A “C” in Financial Literacy

School 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?

Poll results: What is Your 2014 Financial Goal?

Our informal poll results are in:

More than a quarter (27 percent) of respondents goal is to pay down credit card debt. That’s a biggie…the average household owes more than $7,000 on their cards, and 15 percent of us roll over more than $2,500 in credit card debt per month.

Twenty percent said the goal was to save for a milestone like college, a new baby or retirement. Did you know the average college graduate owes $35,000 in debt in 2013? Or that you’ll spend about $10,000 on a baby in the first year alone? Or that you’ll need eight times the amount of your ending salary to retire? Things to think about…

Only 13 percent are saving for a “big ticket item” like a house, car or much needed vacation.

This is the big one…almost half of you (40 percent) want to build your emergency savings.  You are in good company. Roughly 75 percent of Americans are living paycheck-to-paycheck, with little to no emergency savings, , according to a recent survey released by Bankrate.com.

Fifty percent of those surveyed have less than a three-month cushion and 27 percent had no savings at all. People…this is not good. All households should have at least three months of living expenses saved.

Controlling Impulse Spending.

Impulse spending will wreck your budget faster than the Ellen selfie went viral at the Academy awards.

Impulse spending (or impulse buying) is an unplanned decision to buy a product or service. Stores are notorious for placing items “just so” to increase your impulse spending.

Fredica knows that she is an impulse buyer. She knows she buys things she doesn’t need, just because it might be on sale or she has a coupon. She’s not alone.

The lure of impulse spending.
Did you know 90 percent of the time you go shopping you end up buying something that wasn’t on your list?

Yes, 90 PERCENT!

A survey showed that impulse buyers waste an average of $200 per month on items they don’t need.

But who can resist the lure of temptations like this: “Buy a bag of chips and get a jar of salsa for free.” Neither items are on your list, but hey, free salsa!

Or this: “Buy three 12 packs of soda for $12 OR one for $5.” NO ONE really “needs” soda. But here in ‘Merica, we do!

Retailers know that 88% of impulse buys are made because something is on sale. And 14% of impulse buys are food items, but something you probably didn’t need in the first place.

Impulse spending creates cluttered houses, busts our budget and packs on the pounds.

Plan to shop.
Retailers, especially grocery stores, rely on consumers to make impulse purchases. That’s why it’s super important to PLAN to shop. In fact, impulse buying increases 23% if the trip itself was unplanned!

Make a list and (this is the important part) STICK TO IT.

Planning to shop and sticking to only the items on your list can reduce impulse spending.

Take control.
We know it’s hard to control spending. Here’s our favorite ways to take three tips to help:

Give it 48 hours. If you still need that item, you can go back and get it, but only if it is in your budget. Chances are, you won’t.

Calculate how many hours you have to work to buy that item (really only works for larger purchases).

Go on a spending freeze. A spending freeze is where you don’t spend any money for a designated amount of time. Before you freak out and think you can’t do it, even a few days can help. A two-week spending freeze is common, but some people even try a month. Just Google “spending freeze” and you will find plenty of resources to get started.

Controlling your spending is hard, especially when it looks like everyone else is throwing money around like it’s the greatest thing since sliced bread. The ability to purchase things online doesn’t help either. Click, click, done! Congratulations! You just spent $78 on shoes you don’t need.

Take control now. The only person who can change your behavior is you.

Just Say No.

The word “No” kinda gets a bad rap. Parents of young children grow weary of saying it. “Just say no” was the 1980s ad campaign for the war on drugs. We feel bad sometimes when we say it; like when you are asked to do something you really don’t want to do, or don’t have the time, yet feel obligated to say yes.

Saying no is no fun.

The word yes is much more positive, like that Home Alone Macaulay Culkin fist pump YES!

But when you are talking about your finances, saying “yes” can be much worse than saying “no.”

Just ask Lisa and Bryan. They want to reduce their debt and save for retirement. They are saying “yes” to things, when they should be saying no. Especially to family and friends.

It’s hard to say no to those close to us, or even our co-workers and neighbors. But if you are trying to stick to a budget, save for retirement or whatever, “just say no.”

No to Sonic runs. No to that new movie that just opened today. No to the soda at the ball game. (By the way, if you said no to just those three things, you’d have an extra $20 to save.)

But how do you come across without sounding like a Debbie Downer or a Party Pooper?

