Are You Saving Enough for Retirement?

Posted on January 21, 2015 by Melissa Hart

For many, the answer is “no” even when you think it is “yes.”  Options to save include workplace retirement plans, Individual Retirement Accounts (IRAs) offered by many banks and investment companies, and the U.S. Treasury Department’s new “myRA” (My Retirement Account) program.

The myRA account is simple, safe and affordable retirement savings program that is backed by the U.S. government.  Savers can open an account with as little as $25, there are no fees, the account will earn interest at a variable rate, and the investment is protected so the account balance will never go down.

Many working people can save considerably on their taxes through qualified retirement savings.  And, if your employer offers a retirement savings program of any kind, find out whether it will match your investment contributions, and then don’t lose out any matches.

For Additional Information, click here.

Discussion Questions

  1. Why is planning and saving for retirement important at any age?
  2. What are the several methods of saving for retirement?
  3. Is developing the habit of saving for retirement easier when you are young?

Teaching Suggestions

  1. Ask students if they have started a savings plan for retirement.
  2. How is MyRA different than a traditional and a Roth IRA?
Categories: Chapter_14, Retirement Planning, Savings | Tags: | Leave a comment

Auto Dealer Financing

Posted on January 17, 2015 by Melissa Hart

You want a car and need financing, but your credit isn’t so great.  Most dealerships have a Finance and Insurance (F&I) Department that will tell you about their financing options.  To get the process started, the F&I Department will ask you to complete a credit application, which includes your monthly income and information on current credit accounts, including debt you owe.

At least that is how it’s supposed to work.  But there have been reports that some dealers inflate your income information for the financing without your knowledge.  That can cause you serious financial harm.  You could be saddled with car financing that you can’t afford to repay.  That means your car could be repossessed and your credit score could take a hit.

The Federal Trade Commission has a few tips to help you avoid unscrupulous finance deals:

  • Consider your options for financing. You might be able to arrange financing directly with a credit union or finance company before you pick a car.
  • Research the dealer before visiting the sales lot. Check the dealer’s reputation online by searching for the company’s name with words like “scam,” “rip-off,”or “complaint.”
  • If a dealer encourages you to overstate your income, take it as a sign that the dealer is not reputable, and leave the dealership.
  • Ask to see the credit application, completely filled out, before you sign it. Make sure your income and other personal information is correctly listed.

For more information, click here:

Discussion Questions

  1. Why is it important to consider other sources of financing before visiting an auto dealer?
  2. What might be the consequences if an auto dealer inflates your income?

Teaching Suggestions

  1. Have students visit an auto dealership to gain additional insight into this high-cost financing service.
  2. Have students make a short presentation with a summary of their findings.
Categories: Chapter 5, Chapter 6, Financial Services | Tags: , | Leave a comment

Raise a Glass and Toast the U.S. Economy in 2015

Posted on January 14, 2015 by Melissa Hart

According to Mark Hamrick, Washington Bureau Chief, at Bankrate.com, “We go into 2015 and put the very bitter memory of 2007, 2008 behind us.”

With the national unemployment rate down to 5.8 percent, 2015 should be a good year for the economy.  According to Hamrick, “The economy has really done a great job of damage repair, with acceleration here recently with the quality of jobs being added.”  This trend will continue as employers are expected to continue adding workers in 2015 at a monthly pace of about 200,000 each month.

In addition to a lower unemployment rate, projected U.S. economic growth of nearly 3 percent over the next 12 months and stock prices near record highs should continue to fuel the nation’s economy.  On the down side, expect the Federal Reserve to raise interest rates around June 2015.  Also, there is the unknown factors of political and social unrest around the world and the typical global economic problems that could be a drag on the economy.

For more information, click here.

Teaching Suggestions

Note:  There is a 2 minute video that accompanies this article that you may to use as part of your classroom presentation.

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

  • Discuss the current state of the economy.
  • Explain why unemployment rates, interest rates, political and social unrest, and global economic problems can affect the U.S. economy.

Discussion Questions

  1. Although many economists and investors are enjoying the economic recovery over the last few years, many individuals do not share the same optimism. How do you feel about the nation’s economy?
  2. Are you optimistic about your own economic future? What specific steps can you take to improve your personal economic future?
Categories: Chapter 1, Chapter_11, Economy, Financial Planning | Tags: , , | Leave a comment

5 Questions to Help You Get Your Financial Life in Order

Posted on January 10, 2015 by Melissa Hart

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

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

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

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

For more information, click here.

