Chapters

Quiz: What’s Your Financial SPF Factor?

Posted on July 4, 2015 by Melissa Hart

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

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

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

For more information, click here.

Teaching Suggestions

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

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

Discussion Questions

  1. How can financial planning help you obtain your goals and objectives?
  2. Why should you begin investing sooner rather than later?
  3. A common problem for some people is they don’t have the money they need to begin an investment program. Given your current circumstances, what steps can you take to “find” the money to start an investment program?
Categories: Chapter 1, Chapter 2, Chapter_11, Financial Planning, Investments, Opportunity Costs, Time Value of Money | Tags: , , | Leave a comment

The New Grad’s Guide to Student Loan Debt

Posted on July 1, 2015 by Melissa Hart

“Finishing college is surely cause to celebrate—but it is also time for some hard realities to hit.” 

This article provides information about what happens after graduation and you have to start paying back student loans.  Specific information includes:

  1. When you will start making payments
  2. How much you will pay and which repayment option to consider
  3. How to make your payments
  4. What happens if you want to change your repayment plan
  5. The importance of making a budget that includes your loan payments.

Note:  There are also links to a “very informative” video and additional articles at the bottom of this article that provide even more information about student loans and what happens if you don’t make payments.  Definitely worth a click.

For more information, click here.

Teaching Suggestions

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

  • Help students understand that student loans are one way to finance their education, but loans should not be considered free money that doesn’t have to be repaid.
  • Illustrate what can happen if student loans are not paid back.

Discussion Questions

  1. Many students obtain student loans to help pay for their college education. Are there other options that can be used to pay for college?
  2. Assuming that you decide a student loan is the best way to obtain the money you need to pay for college, what steps can you take to understand the conditions of the loan agreement that you will sign in order to obtain the loan money?
  3. What happens when someone finishes college, but doesn’t make the student loan payments that are required?
Categories: Debt, Opportunity Costs, _Appendix A | Tags: , | Leave a comment

Defrauding Investors

Posted on June 27, 2015 by Melissa Hart

On May 28, 2015, the Securities and Exchange Commission announced fraud charges against William Quigley.  He is accused of creating a scheme to steal from investors and from a brokerage firm where he worked as the director of compliance.

The SEC’s Enforcement Division alleges that was involved in a scheme to solicit investors to buy stock in well-known companies or supposed start-ups on the verge of going public.  The SEC alleges that:

  • The securities were never purchased for the investors.
  • Quigley wired the money out of the country or he withdrew it from ATM’s near his home.
  • he had accomplices, two brothers who live in the Philippines.

For more information, click here.

Teaching Suggestions

  • Have students prepare a position paper on how to protect themselves from investment fraud.
  • Have students go to the Securities and Exchange Commission website (sec.gov) to learn how SEC protects investors and maintains fair, orderly and efficient markets.

Discussion Questions

  1. How can federal, state, and local governmental agencies protect investors from investment fraud?
  2. What punishment should be meted out to investment fraudsters?
Categories: Chapter_11, Frauds and Scams, Investments | Tags: , | Leave a comment

Reduced Money Worries

Posted on June 24, 2015 by Melissa Hart

To minimize money worries and achieve greater financial freedom, five steps are recommended:

1.  Budget – create a simple money plan to track income, expenses, and savings. Closely monitor small daily expenses, which can quickly add up to large amounts.

2. Reduce – avoid buying unnecessary and unfulfilling items that pile up and collect dust. Make a conscious choice to reduce your consumption and unneeded spending.

3. Recognize – avoid debt to purchase things that you believe will impress others.

4. Educate – learn as much as you can about wise money management and personal financial planning.

5.  Get started – take action today to spend less, save, and learn more about wise money choices. Your habits will not change overnight, but a small step toward financial security can occur immediately. Consistent action will make a difference.

For additional information on reducing money worries, click here.

Teaching Suggestions

  • Have students create a list of common causes of money worries.
  • Have students prepare a drama with suggested actions for reduced money worries.

