Monthly Archives: April 2014

Money Brain

money brainThere’s “mommy brain,” “senior moments” and “blonde moments.”

Well…now there’s “money brain.”

Experts say being a spender or saver depends on your brain. What you’ve been taught at home has something to do with it too, but in this post, we’re talking about that gray matter between your ears.

Recent research shows that while parents do have an effect on your financial habits, your brain’s chemistry plays a role too.

We won’t bore you with case studies, focus groups and medical gobbledygook, but here’s the deal: some of you get a thrill from instant gratification (buying that super cute pair of shoes NOW) and some of you get excited by “the deal” (think shopping sales or seeing your savings grow).

Think about it: When you get a free meal, doesn’t it taste better? Or if you find those super cute pair of shoes HALF OFF, aren’t they all that much cuter?

If you want to read the research, read The Psychology of Money-How Spending and Saving Habits are Programmed in Your Brain or The New Science Behind Your Spending Addiction.

Now that you know “you can’t help spending” … well, actually, you can…but if you feel you are one of those people like our friend Fredica (who had a spending problem, but now realizes she can control it) here’s some tips:

  • Use cash. The simple act of seeing the dollars can help. A credit card is just a plastic card, right? You can’t see the money being spent until it’s too late (and $300 later).
  • Use an ATM or branch office to withdraw your money, and make sure you get a balance inquiry. This helps you see your dwindling account.
  • Never “put it on my tab.” Pay as you go so you keep track of how much you are spending. Wait…the only place we know of where you say “put it on my tab” is a bar, and you shouldn’t be wasting money there anyway.
  • Don’t be swayed by “the big sale” or sales people! Remember that Friends episode when Joey bought all that stuff for his new apartment and racked up a major credit card bill?

Ross: What… what’s that?
Joey: It’s my VISA bill. “Envelope one of two.” That can’t be good.

No Mr. Tribbiani, it’s not good.

Don’t buy things because they’re on sale. Buy them because they are a need.

  • Know the difference between needs and wants. Read this “Needs vs Wants” from a recent post.
  • We’ve said it before. Tell someone you are trying to control your spending. A good friend will stop you from buying too much. A great friend will buy it for you. JUST KIDDING. Don’t think we want you to be a charity case. A great friend will help you and may even suggest a financial counselor at a credit union or non-profit agency.

No matter if you are a spender or a saver, you brain has a lot to do with your money smarts, as well as the habits you learned early on in your fiscal career. The bottom line is all about control, and we know you can control your brain. Well, most of us can.

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Quick Tip: Smart Uses For a Tax Refund

Destroying your debt doesn’t have to take hours. Watch our 15 second tips and then be on your merry way. These tips also air on KAKE-TV’s (ABC, Wichita, KS) regularly.

View all our quick tips.  Follow along on social media at #moneypossible.

Smart Uses For a Tax Refund

The average tax refund has been around $3,000. Don’t blow it. Pay off credit card debt. Boost your savings. Build your retirement fund. Or even invest in your home.

Needs vs. Wants

Needs vs. WantsOh, ‘Merica. We overspend, overeat and overshare.

Since this is a financial-based blog, we won’t really touch on our McDouble Dinners or TMI episodes on Facebook, we’ll just get down to the nitty-gritty of our obsession with “wanting things.”

A critical step in money management is determining the difference between a need and a want.

We know you *think* you need an iPhone with an unlimited data plan. We all thought we needed a pair of (un) fashionable furry Ugg boots. And that new car with the heated seats? How did our parents survive without toasty buns?

What you really need is a wake up call.

Those are all wants. A need is a necessity. Food, like fruit and vegetables, milk and cheese, bread and meat, is a need. Shelter, like a clean house that keeps us warm, is a need. Clean clothes to cover our body. All needs.

We Americans think we *need* cable, a large house with a media room and mancave, a new car with built in Bluetooth and Siri, the latest Xbox, the “just out” tablet, that trip to Disneyworld. Whining about not having those things is a #firstworldproblem.

We have become accustomed to think the bigger the better…the latest the greatest. In 1974 the average house was 1,694 square feet and housed 5.1 people. Homes today have gotten bigger (2,349 square feet) while families have shrunk to 2.6 people. I guess we need more space for our oversized, remote control, complete with cooler, suede couch and our 96” flat screen TV.

In other words, WE DON’T NEED MORE SPACE…OUR STUFF DOES (and yes, we are yelling).

We’ve touched on “big” wants. What about smaller wants? Do you need contacts or do you want them? Glasses are cheaper, you know. Soda and your sugary Frappuccino are wants. Sure they only cost a buck (or three), but you can definitely do without. Will a generic brand work just as well as its name brand counterpart?

Sounds silly to be talking about $1 or $3 items, but if you are really serious about destroying your debt, these “little” things are just as important as the big ticket items.

You will never be financially fit if you don’t know the difference between needs and wants. If you think your wants are really your needs, you should seek help from a financial counselor at a credit union or non-profit consumer debt organization. They will open your eyes to all your #firstworldproblems, free you of your debt and might even help you clean out your closet…literally!

Poll: Your Financial Literacy Grade

We reported that adults in the United States don’t make the grade in financial literacy. So, we want to conduct our own little poll. To help you out, we’ll even give you the definition of financial literacy…because let’s face it, sounds like you people need all the help you can get.