Teaching Suggestions

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

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

Discussion Questions

  1. Why is your net worth, salary, savings, and debt-payment burden important?
  2. What implications does the question “If you don’t see the next New Year, what would happen to your family financially?” have on your financial planning activities?
  3. When you look at your finances, what makes you feel good and what makes you feel bad? Based on your answer, what can you do to change your answers to this question?
Categories: Chapter 2, Chapter_11, Financial Planning, Savings, Uncategorized | Tags: , , | Leave a comment

52-Week Money Challenge

Posted on January 7, 2015 by Melissa Hart

Do you want to take the 52-Week Money Challenge? 

Before saying no, consider it is a simple way to accumulate $1,378 over the next year.  Before saying yes, realize that while it is easy to save small amounts at the beginning of the year, it becomes increasingly harder to save larger amounts at the end of the year on a weekly basis.   Take a look at the table below to see how your money accumulates each week.

image source

For more information, click here.

Teaching Suggestions

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

  • Stress that even small amounts of money over time can increase the amount available for savings or investing.
  • Discuss how monitoring your spending habits can “find” the money that can be used for savings and investing.
  • Talk about the need for financial discipline when managing, saving, and investing your money.

Discussion Questions

  1. In the above table, you begin by depositing $1 the first week, then each week, the amount you save increases. Where can you find the money needed to fund this type of savings program–especially toward the end of the year?
  2. Assuming you achieved the 52-week challenge and you now have $1,378 dollars in the bank. Would you leave it in the bank, pay your bills, or invest the money?  Justify your choice.
  3. After completing one 52-week challenge, would you take another money challenge? Why or Why Not?

 

Categories: Chapter 4, Chapter_11, Financial Planning, Investments, Savings | Tags: , , , , | Leave a comment

Treasury’s myRA To Debut in Late 2014

Posted on December 31, 2014 by Melissa Hart

New Retirement Savings Program Will Provide Safe, No-Fee Starter Accounts

According to the Federal Reserve Board’s recent publication, Report on the Economic Well-Being of U.S. Households in 2013, 31 percent of respondents in a national study reported having no retirement savings or pension, and more than half (54 percent) of those with income with incomes under $25,000 reported the same.  Compounding this lack of preparedness is the reality that many employees (35 percent) in the United States who work for private companies also lack access to an employer-sponsored retirement plan, according to the U.S. Bureau of Labor Statistics.  What’s more, access isn’t provided evenly across all wage-earners.  While 85 percent of those in the highest wage-earning quartile had access to retirement plans, only 38 percent of those in the lowest quartile had access in 2014.

For more information, go to:

www.treasurydirect.gov/readysavegrow; or www.myra.treasury.gov

Teaching Suggestions

  • Ask students if the myRA program is available to them whether they are full-time or part-time employees.
  • What are the eligibility requirements for myRA and what is the sign-up process?
  • Can employees who change jobs continue to add savings to an existing myRA account?

Discussion Questions

  1. Why must many individuals, especially those from low-and moderate income households, make reluctant but deliberate choices to meet short-term needs at the expense of long-term goals?
  2. Will the new myRA program be particularly attractive to low-and moderate income households?
  3. What are expected key features of the myRA programs?

 

Categories: Chapter_14, Retirement Planning | Tags: | Leave a comment

Health Insurance Marketplace Application Check List

Posted on December 24, 2014 by Melissa Hart

When you apply for or renew your coverage in the Health Insurance Marketplace, you’ll need to provide information about you and your household, including income, and insurance coverage you currently have, and some additional information.

Use the checklist below to help you gather what you need to apply for coverage.  Open enrollment ends February 15, 2015.

  • Home and/or mailing addresses for everyone applying for coverage.
  • Social Security Numbers.
  • Document information for
  • Employer and income information for every member of your household (for example, from pay stubs or W-2 forms—Wage and Tax Statements)
  • Your best estimate of what your household income will be in 2015.
  • Policy numbers for any current health insurance plans covering members of your household.
  • A completed “Employer Coverage Tool” for every job-based plan you or someone in your household is eligible for. (You’ll need to fill out this form even for coverage you’re eligible for but don’t enroll in.)
  • Notices from current plan that include your plan ID, if you have or had bad health coverage in 2014.

