Chapter 1

Smart Financial Planning Actions

While every person and every generation has something to learn, we all also have ideas and information that can benefit others.  Those skillful in asking questions have an advantage for planning and implementing financial activities.  Asking questions usually results in useful knowledge before taking action and being less intimidated about unknown topics.

Other actions with strong benefits for better money decisions include:

  1. Joining groups through social media and online communities resulting in connections and information to support financial concerns and decisions.
  2. Not being overly confident, but researching a topic carefully before making a financial decision to take action.
  3. Maintaining a minimal competitive nature; instead identify actions and investments that best meet your financial goals.
  4. Manage spending and saving with the use of debit cards, instead of credit cards, and automating your savings with online deposits or an app.

For additional information on successful financial planning actions, click here.

Teaching Suggestions

  • Have students survey friends to determine which of the actions in this article are commonly used.
  • Have students create role playing situations or a video to communicate the benefits of the actions discussed in this article.

 Discussion Questions 

  1. What do you believe are the benefits and drawbacks of these suggested actions?
  2. Describe other actions that might be taken for successful financial planning.
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Millennial Money Habits

According to a recent study, the financial activities of today’s young adults (ages 23-37) include the following:

  • One in four millennials are concerned about not having enough money saved.
  • Over 70 percent of these young people believe their generation overspends, and 64 percent believe that their generation is bad at managing money.
  • Over 60 percent of millennials are saving, and 67 percent are consistent in working toward a savings goal.

These money attitudes and behaviors are reported in the fifth edition of our Better Money Habits Millennial Report, with these additional findings:

  • A reported 73 of millennials who have a budget, stay within their budget every month or most months.
  • Nearly half (47 percent) of millennials have $15,000 or more in savings.
  • While 16 percent millennials have $100,000 or more in savings.

Millennial parents are sensitive to child-raising costs. While older generations report that finances weren’t a main factor in the decision to have children, millennial parents believe the opposite. While many are paying off their own student loans, nearly a quarter of older millennials are saving for their children’s education.

For additional information on money habits of millennials, click here.

Teaching Suggestions

  • Have students talk to friends to obtain information about their budgeting and saving habits.
  • Have students locate and report on an app that would help guide their spending and saving activities.

Discussion Questions 

  1. What attitudes and behaviors did you learn when you were young that influence your spending and saving habits today?
  2. Based on these research results, what money management suggestions would you offer to others?
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Lifestyle Inflation

Quite often, when a person receives a raise or promotion with an increased salary, overspending is the result. In those situations, financial experts recommend maintaining frugal spending patterns. This path will allow a person to avoid becoming a victim of “lifestyle inflation.”  Many households earning hundreds of thousands of dollars have trouble avoiding debt and saving for the future.   To prevent this situation, the following actions are recommended:

  • Maintain your lifestyle and spending habits as you receive raises. Instead of a bigger house or new car, the increased income can be used to stabilize your financial situation and increase saving for future needs.
  • Keep your average daily spending low.To avoid lifestyle creep, simply keep your typical day spending at a frugal level.
  • Increase your automatic savings amounts. Consider saving an amount from each paycheck equal to the amount of your raise.  This will allow you to put aside money for major financial goals and long-term financial security.
  • Keep housing costs low. Instead of upgrading, maintain and improve your current home. Housing is a major cause of lifestyle creep when a more expensive home results in higher property taxes, maintenance costs, insurance, association fees and other expenses.
  • Remember and review often your financial goals.Do not take your focus off long-term money goals.  Short-term desires and impulsive spending can easily undermine your financial future. Create a way to remind yourself of those goals each day.

For additional information on lifestyle inflation, go to:

Article #1

Article #2

Teaching Suggestions

  • Have students ask another person of what actions might be taken when a salary increase is received.
  • Have students create a video contrasting wise and unwise actions when receiving a salary increase.

