Archive for the ‘Money’ Category:
Teen money expectations vs reality
One of the many things I love about kids is their optimism. As parents, we don’t want to crush that spirit! But we can help them by guiding their enthusiasm in a realistic direction.
Consider a recent Schwab 2011 Teens and Money Survey. A full 81 percent of teens aged 16 – 18 plan to choose a career either because they’re passionate about the work or they feel it will help them do good for others. And that’s great because we want our children to grow up and be happy in their professional lives. Besides, a happy workforce is a productive workforce!
But when it comes to the starting salary expectations of these teens, they’re a little out of touch with reality. These teens expect to begin their careers earning $73,000. This is interesting because these same teens believe their current family income to be $70,000. If we do the math, we see that their optimism puts them $3,000 ahead of what they think their parents are currently bringing in.
It would be interesting to ask them what they believe the median annual American household income is. Would they be surprised to find out that it’s $49,909? What makes them think that they can start off $23,000 higher than the median for established households?
It’s not about deflating their dreams. Rather, it’s important that we encourage our kids to do and be what they want while setting reasonable expectations.
How do we do this? We talk to them about what they want to be when they grow up. From there, we can help them figure out the financial outcome of following their dreams. Search engines are an easy way to find out starting salaries of different professions. If they end up with sticker shock, reassure them that their dreams are not out of reach—they’re just going to require a bit more up-front planning. Tell them that by creating a budget and setting up an automatic savings plan, they’ll become better managers of their money, which will ultimately help them get more of the things they want in life. It’s not so much the career they choose; it’s the money management choices they make along the way that will lead them toward financial security.
Enthusiasm can go a long way. But at the end of the day, without a solid financial plan and some realistic expectations, enthusiasm doesn’t pay the bills.
Source: America Saves.org
“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.
Subscribe to the comments for this postWhen are Black Friday bargains no bargain at all?
Americans will spend about about $704 per household on gifts, decorations, food and other purchases this holiday season, according to the National Retail Federation. This is up from $688 per household last year.
If this amount was put on a credit card at 18 percent interest – and assuming only minimum payments at 2 percent were made – it would take more than six years to pay off the balance. Consumers would also pay $485 in interest charges.
Considering the sluggish economic climate, families are encouraged to plan their holiday purchases carefully. Experts advise families to avoid allowing holiday spending to cause their financial security to backslide.
It’s best to say “no” to gifts and other purchases that you truly cannot afford. According to Carol Young, K-State Research and Extension family financial management specialist, “The greatest gift you can give your family is financial stability.”
From gifts and parties to decorations and travel, the holiday season brings a multitude of financial pressures.
“Don’t let this pressure– often combined with enticing sales and impulse purchases– cause you to lose perspective,” Young says. She offers this advice for Black Friday sales shoppers– “Remember, spending money you don’t have to save money on a sale item is no savings at all.”
“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.
Why You Need Some Cash On Hand
Financial advisors encourage saving an emergency fund to cover unexpected expenses and typically encourage banking the savings in an interest-bearing account.
“That’s sound advice, yet having cash available is also a must,” said Carol Young, K-State Research and Extension financial management specialist.
Imagine, for example, if the neighborhood bank is in the path of a tornado or flood and is damaged, destroyed or without the electrical power needed to access electronic records, operate ATMs or complete a credit card transaction.
“With cash in hand, victims in such circumstances will be better able to cover immediate expenses, such as food, water, shelter, medications, gas, rental car or other transportation in an emergency,” Young said.
Emergency Cash
The amount needed will depend on the number of members in the household, any special needs, the amount you feel comfortable possibly losing, and the severity of the emergency.
A few hundred dollars could be enough to bridge the gap, said Young, who advised tucking the cash into a water- and fire-proof emergency kit with medications, copies of insurance policies and other essential records (identification, health records and insurance cards, a recent bank/investment statement, family and business contact numbers and address book). The kit can be taken to a storm or emergency shelter along with a battery-powered radio, non-perishable foods, etc.
Much of the family and business contact information such as names, addresses, phone numbers, financial account numbers, or scanned copies of documents can be saved electronically to a portable flash drive or a web document account and updated as needed, she said. Including passwords on the flash drive is not recommended.
More information about managing money successfully is available online at: www.ksre.ksu.edu/financialmanagement. Information about disaster management also is available at www.ksre.ksu.edu, and via the Extension Disaster Education Network (EDEN) http://eden.lsu.edu , which is a collaborative multi-state effort by university extension services across the country to reduce the impact of disasters through education.
