (See also: <a href="http://www.wisebread.com/investing-advice-by-the-decade-ages-11-20">Investment Advice for Ages 11 to 20</a>)</p> <h2>&quot;A Fool and His Money Are Soon Parted&quot;</h2> <p>This is another phrase I heard a lot as a kid &mdash; as in, possibly every time any money came into my possession. I get it. Blowing through your money at warp speed is generally bad news. It suggests lack of planning, thought, and self control. And those are really important skills. But it also made me feel like spending my money &mdash; <em>at all, ever</em> &mdash; was a bad thing. (See also: <a href="http://www.wisebread.com/buying-shiny-new-things-without-the-guilt">Buying New Things Without the Guilt</a>)</p> <p>Fortunately for me, it takes a lot more than that to keep a teenaged girl from the mall. That message was, however, enough to create guilt every time I pulled out my wallet. And that&#39;s the part that&#39;s stupid, because guilt and money are not a good match. Money should be empowering. You should save it because you want to and spend it for the same reason: because you know it&#39;s the right move for your life. Because you know that it&#39;ll get you ahead (or get you what you want right now). And because you want to drive your financial destiny, not be a victim to it. Spending money foolishly is foolish, but spending can also be productive, joyful, strategic, indulgent, and, yes, <em>smart</em>.</p> <h2>&quot;Don&#39;t Talk About It&quot;</h2> <p>If you ask anyone in my family what they earn, what they owe or how much they&#39;ve saved, you may as well ask them for a detailed account of how their sex life is going. In my family, you don&#39;t talk about your finances. According to my parents that just isn&#39;t anyone&#39;s business (including mine). It&#39;s really that personal.</p> <p>Sorry, but that&#39;s stupid.</p> <p>I don&#39;t print my net worth on my business cards, but I&#39;m not that embarrassed discussing money with a friend or family member. In fact, I think that avoiding talk about our finances is a big reason we often get into so much trouble. We struggle to keep up with our friends&#39; lifestyles; little do we know how many of them are deep in debt and struggling to stay afloat. We can&#39;t bear to divulge how much we earn, and then grasp at straws trying to figure out how much we should be getting paid for our work. We can&#39;t bear to admit we&#39;ve made financial mistakes, and so we allow our friends and family to make the very same ones.</p> <p>I was taught not to talk about money. Instead, I ended up writing about it. And, because I&#39;ve been open about what I&#39;ve done right and what I&#39;ve gotten wrong, other people have been open with me. As a result, I think I&#39;ve learned a lot more than if I&#39;d kept my mouth shut.</p> <h2>&quot;There Is Nothing Worse Than Debt&quot;</h2> <p>Kids are tiny, super-sensitive detectors of any and all inequity, which in my case meant spotting the things other people had that my family didn&#39;t. My parents had a ready response: Not everyone owns all the cool stuff they have. That seemed like splitting hairs to me at the time. After all, if you had something awesome and could use it whenever you wanted, what did it matter? What was clear was that having a bunch of stuff you didn&#39;t actually own was bad. Really bad. Period.</p> <p>I&#39;m not into debt. I didn&#39;t even have credit card until after I graduated from university. But debt isn&#39;t the root of all evil. In the right situation, leverage can be a good thing. The key is to understand the difference between the kind of debt that leaves you with a lot of junk and big bills and the kind that can act as a financial springboard. That might mean using debt for a house, for more education, or even to start a business. Even more productive kinds of debt have to be used very, very judiciously. But in the right situation, it can be a great tool. That&#39;s a lesson I definitely never got.</p> <h2>&quot;Insurance Is Essential&quot;</h2> <p>I don&#39;t think my parents ever taught me about insurance, but that doesn&#39;t mean I didn&#39;t learn a few things &mdash; namely that insurance was important because you just never knew what kind of perils could befall you. It was protection. It was peace of mind. And even now, my mom&#39;s pretty appalled at how little insurance I have. (See also: <a href="http://www.wisebread.com/how-much-life-insurance-do-i-need">How Much Life Insurance Do I Need?