The President’s Advisory Council on Financial Literacy defines financial literacy as: “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial wellbeing.”

So in other words, do you know what to do with your money to pay your bills, save for the future and keep yourself out of debt? DO YOU? I guess we’ll find out…

Quick Tip: Planning and Setting Goals

Destroying your debt doesn’t have to take hours. Watch our 15 second tips and then be on your merry way. These tips also air on KAKE-TV’s (ABC, Wichita, KS) regularly.

View all our quick tips.  Follow along on social media at #moneypossible.

Planning & Setting Goals

Make a commitment to spend less than you earn. Make a list of your goals, making them as specific as possible. Picture your goal. Track your progress.

It’s a Family Affair

Financial Literacy is a family affairFinances are one of the leading causes of friction in family households.

Money can cause divorce.

It ruins the lives of your children (just ask any teenager who is denied money by a responsible parent).

It even causes jealousy with friends and neighbors, because we are all trying to keep up with the Joneses (who, by the way, are broke.)

This is where you can turn it around. Make money a regular conversation in your house, and not a fight. Your kids need to know what is going on. And don’t worry, your friends and neighbors don’t care what you do or don’t have. They just care that you’ll offer them a slice of pizza and a beer when you ask them to move that massive TV that you really shouldn’t have bought in the first place.

In our last post, we reported that adults aren’t making the grade in their financial knowledge. Don’t let this trickle down to your kids, or their kids, and their kid’s kids. Studies have shown the skills and habits you learn as a child, stick with you into adulthood. Don’t let debt be a habit in your family.

Sit down and really talk about your budget. Show your kids what amount is coming in, and what must go out. Kids need to learn now that they can’t always get what they want…and neither can you.

Lisa and Bryan showed their teenagers that more was going out than was coming in. They talked about the difference between needs and wants.

Their kids are fully on board. Even keeping Lisa and Bryan in check when they are out and about.

“Do you really need that purse, mom? Or do you just want it?”

Raquel’s family didn’t realize why she needed those payday loans. After a good discussion, they are helping with the budget and making sure everyone knows where the money is going.

Fredica already told us her children were looking out for her. As self-described impulse buyer, her kids were already on her. “Just because you have a coupon, doesn’t mean you buy it.”

But how can we teach our kids and families about money management, when many of us are struggling ourselves?

  • Make financial literacy a priority in your household, and take it seriously.
  • Prepare a budget and stick to it.
  • Determine where you are a wasteful spender and Shut. It. Down.
  • Talk honestly about needs and wants and respect your children and other family member’s opinions too. Let them each choose a splurge item, unless it’s a trip to Hollywood for them and their five friends to celebrate turning sweet 16. Giving your children and others the power to choose will help keep them on board.
  • We’ve said it before. GET HELP! Many financial institutions like credit unions offer financial literacy assistance. Just watch this nifty interview with one of our super cool Kansas credit union financial counselors. And if your children are old enough, bring them with you! It will improve your household financial knowledge and may even strengthen your relationship with your kids.

Your financial knowledge helps you no matter where you are in life. It can help you live better and healthier, and ensure your children have a better, healthier future too.

A “C” in Financial Literacy

One room schoolhouseSchool is so lame. Having to do what teacher says, all those dumb assignments, and who looks at your grades anyway?

April is Financial Literacy month, and a recent survey shows adults give themselves a “C” or lower when it comes to their financial knowledge. Not exactly making the honor roll, are we?

Here’s what the survey revealed:

  • Forty-one percent of adults gave themselves a grade of C, D or F on their knowledge of personal finance.
  • More than half of respondents (61 percent) admitted to not having a budget. This is the highest percentage in six years.
  • About a third (34 percent) carry credit card debt month to month, and 15 percent roll over more than $2,500 in debt per month.
  • Top concerns are not enough in emergency or retirement savings.

So basically, we are AT BEST a “C” student. We don’t have a budget. We carry credit card debt and we don’t have money for emergencies or retirement. And here’s the best (worst) part: Adults are spending MORE than in previous years, with only 29 percent saying they spent less than last year.

People: Get a hold of yourself!

First, watch this:

Financial education is what this campaign is all about. Our participants are learning that with proper budgeting, mindful spending and saving, and financial organization, you can beef up savings, pay down loans, stop impulse buying….and be on your way to financial health. The result of this knowledge? Living with less stress.

Here are a few more tips:

Spend less than you earn.
Period.

Make goals.
Goals can create actions plans that help you stay on track.

Be realistic.
Start small. Eliminate one lunch out and save $10 a week. Trim $20 from your grocery bill. Then SAVE that $30 or apply it to one of your debts.

Consider your financial institution.
Kansas credit unions can save you $30,000 over your lifetime simply by using them as your primary financial institution. Most offer seminars or classes, some even have a person right on staff to help you. Credit unions are local establishments with a fierce loyalty to the their communities. Search here for a Kansas credit union, or visit asmarterchoice.org to find one nationally.

You can do it. We know you can. Make a commitment now to get control of your finances.
Download the Money Possible workbook. Call a financial counselor. Google it. Watch a video.

Strive for that “A” … that spot in the National Honor Society. Don’t you want your own “I’m an honor roll student” bumper sticker?