It’s simple. Tell people you are trying to stick to a budget, save money, save for retirement, whatever. People who care about you, won’t put you through the ringer for wanting save for a rainy day.

You’ve got to stand your ground. And don’t you dare feel guilty about saying no. It’s like peer pressure for adults. It’s like keeping up with the Joneses. There will also be someone with the newest gadgets, eating at the fanciest restaurant, taking the coolest vacations. Get over it. Just say no.

Here are three ways to say no:

1. Keep it simple.
   You don’t need to explain the heck out of why you can’t (or don’t want to) go the latest flick. Just say “another time.” Or “I’m busy that night.” Even a casual “It’s not in the budget this week” should do the trick.
2. Offer something else.
   “Instead of going out to a movie, let’s rent that one we’ve been wanting to see, and have a movie night at my house.” You are still spending time with them, just in a different way.
3. Say “I don’t” instead of “I can’t.”
   “I don’t go to movies in the theater,” is different than “I can’t go to movies in the theater.” A change in terminology can be the difference between staying within your budget, and blowing it to bits.

A couple of good hardy “nos” and you’ll be a pro at it. You’ll feel better about your decision, and your budget will be saying YES!

Don’t Be Such a Waste

Don’t be such a waste. Wasteful spender that is. Financial experts estimate Americans spend 10%-15% of their income on unnecessary items. (Read: Things you don’t need!) Or things like fees or services charges that are certainly avoidable.

We asked our Money Possible participants what they found they waste money on.

Fredica brings up a common one: cell phone. She says her monthly payment could be lower.

Lisa and Bryan admit wasting money on things like a soda at the gas station, or food and drinks at sporting events.

Fredica, Lisa and Bryan are in good company.

Unnecessary bills, fees, or or simply paying for a service you don’t need is at the top of the “money down the drain” list. So are “extras” at entertainment venues, like popcorn at the movies. At $5 a bag, that’s enough to pop your wallet!

Wasteful spending items can include any or all of the following, and can really add up:

• Memberships you don’t use (gym, Sam’s club)
• Late fees (pay your bills on time!)
• ATM service charges (use your financial institution’s ATM. Credit unions have a network of surcharge free ATMS…7,000 of them! Or at least take out a big chunk of money so you don’t have to use the ATM every week)
• Services you don’t use (check your bills – don’t use call waiting on your landline anymore? Who does? Get rid of it!)
• Unlimited data on a mobile device (only text your teenage daughter? Use a limited data plan to save money)
• Junk food (eat before you go!)

Need more money wasters? How about drinks and dessert when eating out? Those alone can tack on an extra $20 on your restaurant bill…and an extra $4 in tip…so really an extra $25! Sheesh!

Here’s another, and it sounds stupid. But you can waste $100 a year on electronics that are plugged in when not in use. Just don’t pull the plug on that annoying clock that you have to set every time the electricity goes out. It’s not worth it.

And by all means, pay those dang bills on time! Get your act together, organize your household expenses and budget and never pay a late fee. It’s just money down the drain.

Need more?
Yahoo Finance: Ways to Waste Your Money

POLL: What’s Your Financial Goal?

We all have goals. Career goals. Exercise goals. Home improvement goals. Get to bed at a “reasonable hour” goals.

We also have financial goals. Pay off one credit card. Cushion an emergency savings account. Save for something big…like retirement, a house…or an 84″ HD 3D TV complete with four pairs of 3D glasses. (Which costs $39,999 at Best Buy, in case you were wondering).

We want to know. What’s your financial goal this year? And if you say to purchase a $39,999 TV, well, you made need to revisit that goal.

It’s America Saves Week!

America Saves week (February 24-March 1, 2014) is an annual event promoting good savings behavior and a chance for individuals to assess their own saving status.

Although the week focuses on saving, it’s a good reminder for you to take a long hard look at your financial plan (or lack of) and determine a game plan for you or your family.

According to a recent survey by America Saves, most Americans still face savings challenges. Only 35 percent of respondents were making “good” or ‘excellent” progress in their savings goals. That means two in three adults are making no progress or “fair” progress in their savings needs. Come on people…we need to switch those around!

Saving money is essential for your financial health. You can’t pay down debt if you don’t have any money left over at the end of the month. You can’t build up a solid cushion of money if you are constantly trying to manage your bills. It’s  like the hamster in the little hamster wheel…spinning around but not going anywhere.