</a>)</p> <p>In many cases, though, insurance is a really stupid way to spend money. Insurance companies are experts. They&#39;re willing and ready to take your money and essentially make a bet that they won&#39;t have to deliver nearly as much in return. It&#39;s how they stay in business. That isn&#39;t to say that insurance companies are doing anything wrong, or even that insurance is bad. But it&#39;s only a reasonable expense if the risk you&#39;re insuring is big enough to warrant paying for each and every month. Life insurance? If you have dependents, you need it; cashing in is (hopefully) a long shot, but the risk of not having it is too big to even imagine. Insurance on most other things? Run the numbers and see for yourself. In most cases, you&#39;re paying hundreds every year to insure a remote and relatively inexpensive risk. Now that just doesn&#39;t add up.</p> <h2>What Are Your Kids Learning?</h2> <p>My parents didn&#39;t sit me down and teach me a lot of specific lessons about money, but I still learned a lot from the way they lived (and paid for) their lives. As a general rule, I hope to teach my kids some of the same things my parents taught me &mdash; and some things they didn&#39;t. I guess I should also leave some room for discussions and arguments at the dinner table. After all, I&#39;m bound to get a few things wrong. Right, mom?</p> <p><em>What stupid things about money did your parents teach you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-from-parks-and-recreation">8 Personal Finance Lessons From &quot;Parks and Recreation&quot;</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-lessons-everyone-should-learn-by-kindergarten">5 Financial Lessons Everyone Should Learn by Kindergarten</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-know-these-5-financial-lessons-most-people-learn-in-their-40s">Do You Know These 5 Financial Lessons Most People Learn in Their 40s?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-mistakes-two-popular-board-games-teach-kids">Money Mistakes Two Popular Board Games Teach Kids</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-lessons-people-learn-in-high-school-did-you">9 Financial Lessons People Learn in High School — Did You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education money lessons Mon, 04 Nov 2013 10:36:03 +0000 Tara Struyk 1062402 at http://www.wisebread.com Investing Advice by the Decade: Ages 11-20 http://www.wisebread.com/investing-advice-by-the-decade-ages-11-20 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/investing-advice-by-the-decade-ages-11-20" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/teen-5226442-small.jpg" alt="teen and mom" title="teen and mom" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Just as they do in their first decade of life, kids go through a ton of changes in their second decade. For boys, their deepening voices leave them thankfully less vulnerable to being confused for their mothers when they answer the phone! But more to the point for a financial blog post, kids undergo some very significant money-related changes between ages 11 and 20 as well.</p> <h2>New Concepts</h2> <p>Those who have studied what financial concepts compute in a kids&#39; mind say the second decade of life is when they can more fully understand some of the most important investing ideas. Some kids can grasp these ideas even earlier. (See also: <a href="http://www.wisebread.com/investment-allocation-by-age-birth-to-10-years-old">Investment Allocation by Age: Birth to 10 Years Old</a>)</p> <p>According to the National Endowment for Financial Education&#39;s (NEFE) brochure, <a href="http://www.smartaboutmoney.org/Portals/0/ResourceCenter/RaisingaMoneySmartChild.pdf">Simple Steps to Raising a Money-Smart Child</a>, between ages 11 and 13 they can understand what Einstein meant when he supposedly described compound interest as the eighth wonder of the world. Between ages 14 and 18, they can learn what stocks and bonds are all about, and they can appreciate the value of diversification.</p> <p><strong>Introducing Mutual Funds</strong></p> <p>That last point opens the door to discussions about mutual funds. While kids younger than 10 are much more likely to understand stocks than mutual funds, once they start moving through their second decade of life, mutual funds may make sense.</p> <p>As a teaching aid, just pull up a description of a mutual fund using the website of a broker like Charles Schwab. Take a look at <a href="http://www.schwab.com/public/schwab/investing/investment_help/investment_research/mutual_fund_research/mutual_funds.html?