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:
- 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.
- 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.
- 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.
- While shopping, refer back to your budget. This will help you decide to buy an item now or wait until a later time.
- 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.
- 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.
- What experiences did you have growing up that helped you learn financial literacy and wise money management skills?
- Describe other methods that might be used to teach shopping and money management skills to young people and others who might lack these abilities.
Can you imagine getting paid each day that you work? That’s the idea behind Instant Financial’s app, which puts cash in the hands of workers on the same day they work. This program attempts to reduce absenteeism and employee turnover for restaurant chains.
At the end of each workday, employees may take 50 per cent of their pay for that day and transfer it to an instant account; the other half is paid at the end of the regular pay period. Funds in the Instant account may be accessed with a debit card or transferred to a bank account.
The app can reduce the use of payday loans, with exorbitant borrowing rates, as workers have access to funds between pay periods. Instant Financial makes money from fees charged employers and merchants when debit cards are used; although employees may pay ATM fees.
A major concern of the app is that it might discourage long-term financial planning. Poor budgeting habits could result in increased use of debt due to a lack of funds at the end of the month. Employees who use the app are encouraged to practice wise money management, including creating and building an emergency fund and other savings.
For additional information on instant pay, click here.
- Have students talk with others about the benefits and drawbacks of an instant account.
- Have students describe two situations: (1) a person who used the instant account wisely, and (2) someone who mismanaged their money as a result of using the instant account.
- What factors might be considered when deciding whether or not to use an instant account?
- Describe how an instant account might result in improved money management and in weakened money management activities.
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.
- 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.
- How might the advice offered in this article be communicated to people who are victims of a natural disaster?
- Describe common mistakes people might make when encountering a natural disaster.
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.
- 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.
- Explain which of these financial planning barriers you believe is the most dangerous.
- What are possible actions a person might take to avoid these financial planning barriers?
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.
- 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.
- What personal financial planning areas provide people with the most difficulty?
- Describe potential apps or websites that might be created to assist people with their personal financial planning activities?
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.
- 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.
- What items on the survey are topic areas for which most people need additional learning?
- How might people be encouraged to learning more about various personal finance topics?
Many people in our society are not able to save. They are barely able to cover their monthly expenses. However, there are some actions that can help you get on a path to saving.
In the first month, open an online bank account and deposit a minimum amount, such as $5. This is a very important first step. In month two, save $15 (or more) in your online savings account. One way to do this is with Paribus, an online tool that searches various retailers to determine if you are owed money for past purchases as a result of a price drop.
Your goal for month three is to work toward savings $100. This could be accomplished by signing up with market research companies to participate in providing opinions. Or, you could try selling old items online. By consistently using various ideas for earning extra money, you should be able to save $100 a month.
For additional information on starting a savings program, click here.
- Have students to talk various people to determine actions they take to reduce spending or earn extra money.
- Have students create a summary presentation describing actions that might be taken to increase a person’s savings.
- Describe attitudes and behaviors that might result in people not being able to save for the future.
- What are actions you have taken to reduce spending and to earn extra money for savings?
Many people grow up without learning how money works, which usually results in difficulties. Studies reveal that less than one-fourth of millennials have basic financial knowledge.
A vital starting point in the learning process is admitting that you don’t know. For example, most people do not know that credit scores show if a person has paid his or her bills on time and how much has been borrowed. Most people are not aware that credit reports often contain incorrect information, or how to check for errors.
Credit card rewards may seem like a good deal but only is you pay your bill on time every month. If you don’t, late fees and interest charges can more than outweigh any reward point benefits.
These are just two areas on which many young people, as well as others, lack a basic understanding. However, a wide variety of sources are available to add to your knowledge.
For additional information on learning how money works, click here.
- Have students conduct research to determine the financial knowledge among various age groups.
- Have students create a video presentation with suggestions for improving financial knowledge.
- Why are people often not informed on basic money topics?
- What are the most common topics that on which many people lack basic financial knowledge?
An estimated one-third of recently married couples are surprised by the financial situation of their spouse. A similar number (36 percent) are not aware of their partner’s spending habits. Based on a study by Experian Plc, only 40 percent knew the credit score of their partner.
Men more often hid money from spouses. About 20 percent of men had secret bank accounts about which their partners didn’t know; compared to 12 percent of women. Regarding the maximum amount that they would spend before consulting with their spouse, men replied $1,259; women said $383. Hidden financial information can have a significant adverse effect on the relationship of a newly married couple.
For additional information on newlywed finances, click here.
For additional information on the survey results, click here.
- Have students survey newly-married people about their disclosure of financial information to their spouse.
- Have students create a list of problems that might arise between newly-married people who do not inform their spouse about their personal financial information.
- What financial information would be most important for newly-married people to disclose to their spouses?
- How could a lack of disclosure of financial information to a spouse create relationship difficulties?