Tag Archives: financial literacy

April is Financial Literacy Month

budgeting“National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits.”  Wikipedia

For many of us (me, most definitely) financial literacy was achieved at the Financial College of Hard Knocks. You finally learn how to conduct your finances properly after YEARS of doing it improperly and almost driving off the financial cliff. It’s like we spend our 20s making the mess, and our 30s digging out of it.

Wouldn’t it be nice if we had just started off on the right foot? Or, now that it’s too late for us, that our KIDS get a good start? That’s the goal of Financial Literacy Month.

We will provide some helpful links in a bit. First, what are some of the basics of Financial Literacy? Here are some lessons you can impart to your kids, as provided by Huffington Post:

  • Use Cash– perfect way to illustrate that when the money is gone, it’s GONE.
  • Bank/ATM Visits– illustrates that money is a real thing. It changes hands, it gets stored away, it grows, it shrinks, it disappears!
  • Grocery Shopping– have the kids count out your $84.16 and hand it to the lady!
  • Brand Names/Store Brands – comparison shopping
  • Wants vs. Needs – This is really the core, isn’t it?
  • Build a Budget – If you buy all your wants, you don’t have much left for your needs, right?
  • Pay Utility Bills Together – see, light and heat don’t just happen!
  • Create a Wish List – Once you get the Needs taken care of, and there is some left over, make a plan for getting those Want items.
  • Clear Jar System – A piggy bank where you can see the money.
  • Sharing is Caring – Making giving a part of your plan
  • Open a Small Business for kids
  • Allowance – make it chore-based. And when the money’s gone… well, you know.
  • Games and Activities – “Monopoly” and “Life” aren’t just boring – they contain valuable financial literacy lessons!

Some links:

And there you go. I wouldn’t want any young person to go through the anxiety, the sleepless nights and the marital money fights I went through in my 20s. How about you? Share your thoughts at the MindField Online Facebook page!

November is Financial Literacy Month

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Finančna-pismenostWell, in Canada anyway. But good advice knows no borders!!

November is Financial Literacy Month, and that means a deluge of tips from banks, consumer groups and financial industry professional groups and regulators. The Globe and Mail

True enough, but what about regular folks? The Globe and Mail financial editor received some fan mail from an ordinary dude, a retiree who has written a letter of financial advice to his grown kids. You really have to read the whole thing, but here are the bullets…

  • Spread the pain of saving and pleasure of spending over your whole life.
  • Get out of debt and stay out of debt.
  • Come up with a realistic cost of retirement.
  • Leave your home out of your retirement income plan.
  • Hire an investment planner who does not sell any investment products of any kind.
  • Don’t plan for inheritance, lottery winnings or other windfalls to fund your retirement.
  • Diversify.
  • Plan to be in your investments for 50 years or more.
  • Don’t try to time investment ups and downs when buying and selling.
  • Don’t assume everything will work out on its own.
  • Don’t gamble with individual stocks. Buy whole stock markets.
  • Don’t worry if markets crash.

Like I said, MUCH more detail at the original piece, so check it out. So what do you think? Some good advice? Anything you’d like to add? Head over to the MindField Online Facebook page and let us know!

Bad Math, Bad Mortgages

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4-out-of-3-people-are-bad-at-math.american-apparel-unisex-fitted-tee.silver.w760h760How are your math skills? Back in school, mine were fine until 10th grade when I started paying more attention to the girl sitting next to me than to my homework. I stalled out in Geometry and never caught up.

And I guess I am not alone. Supposedly, Americans are at the bottom of developed world in math skills. And one study suggests that this deficit may be one cause of all the mortgage problems.

Americans who have trouble dividing 300 by 2 are much more likely to end up in foreclosure than consumers with average math skills, a new study has found. The research is among the first to directly link mortgage trouble and financial literacy, according to its authors. NBC Redtape Blog

Can’t divide 300 by 2? And here I was embarrassed because I never learned quadratic equations!

Anyway, these science nerds gave a test to various mortgage-holders. And their scores directly related to their ability to maintain a healthy credit score. Here’s the test:

  1. In a sale, a shop is selling all items at half price. Before the sale, a sofa costs $300. How much will it cost in the sale?
  2. If the chance of getting a disease is 10 per cent, how many people out of 1,000 would be expected to get the disease?
  3. A second-hand car dealer is selling a car for $6,000. This is two-thirds of what it cost new. How much did the car cost new?
  4. If 5 people all have the winning numbers in the lottery and the prize is $2 million, how much will each of them get?
  5. Let’s say you have $200 in a savings account. The account earns 10 percent interest per year. How much will you have in the account at the end of two years?

It’s alarming, but a LOT of people can’t solve these problems. Number 5 is the hardest. (answers below)

The takeaway is FINANCIAL LITERACY or, I suppose, NUMERACY. Learn your financial ABCs and don’t back yourself into a corner. So lean on your kids to do well in math, because there is always hope. I may have ended up as an English major, but that girl sitting next to me in 10th grade is now the head of the math department at an East Coast university!

Read the article – it’s really interesting. And happy Tuesday!

Answers: 1) $150 2) 100 3) $9,000 4) $400,000 5) $242 (compounded annually)