&amp;&amp;path=%2FProspect%2FResearch%2Fmutualfunds%2Fsummary.asp%3Fsymbol%3DSWPPX">Schwab&#39;s S&amp;P 500 Index Fund</a>, for example. By clicking on the &quot;Portfolio&quot; tab, you can show your child what companies the fund invests in. She will recognize some of the top 10 holdings, such as Apple and Google. For as little as $100, she can diversify her investment across 500 leading companies whose stocks trade on the U.S. stock markets. That&#39;s pretty amazing. (See also: <a href="http://www.wisebread.com/10-tips-from-a-financially-savvy-teen">Tips From a Financially Savvy Teen</a>)</p> <p>Investing in an index fund is a fine way to mirror the market&#39;s return and can serve as a springboard for learning all sorts of foundational lessons about investing, like <a href="http://en.wikipedia.org/wiki/S%26P_500">what the S&amp;P 500 is</a>, the <a href="http://www.investmentsillustrated.com/pages/print/">historical returns of stocks</a> vs. other asset classes, what is and what are the benefits of <a href="http://www.soundmindinvesting.com/visitor/2011/june/level3.htm">dollar cost averaging</a>, the dangers of trying to <a href="http://www.investopedia.com/articles/stocks/08/passive-active-investing.asp">time the market</a>, and more. &nbsp;</p> <h2>First Jobs and Investing</h2> <p>As kids move through their second decade of life, their allowance often increases, and so do their opportunities to earn money outside the home. The Department of Labor&#39;s <a href="http://www.youthrules.dol.gov/index.htm">Youth Rules website</a> explains what labor laws say about how many hours kids can work at various ages and what sorts of jobs they can hold.</p> <p>Hopefully in the first decade of their lives you&#39;ve instilled in your kids the habit of setting aside a portion of all the money they receive for savings. Now that they have more money coming in, they have the potential to sock away a lot more, and it makes all the more sense to get them involved in investing. (See also: <a href="http://www.wisebread.com/5-things-your-teen-needs-or-doesn-t-need-in-a-bank-account">5 Things Your Teen Needs in a Back Account</a>)</p> <p><strong>Custodial Investment Accounts</strong></p> <p>Even when their kids are still in the first decade of life, I encourage parents to open a custodial investment account for them (you need to be 18 or older to have an investment account in your own name). In the second decade of life, when a kid is likely to begin earning money, it&#39;s time to open a custodial IRA account, preferably a custodial Roth IRA. In order to qualify to make contributions to an IRA, you have to have earned income. You can open such an account at <a href="http://www.schwab.com/public/schwab/investing/accounts_products/accounts/ira/custodial_ira">Charles Schwab</a> with as little as $100.</p> <p>One chief advantage to having your kids invest through an IRA is the tax benefit. If they did really well investing through a regular custodial account, they may bump up against the painful reality that they&#39;d have to pay tax on their earnings.</p> <p>OK, they&#39;d have to have a <em>lot </em>of money in the account for a kid since tax would be due only if investment income exceeded $1,000, and it would take an account balance of over $14,000 to generate that much interest income, assuming a 7% return, but still.</p> <p>With money invested through a Roth IRA, if your kid doesn&#39;t touch the account until age 59 and a half, there would be no tax due on the earnings. But kids don&#39;t have to wait such an unimaginable amount of time before they can access the money. Contributions may be withdrawn at any time for any reason without penalty. And even the earnings may be withdrawn without tax or penalty under certain circumstances.</p> <h2>Investing and College Financial Aid</h2> <p>Anyone who attempts to understand the rules and regs related to college financial aid should be forewarned that such attempts may cause confusion and will cause drowsiness. (See also: <a href="http://www.wisebread.com/5-reasons-why-every-student-should-fill-out-the-fafsa">5 Reasons Why Every Student Should Fill Out the FAFSA</a>)</p> <p><strong>Regular Savings Reduces College Financial Aid</strong></p> <p>The financial aid formulas count a portion of an incoming student&#39;s savings and income <em>against </em>his or her family. So, a kid who heads to college not having worked a single day of his life, or not having saved any of the money he <em>did </em>earn, will qualify for more financial aid than one who has worked, saved, and invested.