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.

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.

“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.

Check out these strategies to help children of all ages make the important connection between earning, saving and reaching their own financial goals.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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/.
6. 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.

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.

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.

The peace and quiet of this year’s holiday got me thinking about Independence Days past and comparing the many bright flashes of fireworks that have been visible in previous years.  And I wondered– how much money did we all save this year without fireworks?

So here’s a suggestion– take the amount that your family DIDN’T spend on fireworks and put it into savings now.  Let it start your savings program with a bang!  The money saved by not buying fireworks could be the beginning of your  fund for Christmas or back-to-school expenses or other special future needs.

In typical years, a lot of money goes up in smoke on the Fourth of July.  This year, conditions forced us to save.  So, make those savings real– deposit your fireworks fund and let it grow for future family needs.  Money in the bank– now that’s a real cause for celebration!

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.

Estimate Your Financial Needs

The first step is to determine what your financial needs are for each goal.  For example, how many years until retirement for you and college for your child(ren)?   What do you expect to receive for retirement from your employer and/or Social Security?  What standard of living do you want in retirement?  What’s the expected cost of your child’s preferred college?  Gather the facts and set goals now.  Periodically meet with your company’s retirement representative and visit college websites to stay on track with your estimates.

Retirement Takes Priority

Although a child’s college education is certainly an important goal, you should probably focus on your own retirement if funds are limited.  With generous company pensions mostly a thing of the past and Social Security in a financial strain, the burden is primarily on you to fund your retirement.  Make it automatic- enroll in your employer’s retirement savings plan and take advantage of matching funds, if offered.  Or, set up your own automatic savings transfers from a checking account to a retirement savings account. If you wait until your child is in college to start saving for retirement, you’ll miss out on years of tax-deferred growth and compounding of your money.  Remember that a child can get help to attend college by taking out loans (or maybe even receiving scholarships), but no one will give you a loan or a scholarship for your retirement years!

Saving for Both Retirement and College

Ideally you’ll want to try to save for both retirement and college at the same time.  Here are some tips to consider:

1. Work longer- The longer you work, the more money you’ll earn and the later you’ll need to dip into your retirement savings.
2. Reduce your standard of living, now or later (or both)- You might be able to adjust your spending habits now in order to save money for later.  Or you may consider a more frugal lifestyle in retirement.
3. Increase your earnings now- Consider increasing your hours at your current job, finding a new job with better pay, taking a second job or having a previously stay-at-home spouse return to the workforce.
4. Expect your child to contribute more to college expenses- Encourage your child to work and save during high school for future education needs.  Help them find and apply for all scholarships which they might be eligible for.  Expect them to work part-time while in college and explore student loans if funds are still short.
5. Send your child to a less-expensive school- A pricey “brand-name” private school may be your child’s dream, but unless they receive a generous scholarship, they may need to lower their expectations.  A state university or a smaller liberal arts college might provide a similar education for a far lower cost.
6. Get creative to reduce education costs- Take dual-credit classes at a local community collge while in high school,  attend a local college and live at home to save on room and board, enroll in an accelerated program to graduate in three years instead of four, take advantage of cooperative training where paid internships alternate with coursework, or defer college for a year or two and work to earn college funds.

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.

Does that mean most folks do (take regular medications)?  My emergency room experience got me thinking about how valuable good health is and how many of us live lifestyles which may put our good health at risk.  How many of us pop a pill for high blood pressure, high cholesterol, high blood sugar, or other conditions which might be controlled or eliminated with better attention to our health habits?  And how does this lackadaisical approach to our health affect our financial status?

The connection between health and wealth

“Your health may determine your wealth.” These words appear in Who’s Afraid to Be a Millionaire?, a book by financial journalist Kelvin Boston, who notes that healthy people often have long life expectancies, which gives their investments time to grow.

“Longevity nurtures prosperity,” explains Boston, who adds that good health gives you more time to build wealth. Conversely, those in poor health often experience the wealth-draining effects of disability, sickness, and premature death, including high medical expenses, lost earnings, and reduced productivity.

One factor in particular, Boston says, can erode financial well-being–  the economic impact of preventable or treatable illness. Examples include hypertension, diabetes, overweight and obesity. Boston summarizes simply, “good health is one of the best investments you can make.”

Invest in good health

People “invest” in their health through healthy lifestyle choices, just like they invest in wealth-building assets such as a college education or shares of stock.  Every time you choose  healthy foods, get regular vigorous exercise and adequate sleep or lose a few pounds, you are making a deposit in your health “account.”  But if you are content to pop a pill rather than hit the gym,  lose the weight, or eat those vegetables, you may be short-changing the financial benefit that comes from good health.  So, take your health seriously and do all you can to get healthy and stay healthy– you may even become more wealthy as a result!

For more information and motivation, check out Small Steps to Health and Wealth– an online resource complete with competitive and non-competitive challenges created by Rutgers Cooperative Extension in New Jersey. 

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.

1.  You’re never too old to save.  There’s still hope, even for late-comers.  Anyone over age 50 can make catch-up contributions of as much as $5,000 to a 401(k) and an additional $1,000 to an IRA.  It may not be easy to do, but a few years of serious savings can make a huge difference.

2.  You’ll need more money than you think.   A $1 million nest egg sounds like a lot.  But, spread over a 30-year retirement, it amounts to about $50,000 a year.  And, costs for health care, gasoline, and other living expenses will continue to go up while your retirement income remains fixed.

3.  A company penison won’t cover it all. Baby boomers will get far less financial help from employer pensions than their parents did.  According to the Employee Benefit Research Institute (EBRI), the average annual pension payout for ages 65 and older is around $10,900. 

4.  You may not be able to pick your retirement date.  Your strategy for retirement saving may be to work as long as possible.  While about a quarter of employees aim to work until age 70, just 8 percent of current retirees managed to stay at work that long, according to EBRI.  Health problems, layoffs and the need to care for a family member typically drove their decision to leave the workforce.

5.  Your personal savings will be the key. Personal savings typically make up half of the income stream for retirees.  Take advantage of generous contribution limits for IRA and 401(k) savings plans for older workers, and save as much as you can afford to set aside.  If your employer offers matching contributions to your retirement fund, make sure you are putting in enough to obtain the company match.

There are many resources for those wanting to learn more about retirement savings.  However, here are a couple of my favorites:  Catch Up Strategies for Late Savers, from eXtension, the national database of University Extension resources.  Women should also check out WISER: Women’s Institute for Secure Retirement for information on retirement issues unique to women.

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.

On Tuesday, March 29, at 12:00 noon join us for the Extension educational program “Leaving a Legacy” in the Grandstand Meeting Room of the Finney County Fairgrounds in Garden City. The guest speaker will be Douglas Beech, Kansas 4-H Foundation Planned Giving Officer.  A light lunch will be provided with this free program.

This program will give a brief overview of the major tools– some familiar, some not– that allow someone to preserve and pass on their values through their estate plan. This program will focus on general how-to information and will not address or promote specific charities. 

This information will be valuable for individuals who might be interested in leaving a legacy, but also for churches, organizations and boards which accept contributions from others.

Please pre-register at the Finney County Extension Office, 620-272-3670, by Monday, March 28 to ensure adequate program materials and meal supplies.

“Knowledge for Life” provided by the Finney County Extension Office and K-State Research and Extension.