For more information, go to:

https://marketplace.cms.gov/outreach-and-education/marketplace-application-checklist.pdf

Teaching Suggestions

  • Many states are expanding Medicaid to cover more people. Ask students to find out what Medicaid expansion might mean for them.
  • Why do some people qualify for an exemption from the fee based on income or other situation?

Discussion Questions

  1. Do most people who apply for health insurance through marketplace qualify for premium tax credit?
  2. What penalties are imposed on people who don’t have a coverage in 2015?
  3. Can you buy a plan outside the marketplace and still meet the health care law’s coverage requirement?
Categories: Chapter 9 | Tags: | Leave a comment

Stock Investing for Dummies

Posted on December 20, 2014 by Melissa Hart

To make the most of your money and your choices, educate yourself on how to make stock investments confidently and intelligently . . .”

This article can be used to help reassure people who are afraid to make their first stock investment.  Specific topics in the article include

  1. The Ten Most Important Points about Stock Investing
  2. Checking Important Company Fundamentals Before Investing in a Stock
  3. Financial Measures to Consider before Investing in a Stock
  4. A Mandatory Reading List for Stock Investors
  5. Reassuring Points for Nervous Stock Investors

Information in each of the above topics is explained in a straight-forward and easy-to-understand format beginning investors can understand.  The last topic, Reassuring Points for Nervous Stock Investors is especially important for people reluctant to invest in stocks.

For more information go to http://www.dummies.com/how-to/content/stock-investing-for-dummies-cheat-sheet.html

Teaching Suggestions

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

  • Reinforce the benefits of a long-term investment program. Be sure to point out that the value of quality stocks usually increases over a long period of time–a concept stressed in the text.
  • Stress the importance of evaluating a stock before investing your money.

Discussion Questions

  1. What are the benefits of a long-term investment program that includes not only stocks, but also mutual funds, bonds, and other investment alternatives?
  2. Why are people afraid to invest in stocks?
  3. What steps can you take to overcome the fear of investing in stocks?
Categories: Chapter_12, Investments | Tags: , | Leave a comment

Plunging Crude Prices Hammer Energy Companies

Posted on December 17, 2014 by Melissa Hart

“A decision by OPEC this week to maintain current levels of oil production is hammering major energy companies in the U.S. and abroad.”

This article explores the winners and losers of lower energy prices.  For consumers, lower energy and gas prices means increased discretionary funds for purchasing consumer goods including food, clothes, electronics, and presents for friends and relatives during the holiday season.  Also, both large and small retailers benefit because consumers have more money to spend.  And airlines, package delivery services, cruise lines, and other companies are spending less on fuel.

The disadvantages of lower energy and gasoline prices are already causing the stock prices of big oil companies including Chevron, ConocoPhillips, Exxon Mobil, Marathon Oil, and British Petroleum to decline.

For more information go to http://finance.yahoo.com/news/plunging-crude-prices-hammer-energy-companies-123639239–finance.html

Teaching Suggestions

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

  • Discuss the impact of the cost of energy and gasoline on a consumer’s budget.
  • Describe alternatives uses for the savings that result from lower energy and gasoline prices.

Discussion Questions

  1. What is the current price for a gallon of gasoline? How does this compare with the cost 6 months ago?  What impact does this have on your spending patterns and your personal budget?
  2. While you are saving money at the pump, the big question may be how you plan to use the savings. Are there alternatives to spending the money on clothes, entertainment, or holiday gifts?
  3. Now that the value of energy company stocks has declined, would you invest in a company like Exxon Mobil or Chevron? Explain your answer.
Categories: Chapter 2, Chapter 6, Chapter_12, Investments, Wise Shopping | Tags: , , , | Leave a comment

Great Ways to Save

Posted on December 13, 2014 by Melissa Hart

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

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

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

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

Teaching Suggestions

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

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

Discussion Questions

  1. Some people say that saving small amounts of money doesn’t really help accomplish their long-term financial goals. Do you agree or disagree?
  2. How can one of the suggestions in this article help you increase the amount you save or invest?
Categories: Chapter 2, Chapter_11, Investments, Opportunity Costs | Tags: , | Leave a comment

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