</p> <p>Knowing this, some families may be tempted to have their kids not work because of the possible impact on financial aid. But the many benefits of work &mdash; diligence, responsibility, new skill development &mdash; will likely outweigh any of the drawbacks.</p> <p>There is one last point about the financial aid formula that should be pointed out. Money in a retirement account does <em>not </em>count against the family. All the more reason to move from a custodial investment account to a custodial IRA when your kids start <em>earning </em>money.</p> <p>The downside here is that if the money is taken out of the IRA to pay for school, it will be considered student income in the financial aid calculations. One way around that is to use such funds for the student&rsquo;s senior year. The FAFSA form impacts the next year&rsquo;s financial aid package. By using a student&rsquo;s Roth IRA money for his senior year&rsquo;s expenses, there won&rsquo;t be a financial aid package next year to worry about.</p> <p>Teaching your kids about investing is a great investment unto itself. A kid who enters adulthood knowing how and why to invest will be a very unusual kid &mdash; unusually well-positioned for success, that is.</p> <p><em>Have you introduced important financial concepts to teens? What worked?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/investing-advice-by-the-decade-ages-11-20">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-over-these-5-scary-things-about-investing">How to Get Over These 5 Scary Things About Investing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-investors-with-better-returns-than-warren-buffett">5 Investors With Better Returns Than Warren Buffett</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-brain-hacks-for-better-investment-decisions">4 Brain Hacks for Better Investment Decisions</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers">Should You Trust Your Money With These 4 Popular Financial Robo-Advisers?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment financial education investing money and kids Thu, 10 Oct 2013 09:48:03 +0000 Matt Bell 1005000 at http://www.wisebread.com Why the Time Value of Money Matters, and 10 Ways It Affects You http://www.wisebread.com/why-the-time-value-of-money-matters-and-10-ways-it-affects-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-the-time-value-of-money-matters-and-10-ways-it-affects-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash-2285818-small.jpg" alt="cash and hourglass" title="cash and hourglass" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Learning some basic finance doesn't have to immediately make your eyes glaze over. There's one concept in particular, the time value of money (TVM), which is a fundamental principle in everything from investing to purchasing that becomes more interesting and easier to understand once you drop all the boring finance jargon. So to meet the challenge, here are a few brief descriptions, followed by 10 unexpected (and hopefully more entertaining) examples of the TVM. (See also: <a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">Places Teens (and Adults) Can Learn About Money</a>)</p> <h2>First Things First: What Exactly Is the TVM?</h2> <p>The time value of money means a dollar today is worth more than a dollar in the future because it can immediately generate interest. In finance world, if I get $1 today, I can immediately invest it to earn more money (finance world assumes there is always some safe place to earn interest). If I waited to get my $1 until a year from now, I would have missed out on a whole year's worth of earning interest. (See also: <a href="http://www.wisebread.com/the-psychology-of-money-how-a-t-shirt-equals-a-taco">How a T-Shirt Equals a Taco</a>)</p> <p>This also means money in hand today is a sure thing. It eliminates other risks, like default risk, which is when you are promised money in the future, and someone doesn't pay up &mdash; such as that friend you lent money to and who still hasn't paid you back.</p> <p>And let's not forget opportunity costs. These are essentially choices you give up to do something else. When you decide to wait one year to get your $1, the opportunity cost is the year's worth of lost interest that you gave up to wait for your $1.</p> <p>So, now that you are a financial whiz with these descriptions, here are ten ways to understand the TVM without the usual finance drudgery.