Discussion Questions 

  1. What are common actions that can help reduce money worries?
  2. Why do people consistently behave in a manner that creates money worries?
Categories: Chapter 1, Chapter 2, Financial Planning, Wise Shopping | Tags: , | Leave a comment

New Crisis Possible, But, Not Like 2008: Geithner

Posted on June 20, 2015 by Melissa Hart

“Even with the challenges in the U.S. economy, America is a ‘lucky country.’ ”

During a CNBC interview, former Treasury Secretary Tim Geithner said the market reforms after 2008 put “much more capital into the system” and “much tougher rules on risk-taking.”  He went on to say that the reforms are strong enough, if they’re not eroded, to buy this country a relatively long period of financial stability.

Although the American economy is doing relatively well and making steady progress at the present time,     a financial crisis will happen again at some point.  Still the structural reforms undertaken after 2008 can serve to mitigate any future damage.  Mr. Geithner concludes that if a financial crisis does happen in the future, the Federal Reserve and the government would need to act again.

For more information, click here.

Teaching Suggestions

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

  • Discuss how the economy affects the lives of the average U.S. citizen.
  • Point out specific steps the government took to stabilize the economy and the financial markets during the economic crisis that began in 2008.

Discussion Questions

  1. How does a healthy economy affect you and your family? How does a weak economy affect you and your family?
  2. At a time when many people believe the government is too involved in the lives of individuals and business, should the government take steps to stabilize the economy and financial markets during an economic downturn? Explain your answer.
Categories: Chapter 1, Chapter_11, Financial Planning | Tags: , , | Leave a comment

Personal Finance Stress Test

Posted on June 17, 2015 by Melissa Hart

To avoid financial disaster, several measurements are available for assessing a person’s personal financial stress:

  1.  The Debt-to-Income Ratio is obtained by dividing your debts by pretax earnings.  Generally this number should be less than 28 percent, without your mortgage, or 36 percent, including your mortgage payment.
  2.  Discretionary Expenses involve spending for items other than fixed obligations and variable nondiscretionary items, such as food and utilities. Purely discretionary expenses may involve recreation and vacations.  An analysis of these categories will allow you to delay, reduce, or eliminate various expenses to avoid financial difficulties.
  3. Emergency Savings should be able to cover three to nine months of living expenses. These funds should be readily available in savings or other easily liquidated accounts. Greater financial greater obligations will require a larger emergency fund.
  1. Additional Income involving wages or tips from a part-time job or selling personal possessions can provide a cushion in times of financial difficulty.
  1. Total Assets, both liquid and non-liquid, will reduce your vulnerability to financial turmoil.

For additional information on the personal finance stress test, click here.

Teaching Suggestions

  • Have students calculate one or more of these measurements for their life situation.
  • Have students prepare a short creative video with a summary of these measurements.

Discussion Questions 

  1. Why is liquidity important for reduced financial stress?
  2. What actions would you recommend to for a person to reduce their personal financial stress?
Categories: Chapter 1, Chapter 3, Financial Planning, Savings | Tags: , , | Leave a comment

Basics of Investing in Mutual Funds

Posted on June 13, 2015 by Melissa Hart

“. . . Learn how to invest in mutual funds with these informative tips.”

This Money/CNN article provides the following 10 statements along with a brief explanation of each statement to help beginning investors learn about fund investing.

  1. What exactly is a mutual fund?
  2. Mutual funds make it easy to diversify.
  3. There are many kinds of stock funds.
  4. Bond funds come in many different flavors too.
  5. Returns aren’t everything – also consider the risk taken to achieve those returns.
  6. Low expenses are crucial.
  7. Taxes take a big bite out of performance.
  8. Don’t chase winners.
  9. Index funds should be a core component of your portfolio.
  10. Don’t be too quick to dump a fund.

For more information, click here. 

Teaching Suggestions

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

  • Provide an introduction to the “basics” of mutual fund investing.
  • Point out that this is just one article in the Money/CNN series. By clicking on the next button at the bottom of this article, students can access more articles and obtain more in-depth information about fund investing.