 Discussion Questions 

  1. What factors influence “lifestyle inflation” in our society?
  2. In addition to the suggestions in the article, what actions might be taken to avoid lifestyle creep?
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Becoming Financially Disciplined

Whether you start at the beginning of the year or you start today, some actions to keep your financial plans on track include:

  • Set a money objective. Simplify your approach for financial goals by selecting a word or short phrase to give your direction. This theme might be “future needs” (for retirement planning), “spend mindfully” (for controlling spending), or “kid’s college.”
  • Use automation. Using automatic transfers will allow you to save for a house down payment, an emergency fund, a vacation, or retirement.
  • Challenge yourself. Cut unnecessary expenses to allow you to have money left over each month for financial goals.
  • Change your environment. Modifying your financial habits can occur with visible reminders, such as photos, sticky notes, or note cards placed on your credit card, desk, bathroom mirror, refrigerator, car dashboard, or computer screen. Also consider keeping a financial diary or journal.
  • Obtain needed support. Instead of going it alone, work with a friend, roommate, spouse, or group to achieve your money objective and stay accountable.

 For additional information on becoming financially disciplined, click on the following links:

Financially disciplined #1

Financially disciplined #2

Teaching Suggestions

  • Have students talk to others to obtain ideas for achieving financial goals.
  • Have students create visuals that might be used to remind them about financial goals and actions.

 Discussion Questions 

  1. What are the main reasons people who not achieve financial goals?
  2. Describe methods that might be used to help you and others achieve financial goals.
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How to Profit from the Ultra-Tight Job Market Right Now

“The war for talent that obsesses tech companies is intensifying and is about to spread economywide.”

This Fortune article is a must read for job seekers in today’s world, Geoff Colvin explains that after nine years of sluggish economic growth, the economy has turned the corner and creating jobs at a record pace.  The hiring boom is not only creating opportunities for unemployed workers, but also currently-employed workers who want to get a better or higher-paying jobs.

In the current job market, employers are seeking talented employees that have a great future.  Traits that include creativity, the willingness to work hard, and love of learning often help employers evaluate potential.  Digital skills are very important, but not restricted to just tech companies.  For example, many retailers are hiring workers who can use digital skills to reach customers in new ways.

Human skills are also more important than in the past.  Companies want workers to feel they’re part of the organization and a valued asset.  These “same people” skills are very important for workers applying for management positions.

For more information, click here.

Teaching Suggestions

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

  • Reinforce that employers want workers who have the knowledge and skills that they need, but also are willing to work hard, become part of the organization, and keep learning once they get the job.

Discussion Questions

  1. How do you develop the traits and skills so that employers are willing to pay you a salary?
  2. If you were an employer, how would you choose between job applicants applying for a customer service position at American Airlines? What traits and skills are most important?
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Personal Financial Satisfaction

The Personal Financial Satisfaction Index (PFSi), reported by the AICPA (American Institute of Certified Public Accountants) is at an all-time high.  This quarterly economic indicator measures the financial situation of average Americans.  PFSI is the difference between (1) the Personal Financial Pleasure Index, measuring the growth of assets and opportunities, and (2) the Personal Financial Pain Index, which is based on lost assets and opportunities. The most recent report had a Pleasure Index 68.1 in contrast to a Pain Index of 42.1, resulting in a positive reading of 25.9, the highest since 1994.

While the stock market is high, unemployment is declining, and inflation is low, remember the economy is cyclical.  Be sure to consider and plan for your long-term goals. Stay aware and position your financial plan appropriately to safeguard finances when the economy is in a downturn.  Also, analyze your cash flow to an attempt to increase savings, including an appropriate emergency fund.

For additional information on financial satisfaction, click here.

Teaching Suggestions

  • Have students create an action plan for situations that might be encountered in times of economic difficulty.
  • Have students create a team presentation with suggestions to take when faced with economic difficulties.

 Discussion Questions 

  1. What are examples of opportunities that create increased personal financial satisfaction?
  2. Describe actions a person might take when faced with economic difficulties.
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Hurricane Financial Toolkit

Natural disasters create a need for unique actions.  After physical safety is assured, some of the activities related to finances include:

  • contacting your insurance company – request a copy of your policy, take photos and videos to document your claim.
  • registering for assistance at DisasterAssistance.gov or call 1-800-621-3362.
  • talking with your mortgage lender and credit card companies since you may not be able to make upcoming payments on time.
  • contacting utility companies to suspend service if you will not be living in your home due to damage.