</p> <h2>1. Picking Your Lottery Payout</h2> <p>When I win my Powerball $500 million jackpot, I intend to pick the immediate cash payout option instead of the 30 years of future annuity payments. Using the TVM, even though I will initially receive less than $500 million by doing this, I will still get a gigantic sum of cash upfront, which I can invest right away to make even more. I will also have immediate control of my money today, and I will avoid the risk that the lottery commission may not pay up for some reason down the road.</p> <h2>2. The Delicious Cupcakes in My Fridge</h2> <p>We are somewhat obsessed with cupcakes in our house, and rationing hasn't worked. It's clearly better to take your portion right away. Like the TVM, this is true for a couple of reasons. First, a cupcake today is worth more (in taste terms) than a cupcake tomorrow when it becomes stale and the frosting hardens. Also, waiting to get your share tomorrow risks that I will sneak into the fridge later tonight and eat your cupcakes, leaving you with nothing for tomorrow (cupcake default risk).</p> <h2>3. Designer Shoe Purchases</h2> <p>That awesome pair of designer shoes is finally on sale. You charge it to your credit card and celebrate all the way home. However, when you don't pay off your balance until six months later, those shoes really cost you more. That's the TVM at work. The six months of credit card interest charged by your credit card company for the &quot;loan&quot; they advanced you to buy the shoes gets tacked on. Pay off the balance right away, and you won't have to pay for the time value of money.</p> <h2>4. Professional Athlete Pay</h2> <p>Many professional athletes have pay packages that give them a promised amount over a set number of seasons. However, in some sports, if you get injured and miss games, you may forfeit future earnings. Like the TVM, if you can secure an upfront amount today (such as a signing bonus) instead of future payments in years to come, you are better off. Getting your money today eliminates future lost income from injuries (similar to default risk) and allows you to start investing your money for the future &mdash; assuming such athletes would do so.</p> <h2>5. Dinner or Shopping</h2> <p>This is an opportunity cost comparison that essentially turns into a TVM concept. You've saved up some extra cash, and since you're an awesome budgeter, you can either spend the money going out to dinner or choosing to buy a new shirt. The opportunity cost of choosing the shirt is the price and enjoyment of the dinner you give up. But, over time, that shirt can be worn again, thereby making this a better option for some. (See also: <a href="http://www.wisebread.com/12-cheap-first-date-ideas">12 Cheap First Date Ideas</a>)</p> <p>However, perhaps dinner out this week is a chance for a date with your dream guy or gal. In this case, the opportunity cost of dinner, which equates to the price of the forgone shirt and future wear, may be small compared to a lifetime of happiness with what could be your future husband or wife (as if it were that easy!).</p> <h2>6. Fine Wines</h2> <p>While I can safely say I am not a regular at fancy wine auctions, there are certain wines that improve with age, which may be worth a whole lot more in the future. According to<a href="http://www.wineeducation.com/invest.html"> WineEduction.com</a>, a 1961 Chateau Latour originally cost $3 when it was released and can now sell for $500 at auction. Much like the TVM and that $1 earning interest, such bottles are a similar example, even if I may never get to drink one.</p> <h2>7. Wimpy From Popeye</h2> <p>If you have never seen a classic <a href="http://popeye.com/history/">Popeye cartoon</a>, then break out your Google machine, because the character of Wimpy personifies the risk of a dollar promised tomorrow vs. getting a dollar today. Wimpy was in love with hamburgers, but never could pay for them. He always said, &quot;I'll gladly pay you Tuesday for a hamburger today.&quot; In other words, it was highly unlikely Wimpy was really going to pay on Tuesday or any other day for that matter. Thus, whoever gave Wimpy that burger should get his money in hand today because Wimpy was probably defaulting later.</p> <h2>8. Chore Procrastination</h2> <p>Here's an interesting way to equate the TVM into everyday chores. Nobody likes cleaning up, but you may be better off doing it today vs. putting it off until tomorrow. The mess will only grow if left untouched over time, and you will have to put more things away, scrub harder, and do a deeper clean later on. Channel your inner-finance self and realize it's like interest charges piling up. Today's mess grows over time, accumulating more dirt and junk, which becomes an even bigger mess down the road.