Start with this post: 54 Ways to Save Money. Surely you can find something you can do…there’s more than 50 tips!

Here’s two of our favorites:

• Reduce credit card debt by $1,000. That $1,000 debt reduction will probably save you $150-200 a year, and much more if you’re paying penalty rates of 20-30%. (Read more about credit card debt and the amount of money people throw away on interest fees)
• Take the amount the item costs and divide it into your hourly wage. If it’s a $50 pair of shoes and you make $10 an hour, ask yourself, are those shoes really worth five long hours of work? It helps keep things in perspective. Maybe retail stores should start putting that information on price tags?

Credit unions are another good place to start. Many have financial counselors at your beck and call, who can put you in the driver’s seat of a good financial plan, and definitely not one that will have you running in circles. Credit unions focus on financial literacy and people, not making money. As not-for-profit organizations, any profit they make goes back to the people who use the credit union. Here is more information about credit unions.

In the meantime, stay tuned because we’ll be unveiling our participants next week.

How Your Tax Refund Can Help Your Financial Goals

Nobody likes taxes. Have you seen the new commercial for tax software or tax preparers? They make it sound all fun and easy…like some kind of party: ”You did so much crazy, awesome stuff. So, we’re pretty sure you can answer questions about those things and file your taxes on your own.” Another claims: “Get Your Billion Back!”

Well, for one thing, you won’t get a billion dollars back, and did you really do some crazy, awesome stuff?

Maybe you used to…and are thankful every day that phones with cameras and social media did not exist back then…but last year? Not so much.

Worrying about taxes is an adult thing, and definitely not a party. Taxes are that dreadful thing that rears its ugly head. Every. Single. Year.

Some people can’t wait to get that tax refund. In fact, many count on it. According to a Fidelity survey, most Americans (75% of you) will get a refund…to the tune of $2,700 (See? Definitely not a billion dollars).

The good news is that most people say they will save or pay down debt with their tax refund.

Wait…save it? Pay off some debt? Psshhh…that’s not fun at all. Sounds like something Sandra Dee would do.

In fact, 33% said they intend to pay off debts and 46% plan to use the money for some kind of savings (retirement, college, etc). Such a responsible bunch…you know the type…Teacher’s pet. Goody-two shoes. Responsible citizen.

Yes, people want to be responsible financially…no one wants to be debt. These statistics are the light at the end of the tunnel. Individuals and families want control of their financial situation. They want financial health.

Start the ball rolling with your tax refund. According to creditcard.com, the average credit card debt per U.S. adult is $4,878. With your $2,700, you could cut away good chunk of that debt…and be on your way to that billion dollars…all on your own.

Already Over Budget For the Holidays?

The holidays are upon us, and so is the season of overeating and overspending. Although the average person only gains two to five pounds during the holidays, that same person may pile on 40 percent more debt on their credit cards during that same time.

And here’s another statistic: the average consumer will spend $786 on holiday gifts this year, and 30% will spend more than $1000. Do you have an extra $700 laying around this month?

It’s a bit late to do anything about this year’s holiday spending, but let’s talk about what you can do next year. How about a Christmas Club account at your local credit union? If you start your 2014 holiday saving next month, you can save for the holidays a little at a time, which is way better than racking up your credit cards the last month of the year.

According to this article in The Wichita Eagle, Christmas Club accounts (and layaway options at retails stores) used to be popular avenues to keep holiday spending under control.

“More than four decades ago, layaway was a common method used by consumers to pay for holiday gifts. So, too, were Christmas Club savings accounts, which allowed consumers to routinely set aside a certain amount of money and, at the end of a 12-month period, withdraw the amount they had saved plus interest, then use that to pay for Christmas.”

So, to keep you in the black for next holidays season, determine your budget for the holidays, and start setting aside money monthly in January. These funds should be in addition to your regular savings goals and budget requirements.

Yes, we know it’s hard, especially when those holidays bills start rolling in. Keep in mind you may need to cut back on your spending for a few months to get yourself back on track…just like you’ll need to cut back on those holiday sweets so you can quit wearing those sweatpants.

By starting your holiday saving now, you won’t put yourself into holiday debt then and the holidays might be more enjoyable for you.

As for the overeating…well, we can’t help you with that!