Discussion Questions

  1. Based on the information in this article, why do you think investors choose mutual funds?
  2. The article mentions that there are both stock and bond funds. What is the difference between these two types of funds?  Which type of funds do you think could help you achieve your financial goals?
  3. Why are taxes and expenses important when you choose a mutual fund?
Categories: Chapter_13, Investments, Mutual Funds | Tags: , | Leave a comment

Saver Survey

Posted on June 10, 2015 by Melissa Hart

Each year, America Saves (www.americasaves.org) conducts a survey or its program participants to determine the attitudes and behaviors of savers.  The most recent study reports that:

  • People save mainly for their emergency fund, retirement, or repaying debt.
  • People in formal savings programs, such as America Saves, report saving larger amounts.
  • Married respondents saved much more than single respondents.
  • Females and males have different saving purposes; females favored saving for an emergency fund, males favored retirement saving.
  • Savers involved in America Saves are saving more, are more confident in their ability to manage their money, and are managing their debt better while feeling more optimistic about their financial situation.

The complete Savers Survey report is available here.

Teaching Suggestions

  • Have students talk to others about their savings habits and goals.
  • Have students prepare a graph to monitor their savings activities.

Discussion Questions 

  1. What actions can help encourage a person to have more effective savings habits?
  2. Why does being involved in an organized savings program result in more savings and better money management activities?
Categories: Chapter 1, Chapter 4, Financial Planning, Savings | Tags: , | Leave a comment

New Health Discovery? The Doctor Oz Effect

Posted on June 6, 2015 by Melissa Hart

In 2015, Lindsey Duncan and the companies he controlled have agreed to settle Federal Trade Commission charges that they deceptively touted the supposed weight-loss benefits of green coffee bean extract through a campaign that included appearances on The Dr. Oz Show, The View, and other television programs.

Under the FTC settlement the defendants are barred from making deceptive claims about the health benefits or efficacy of any dietary supplement or drug product, and will pay $9 million for consumer redress.

The FTC charged that Duncan and his companies, Pure Health LLC and Genesis Today, Inc. deceptively claimed that the supplement could cause consumers to lose 17 pounds and 16 percent of their body fat in just 12 weeks without diet or exercise, and the claim was backed up by clinical study.  In September 2014, the FTC settled charges against the company that sponsored the severely flawed study that Duncan discussed on Dr. Oz show.

For additional information, click here.

Teaching Suggestions

  • Prepare a list of activities individuals can do to stay healthy and maintain a healthy weight.
  • Choose a current issue of Consumer Reports, Money, Kiplinger’s Personal Finance, or other magazines and summarize an article that relates to losing weight.

Discussion Questions

  1. How can you reduce personal health care costs, including losing weight?
  2. Why is it important for consumers to carefully evaluate products?
  3. What are the keys to successful weight loss?
Categories: Chapter 9, Frauds and Scams | Tags: | Leave a comment

Financial Flowerpots

Posted on June 3, 2015 by Melissa Hart

Many devices are used for effective money management.  One is called “the financial flowerpot system,” with each imaginary pot representing an account where you “plant” the funds for achieving a financial goal.  When you direct money into this account, it’s like watering and feeding your goal.

To fill up the “financial flowerpots,” start a regular saving and investing plan with the money automatically withdrawn from your paycheck or bank account.  This automatic savings plan may be viewed as an automatic watering system for an actual flowerpot.

Three main flowerpots are recommended:

1.  The Solutions Flowerpot is the emergency fund.  These funds are available to solve problems and have a financial cushion, giving you financial peace of mind.

2. The Retirement Flowerpot is to save for your future financial independence.

3. The College Flowerpot is for those who are saving for their children’s education or for their own advanced studies in the future.

Smaller flowerpots may be used for other financial goals.  For each flowerpot, set aside a savings amount each month that will grow to your desired goal in the timeframe you set.

For additional information on financial flowerpots, click here.

Teaching Suggestions

  • Have students obtain information from others about the methods used to achieve financial goals.
  • Have students propose a method they might use to achieve a financial goal.

Discussion Questions 

1. What are the benefits of thinking of savings goals as financial flowerpots?
2. What are other potential savings goals for various household situations?

Categories: Chapter 1, Chapter 2, Financial Planning, Savings | Tags: , | Leave a comment

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