Beware of various scams that surface after natural disasters.  These frauds can include phony repairs, deceptive contractors, requiring up-front fees, fake charities, and misrepresenting oneself as an insurance company agent or government representative to obtain personal information.

Assistance for the personal and financial chaos created by a hurricane or other natural disaster may be obtained from these organizations:

For additional information on financial actions for disasters, click here.

Teaching Suggestions

  • Have students role play situations that might require actions such as those described in this article.
  • Have students create a video with suggestions to take when encountering a natural disaster.

Discussion Questions 

  1. How might the advice offered in this article be communicated to people who are victims of a natural disaster?
  2. Describe common mistakes people might make when encountering a natural disaster.
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Financial Plan – Silent Killers

CPAs and financial advisers point out five “silent killers” that create barriers for the successful implementation of estate, retirement, and investment plans.  These common mistakes are:

1. Unrealistic Expectations. A valid financial plan must be based on practical assumptions, such as an appropriate forecast of rate of return, inflation, and future cash flow needs
2. Emotional Decision Making. Feelings and personal sentiment must be identified and minimized when setting goals and planning financial projections.
3. Inflexibility. A useful financial plan must take into account unexpected events. Creation of an emergency fund and contingency plan is vital.
4. Inaction. Without a plan for action, the perfect financial plan is worthless. Common results of inaction can be not having appropriate of property and casualty insurance coverage, financial hardship of dependents due to inadequate life and disability coverage, failing to address how assets are to be distributed in an estate plan, and overlooking a tax strategy.
5. Unclear Values and Priorities. Being on the wrong path will result in an undesired financial destination. Reflection of areas of importance and priorities is fundamental for implementing a financial plan and achieving financial goals.

For additional information on financial planning silent killers, click here.

Teaching Suggestions

  • Have students talk with others about barriers they have encountered in their financial decision making.
  • Have students create situations that reflect each of the five situations. Ask them to suggest actions to overcome these difficulties.

Discussion Questions 

  1. Explain which of these financial planning barriers you believe is the most dangerous.
  2. What are possible actions a person might take to avoid these financial planning barriers?
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Innovation for Improved Financial Health

Mobile start-up companies and other organizations are working with financial institutions to assist consumers with apps and websites that address various financial tasks and concerns.  These include:

  • Albert (www.meetalbert.com) is a mobile app to guide your financial decisions with the assistance of various financial institutions.
  • EARN (www.earn.org) is a national nonprofit to help low-income families create a habit of saving and break the cycle of financial instability.
  • eCreditHero (www.getcredithero.com) is designed to fix errors that appear on an estimated 80 percent of the credit reports of Americans.
  • Scratch (www.scratch.fi) helps borrowers to better understand, manage, and repay loans.
  • WiseBanyan (www.wisebanyan.com) is a free financial advisor that suggests and manages investment plans for various financial goals, such as savings for retirement, creating an emergency fund, and buying a home.

For additional information on innovative financial planning apps, click here.

Teaching Suggestions

  • Have students search for a website or app that would be of value of improved personal financial planning.
  • Have students talk to others about the financial concerns they face. Ask students to propose an app or website that would address a personal finance concern.

Discussion Questions 

  1. What personal financial planning areas provide people with the most difficulty?
  2. Describe potential apps or websites that might be created to assist people with their personal financial planning activities?
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Financial Literacy Survey

Based on an online survey of personal finance knowledge, 40 percent of Americans earn a grade of C or worse. Financially literate people possess a fundamental understanding of money management activities, and are able to apply them for their financial well being.

The Wallet Literacy survey is available to assess your financial literacy. This test covers a wide range of topics, including credit scores, paycheck deductions, emergency funds, car insurance, home buying, inflation, and investment risk. Respondents are encouraged to use a calculator and other resources when taking the survey.

For additional information on the financial literacy survey, click here.

Teaching Suggestions

  • Have students take the financial literacy survey to determine the areas where additional learning is needed.
  • Have students encourage others to take the survey, and then have students talk with them about their results.

Discussion Questions 

  1. What items on the survey are topic areas for which most people need additional learning?
  2. How might people be encouraged to learning more about various personal finance topics?
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