Source: K-State Research and Extension News
“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.
Summer– Time for Youth to Earn, Learn, and Save
Whether it is a few dollars from babysitting or that first “real” job, summer is generally the time of year when youth have the most time and opportunity to earn money. While working and earning is an important experience on its own, the habits that youth develop when they obtain their first pay (no matter how small) can often stick with them for years to come.
Check out these strategies to help children of all ages make the important connection between earning, saving and reaching their own financial goals.
- Make a Plan: Work together with your child to make a financial plan for the summer. Taking the time NOW to work with your child to make a plan for handling their “income” can establish positive financial habits that will last a lifetime. Create a student budget. Visit www.EconCouncil.org to download a budget for students and for other printable saving activities.
- Set a Goal: Visit www.YoungAmericaSaves.org and set savings goal with your child. The amount students save each month is less important than the fact that each child is SAVING on a regular basis. After enrolling in Young America Saves and setting a goal, students receive a monthly newsletter created by students just for other students.
Save First: Don’t be afraid to set a clear expectation with children. “Saving first” is always a great start and is a commonly used rule of thumb. While older students can understand saving a certain percentage of their earnings, it’s most important that even the youngest earners learn to save SOMETHING before they spend.- Bank On It: Open a Savings Account for Your Child. Opening a savings account is a great first introduction to the financial system for any student. Savings accounts offer students a safe place for their money, pay interest and help develop a lifelong saving habit. Look for an account with a low minimum and no regular fees.
- Find a Saver: Help your children find a savings role model. Whether it’s a neighbor, a sibling, a cousin or a local young entrepreneur, students learn well from other students. Check out stories from young savers in On the Money Magazine at http://www.youngillinoissaves.org/student/.
- Pay Day: Understand that paycheck. Receiving that first paycheck can be the highlight of a new worker’s day. However, many young people are shocked when they discover so much of their paycheck is “missing.” A helpful resource from the University of Arizona helps new earners learn about paychecks, paycheck deductions and employment forms. Suitable for the classroom, too, “Understanding Your Paycheck” includes information and activities about paychecks.
Helping your youngsters make the most of their first experience with earning and saving can set them on the path towards financial independence! Whatever you do to help children get on the right track financially this summer is a great investment in their future!
Source: AmericaSaves.org
“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.
Thirsty? Rethink Your Drink!
Thirsty? The heat of summer increases the need to drink plenty of fluids. But which beverages can we choose to quench our thirst without sinking the grocery budget?
Drinks are one of the easiest places to save money on your food bill. In order to do this, we have to be willing to let go of old, expensive habits and open the door to newer, cheaper ones.
Beverages: Basics vs. Luxuries
When we’re thirsty, it’s a signal that our bodies need water. Nutritious beverages like milk and fruit juice also play a valuable role in maintaining good health. But, most other beverages besides water, milk and juice are luxuries. These include such favorites as soda pop, sports drinks, fruit drinks, lemonade, coffee, tea, and almost any other beverage you can imagine. They add calories, caffeine, sugar, fizz and flavor to our diet. They do not add significant nutritive value. When we buy these types of luxury beverages, we are paying for someone to combine water and flavorings and then package them in a container that probably costs more than the beverage itself.
This doesn’t mean we need to give up our favorite drinks. It does mean that we need to recognize them for the luxuries they are. Then it’s a lot easier to put them in their proper place in the budget.
Beverage Priority Ranking
One way to approach the beverage budget is to assign a priority ranking for the drinks we may want to buy. Below is one example. Your list may be different, but it gives an idea of how to begin to rethink your drinks:
High Priority - Tap water, lowfat milk, nonfat dry milk, fruit juice concentrates.
Medium Priority - Canned and bottled 100% juices, unsweetened cocoa powder, store brand instant coffee and tea, cheap ground coffee and tea bags.
Low Priority – Whole or 2% milk, store brand soda-pop, store brand powdered fruit-flavored drink mixes and lemonade, most bottled fruit-flavored drinks and punches.
Seldom or Never- Fresh and refrigerated juices, chocolate milk, flavored coffee and tea, juice boxes or pouches, bottled water, name brand soda-pop, energy drinks, sports drinks, beer and other alcoholic beverages.
Your list won’t look exactly like this one, but it may be similar. Where there is room in the budget for a luxury beverage, by all means– indulge a little. Occasional treats make sticking to a tough budget a lot easier. Just be sure the important things are purchased first. For example, buying your favorite soda pop on sale is no bargain if you don’t have enough milk or juice to last until the next paycheck.