Chapter 2

Holiday Spending Spreadsheet

The joy of the holiday season can be overpowered with shopping stress and financial difficulties. To avoid this situation, consider this approach:

  1. In mid-to-late November, create a spreadsheet to manage your holiday spending. Categories might include gifts for family and friends, donations to charity, holiday meals along with other items such as shipping, wrapping paper, decorations, parties, and travel.
  2. Enter realistic amounts that you are able to spend for the various people on your gift list and for the other categories.
  3. Monitor your actual spending, attempting to stay within your budget.
  4. Based on this year’s experiences, adjust categories and amounts for the 2019 holiday season.

The spreadsheet might include columns for name/item, budgeted amount, actual amount, difference, and notes for future reference.  Starting earlier in the year, consider   setting aside holiday money to avoid taking away funds from your normal budget. You might also consider using credit card and other reward points for gifts.

For additional information on a holiday spending spreadsheet, click here.

Teaching Suggestions

  • Have students create a spreadsheet that might be used to monitor holiday spending.
  • Have students talk to others to obtain ideas for not overspending during the holiday season.

Discussion Questions 

  1. How would you make use of a spreadsheet for holiday spending?
  2. Describe actions that might be taken to monitor and control holiday spending.
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Receipt Savings Trick

It’s possible to add $500 or $1,000 to your savings with a simple action. Clark.com suggests using store receipts to save for the future. Many retailers display a “You Saved” amount on a receipt for items on sale and store discounts. By putting this amount in a savings account you can avoid spending the “saved” money on other items.

Collecting receipts in an envelope or box, or scanning them to an app, can also help analyze buying habits to make wiser purchases in the future and not make as many trips to the store. This action can result in an extra amount each month added to your savings. This money can be added to your emergency fund or retirement account.

For additional information on the receipt savings trick, click here.

Teaching Suggestions

  • Have students locate examples of receipts that show “amount saved.”
  • Have students talk to others to obtain ideas for methods for building a person’s savings account.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of using this system?
  2. Describe other actions that might be taken to motivate you and others to build your savings?
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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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Romance Scams

What are some signs that a romance scam could be taking place?

  • a new love living far away requests money or use of your credit card number
  • being asked to sign a document giving a new romantic interest control of your finances
  • a new sweetheart wants you to open a joint bank account with them

While romance scammers usually focus on single, older people, anyone seeking a new relationship is a possible target. These scams can happen in person, but more often through social media, dating websites, smartphone apps. These scams happen when a new love pretends to be interested in you as a way to get your money. In fact, they may not even be who they say they are.

Beware of Cupid’s arrow striking your wallet instead of your heart!  To protect you, friends, and family from romance and other scams, consider these actions:

  • Avoid giving a new friend access to credit cards, bank accounts, or other financial assets.
  • Report crimes or financial exploitation to local law enforcement agencies or to Adult Protective Services (APS); information available at gov.
  • Contact your state attorney general and the Federal Trade Commission to report cases of financial abuse.

For additional information on romance scams, click here.

Teaching Suggestions

  • Have students create and present possible scam situations to create awareness among various potential victims.
  • Have students create a visual presentation (using computer software or a poster) to communicate actions to avoid scams.

Discussion Questions 

  1. What are common warning signs that may indicate that a possible scam is taking place?
  2. Describe actions that might be taken to avoid various scams and frauds.
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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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8 Simple Ways to Save Money

“Sometimes the hardest thing about saving money is just getting started.”

This Bank of America article provides a step-by-step guide for simple ways to save money–money that can then be used to pursue your financial goals.  To learn more, check out the 8 steps below.

  1. Record your expenses. Ideally, you can account for every penny you spend for the big items like mortgages, credit cards, and even small items like a coffee and snacks.
  2. Make a budget. Once you know how you spend, you can compare your income to your expenses and make changes, if necessary.
  3. Plan on saving money. Your budget should contain a savings category.  Ideally, savings should account for 10 to 15 percent of your income.
  4. Choose something to save for. One of the best ways to save money is to set a goal.  Possible goals include saving for a vacation, the down payment for a house, retirement, or anything important to you.
  5. Decide on your priorities.  Prioritizing goals can give you a clear idea of what is most important and helps to remind you why you are saving money.
  6. Pick the right tools. There are many saving options and the choice often depends on the amount of time before you need the money.  Often, money for short-term goals is placed in savings accounts.  Money for long-term goals may involve stocks, bonds, or mutual funds.
  7. Make saving automatic. Banks offer automated transfers between checking and savings accounts.  Automated transfers are great because you don’t have to make a decision to save or invest; it just happens.
  8. Watch your savings grow. Checking your progress every month helps you stick to your personal savings plan.

For more information, click here.

Teaching Suggestions

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

  • Discuss the relationship between income, expenses, and establishing a systematic savings program.
  • Help students understand how saving small amounts over time can help obtain goals that can change their lives.

Discussion Questions

  1. At the end of the month, many people wonder where their money went!  Why is it important to determine how you spend your money?
  2. How can a budget help you find the money needed to establish a savings program built on the goals you want to achieve?
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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.
Categories: Chapter 1, Chapter 2, Economy, Financial Planning, Investments, Retirement Planning, Stocks | Tags: , , , | Leave a comment

Teaching Money Skills to Children

Youngsters learn money management attitudes and behaviors by watching family members and others. To help guide their financial literacy development, involve children in the shopping process using these steps:

  1. Have children help in the creation of the shopping list. Sit down together with paper or an app to list what you need. Talk through your list with your kids noting items that are low on in the household as well as things bought regularly. Have children check cabinets and refrigerator to determine things they use.
  2. While making your list, talk about a budget. Explain the need to keep track of how much is spent on groceries so there is enough money for household expenses. Make clear that a grocery list helps make sure you don’t overspend.
  3. Talk while shopping to explain brands you prefer and how sale prices or coupons might affect purchases. Also communicate why you choose certain stores for your shopping.  As you select items explain why you’re buying that one instead of a similar item.  Older children can be asked to comparison shop among different brands.
  4. While shopping, refer back to your budget. This will help you decide to buy an item now or wait until a later time.
  5. Provide explanations of buying choices. To avoid surprises, estimate your total before going to the cash register. Also explain different payment methods, such as a debit card, which subtracts money from your bank account right away.

Discussion of various decision-making elements will help kids learn shopping and money management skills they will need.  Thinking out loud can clarify what you’re doing and why when in the store, paying bills, or shopping online.

For additional information on teaching money skills to children, go to:

Grocery Shopping Tips

Money skills, by age.

Teaching Suggestions

  • Have students visit stores and explain to friends why they buy certain items and brands.
  • Have students create a visual presentation (using computer software or a poster) to communicate learning experiences for teaching wise buying to others.

 Discussion Questions 

  1. What experiences did you have growing up that helped you learn financial literacy and wise money management skills?
  2. Describe other methods that might be used to teach shopping and money management skills to young people and others who might lack these abilities.

 

Categories: Chapter 2, Chapter 6, Purchasing Strategies, Wise Shopping | Tags: , , | Leave a comment

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