</p> <h2>9. Exercise</h2> <p>You've heard that exercising and taking care of your body can make for a healthier future. Much like investing in a savings account today, which can yield interest and more savings for the future, investing in your body today through regular exercise can stave off injuries, prevent diseases, and yield future health benefits. If you wait to start getting into shape until you are much older, you forego the accumulated health benefits of exercise, just as you would forego any accumulated interest on your savings. (See also: <a href="http://www.wisebread.com/fitness-for-people-who-hate-exercise">Fitness For People Who Hate Exercise</a>)</p> <h2>10. Mowing the Lawn</h2> <p>Lawn services can be expensive, but perhaps you can feel less guilty with an opportunity cost comparison. It may take you one hour to mow your lawn, but a lawn service can do it for a fee of $20. If you are a freelancer and need to take an hour off from earning revenue to mow, then if you make more than $20 in an hour, it's worth having the lawn service do the dirty work.</p> <p>These not-so-mainstream TVM examples hopefully provide a more simplified way to think through this fundamental financial concept. Finance doesn't have to make you run for the hills if you can think of it in practical and more interesting terms.</p> <p><em>Can you think of any additional examples of the TVM at play in everyday life?</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhy-the-time-value-of-money-matters-and-10-ways-it-affects-you&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhy%2520the%2520Time%2520Value%2520of%2520Money%2520Matters%252C%2520and%252010%2520Ways%2520It%2520Affects%2520You.jpg&amp;description=Why%20the%20Time%20Value%20of%20Money%20Matters%2C%20and%2010%20Ways%20It%20Affects%20You"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Why%20the%20Time%20Value%20of%20Money%20Matters%2C%20and%2010%20Ways%20It%20Affects%20You.jpg" alt="Why the Time Value of Money Matters, and 10 Ways It Affects You" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kelly-medeiros">Kelly Medeiros</a> of <a href="http://www.wisebread.com/why-the-time-value-of-money-matters-and-10-ways-it-affects-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-math-basics-you-need-to-know">Financial Math Basics You Need to Know</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-lessons-women-learn-in-their-20s">8 Personal Finance Lessons Women Learn in Their 20s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-kids-can-teach-us-about-money">12 Ways Kids Can Teach Us About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-did-your-parents-really-teach-you-about-money-it-might-surprise-you">What Did Your Parents REALLY Teach You About Money? (It Might Surprise You)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education financial principles future value opportunity costs present value time value of money Fri, 06 Sep 2013 09:48:30 +0000 Kelly Medeiros 980987 at http://www.wisebread.com Essential Money Lessons for Recent Grads http://www.wisebread.com/essential-money-lessons-for-recent-grads <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/essential-money-lessons-for-recent-grads" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/college-2213475-small.jpg" alt="grad" title="grad" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>I've always thought it absurd that the U.S. doesn't require some sort of basic financial literacy course before students can graduate from high school. Sending unprepared young adults into the world of mortgages, credit, car loans, payday lenders, and student debt is a bit like sending lambs to the slaughter. For those just starting in the world of independent money management, there are few essential lessons that will help avert the worst disasters. (See also: <a target="_blank" href="http://www.wisebread.com/21-personal-finance-lessons-from-harry-potter">21 Personal Finance Lessons From Harry Potter</a>)</p> <p>The list below is by no means comprehensive, but it's a good roadmap for young people to begin their financial trek.</p> <h2>Learn, Learn, and Learn</h2> <p>Learning how to manage money, save, and invest isn't the dark art that most experts would have us believe. So much good information is available from reputable sources both online and offline. Learn good savings strategies from sites like this one or the basics of investing from <a target="_blank" href="http://www.wisebread.com/topic/personal-finance/investment">Wise Bread</a>, <a target="_blank" href="http://www.fool.com/">The Motley Fool</a>, or <a target="_blank" href="http://www.kiplinger.com/">Kiplinger</a>. Understand your risk tolerances, stay curious about how to maximize returns on your savings, and advocate for your own financial future.