Posts Tagged With: Financial checkup

Free Financial Coaches Give the Working Poor a Second Chance.

“. . . Financial coaching initiatives that target the working poor have sprung up in communities across the country.”

For low-income wage earners, the idea of paying hundreds of dollars for professional financial help can seem about as far-fetched as buying a winning lotto ticket.  And yet, help is available in a number of the nation’s larger cities including Chicago and New York.  In most cases, the financial coaches volunteer their time and have a background in personal finance or have received financial and investment training.  The participants receive specific suggestions geared to their individual situation that are designed to improve their credit score and help them build a sound financial future.  According to Richard Cordray, the director of the Consumer Financial Protection Bureau, “Having a trusted, well-informed financial coach can increase your odds of financial success.”

For more information, click here.
Note:  There is a short video that accompanies this article.

Teaching Suggestions

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

  • Point out that often low wage earners don’t have the money to pay a financial coach to help them manage their finances.
  • Describe different situations where the advice from a financial coach could make a difference in someone’s financial future. For example, a coach’s suggestions on how to improve someone’s credit score could lead to obtaining a credit card for emergencies or a short-term loan to bridge the gap between unemployment and employment.

Discussion Questions

  1. Assume you are unemployed and have exhausted your emergency fund.  You are behind on monthly payments including your rent and utilities.  What steps can you take to improve your financial situation?
  2. In the above situation, what suggestions do you think a financial coach could provide that would help you work through this difficult situation?
Categories: Chapter 1, Chapter_11, Financial Planning, Financial Services | Tags: , , | Leave a comment

The Credit Card Mistake That’s Costing Millenials

“A new survey from BMO Harris Bank shows consumers are confused on how credit card balances affect credit scores. . .”

While using a credit card is one of the easiest ways to build credit, there are plenty of misconceptions about how best to do that.  According to this survey

  • 39 percent of Millennials—people between ages 18 to 34—believe carrying a balance increases their credit scores. In fact, carrying a balance does not improve credit scores and can actually hurt scores.
  • 23 percent of those surveyed indicated that a person’s educational level affects his or her credit score. In fact, a credit score is based only on the information in your credit report, and educational level is not included in your credit report.
  • 27 percent of those surveyed thought checking their credit scores would lower their credit score. In fact, the opposite is true:  If you regularly check your credit scores, it’s likely you’ll make financial decisions that will improve your credit score.

For more information go to http://finance.yahoo.com/news/credit-card-mistake-thats-costing-103040745.html

Teaching Suggestions

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

  • Discuss why a credit score is important.
  • Stress the importance of “managing” credit card debt.

Discussion Questions

  1. What affect will your credit score have on the finance charges you pay for credit purchases?
  2. How can your credit score affect your ability to purchase a home or an automobile?
  3. Assume you have a low credit score and have been turned down for a home mortgage. What steps can you take to increase your credit score?
Categories: Chapter 2, Chapter 5, Chapter_11, Credit Cards, Credit Mistakes, Credit Scores | Tags: , , , | Leave a comment

Retirement Catch Up: Saving After 50

“. . .more than a third of people 55 and older have saved less than $10,000.”

According to Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation and daughter of Charles Schwab, there are a number of steps anyone can take to get their financial house in order.

For example, Ms. Schwab-Pomerantz suggests that savings should be non-negotiable–it’s that important.  To increase the amount saved, people should take a hard look at where they are spending their money.  For example, do you really need cable television or that new car?

She also suggests that a person in their 20s should save 10 percent of income in order to save the money needed for a comfortable retirement.  If the same person waits until she or he is in their 30s, the percentage for savings increases to 20 percent while someone in their 40s will need to save 30 percent of their income.  Finally, a person in their 50s will need to save 40 percent of income to provide for retirement.   The Bottom Line:  The percentage a person must save for a comfortable retirement increases if they wait to begin a savings and investment program.

For more information go to http://finance.yahoo.com/news/retirement-catch-up–saving-after-50-043631641.html

Teaching Suggestions

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

  • Remind students how small changes in how they manage their financial affairs can change their lives both now and when they reach retirement age.
  • Stress the importance of beginning a savings and investment program sooner rather than later.
  • Use a Time Value of Money calculation to show how regular savings can increase over time.

Discussion Questions

  1. Why is it important to begin a savings and investment program when you are in your 20s?
  2. Where does the money come from to begin a savings and investment program?
Categories: Retirement Planning, Savings, Time Value of Money | Tags: , , | Leave a comment

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