</p> <h2>Know Thyself</h2> <p>It's nearly impossible to understand our financial weaknesses and combat them without first knowing ourselves. What negative financial triggers do you have? Trouble budgeting? A bad shoe habit? A failure to hold on to cash when you have it? Realize your proclivities, and, if you can't change them, reorganize your life to lessen their effect.</p> <h2>Use Credit &mdash; Don't Be Used by It</h2> <p>Unfortunately, it's nearly impossible to function in modern life without using credit and having a healthy credit history. But there's a big difference between leveraging the power of credit tactically from time-to-time and <a target="_blank" href="http://www.wisebread.com/tips-for-playing-credit-card-roulette">falling prey to it permanently</a>. Use credit selectively to build your credit history or for free short-term loans (i.e., paying off your credit cards in full at the end of each billing cycle and not incurring one cent in interest charges). Never embrace the use of credit so liberally that the interest alone keeps you in a constant state of servitude.</p> <h2>Pay Attention</h2> <p>Money is a social construct &mdash; its power is driven by people and shaped by the events in our world. The closer you keep your ear to the ground, the better chance you'll have of hearing the faint rumblings of economic turbulence or financial opportunity.</p> <h2>Talk About Money</h2> <p>We live in an age of full disclosure; still, we seldom talk about money. It's this silence that keeps people from coming clean about their financial realities, learning, sharing advice, and strategizing together. Get over it. Remove the social taboo about money talk by being more open with trusted friends. You might be surprised how universal your struggles are and how valuable and motivating your successes can be to others.</p> <h2>Get Strategic</h2> <p>Most of us know we need to save, but we seldom really consider what we're saving for or what our specific goals are. As a young person, ask yourself, &quot;What do I want to accomplish financially by the time I'm 30? 40? What kind of retirement do I want to have and what should I be doing right now to make that more likely?&quot; <a target="_blank" href="http://www.wisebread.com/goal-setting-getting-out-of-debt-once-and-for-all">Write your goals down</a> and document each step of the strategies that will get you there &mdash; there's real power in documenting your plan and referring to it often as your financial life evolves.</p> <h2>Save With Gusto</h2> <p>Once you know your short-term and long-term plans, you're ready to save with abandon. Saving earlier usually means ending up with more later on. Young savers, even those who squirrel away quite modest sums take advantage of a longer time horizon and get a serious jump start on late-comers. Of course, saving more now involves living within your means and delaying gratification &mdash; a discipline that's hard won for young and old alike. Start by scaling back on two or three spending categories in your life (maybe clothing or travel) and redirect that money into an IRA or 401(k) plan.</p> <p>The world of money is constantly changing, but the essential rules of the game tend to stay the same. Understand where you want to end up and decide how you're going to get there (and remember, winning the lottery is a dream, not a strategy). Learn what you can as soon as you can and stay rigorously disciplined about saving and investing. Once you have a few successes under your belt, don't be afraid to talk about what you've learned and pass your knowledge on.</p> <p><em>How did you learn your most valuable financial lessons? Was it through careful training or messy trial and error? What's the most important piece of advice that you'd give those just starting out?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/essential-money-lessons-for-recent-grads">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen">Want Financial Education in Schools? Follow the Example of One Kansas Teen</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-time-value-of-money-matters-and-10-ways-it-affects-you">Why the Time Value of Money Matters, and 10 Ways It Affects You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-to-ask-on-a-college-tour">8 Questions to Ask on a College Tour</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial education financial literacy graduation Wed, 12 Jun 2013 10:36:35 +0000 Kentin Waits 978033 at http://www.wisebread.com