The Freshman $30,000

We took an informal poll last month regarding your grade in financial literacy. The majority of US adults give themselves a C or lower in money smarts. Either smart people took our poll or you think you manage your money better than you do, because the majority of the respondents gave themselves a B. See the poll results.

In light of this being the graduation season, and the fact that we ran across a survey that said students wished they learned more financial management in school, this post will be about how kids (or their parents) can become be money smart at school.

Forget the “Freshman 15.” We need to worry about the “Freshman $30,000.” The average student graduates with close to $30,000 in debt. That’s a lot of financial weight.

Students are screaming for education in how to manage their money. Some states require a class in financial education to graduate, but many do not. And just ONE class? We all know it takes more than that to get through to a teenager!

This is where parents need to step up and teach their kids. Or find somewhere that can…like a credit union or consumer credit counseling service.

Here’s why: First-year college students required to take a financial literacy course in high school are more financially responsible than those students who didn’t take the class, a recent study found. This means they were more likely to pay credit card bills on time and less likely to go over their credit limit. Both of those add up to less debt. But just 17 states require a course. And ongoing education is critical.

Our friends at A Smarter Choice have some good tips to get students started on the right foot. Here is a scaled down version of their blog post Get Started on the Right Financial Footing.

Stay frugal. Be mindful of what you’re spending. Check with your gym, and cellphone and cable providers, to make sure you’re getting the best rates. Pack lunches from home. Have friends over for dinner and movies instead of going out.

Negotiate your pay. Starting out with a higher salary will mean higher earnings over the course of your career.

Build an emergency fund. Prepare for the unexpected by setting up an emergency savings account and have your paycheck directly deposited into that account. You should have three to six months of living expenses saved. For real.

Start saving for retirement now. If your job offers a 401(k) or similar retirement savings accounts, put money into it! Even better is if your employer offers to match a percentage of your contributions. Your 50 year-old-self will think you were super smart for doing that.

Pay down student loan debt. Know what you owe and contact your lender immediately–before the due date–if you’re going to miss a payment. Pay extra if you can.

Use credit appropriately. A strong credit history will pay off when you want to buy a house or purchase other big-ticket items (the new iPhone 6 doesn’t count). Here’s the biggest piece of advice that you don’t really want to hear: Don’t charge more than you can afford to pay off monthly! And please, pay your bill on time. Spending too much and having late payments can get you in a heap of trouble…and fast.

College students are smarter, but have more on their plate than in years past. Make financial education a requirement for them, and maybe as an adult, they’ll be shedding that $30,000 before swimsuit season.

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.

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…

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.

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!

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.

Meet the Participants

“I need to pay down loans.”
“We want to save for retirement.”
” It’s hard to control my spending.”

Sound familiar? These are the challenges facing our three Money Possible families, and the issues affecting millions of Americans who want to take control of their finances.

Each family has agreed to tell their story, and show that getting control of their money isn’t hard, it just takes dedication and a little self-control (of course, self-control is a whole other problem for us Americans…evident by our super-size nation…and we’re not just talking about food!)

Meet the participants
Raquel
Raquel is married and a mother of two young children.

In her 30s, her goal is to pay down payday loans, and learn to save.

Lisa and Bryan
In their 40s, Lisa and Bryan want to save for retirement.

They have three older children. They need to learn to say “no” and live within their means.

Fredica
A divorced mother of four in her 50s, Fredica wants to control impulse spending.

She always wants to save enough to buy a house.

Follow these Wichita area credit union members’ stories here, and every Tuesday on KAKE-TV’s (Channel 10, ABC) 4 p.m. newscast. Follow the hashtag #moneypossible.

Let’s face it…with Americans $11 trillion in debt and struggling with saving money, many of you can probably benefit from following them and learning from their successes and their challenges.

Who hasn’t had loans to pay back? Who doesn’t need to save a little (or a lot) more for retirement? And who isn’t plagued by the temptations at the grocery store?  By following Raquel, Fredica and Lisa and Bryan, they will show us that we can do it. We can destroy our debt.

This program highlights the need for consumer financial education, as well as the value of credit unions as strong financial partners. The campaign aims to give consumers tips and explain that there are resources available to those who need extra help.

Money Possible Participant Sneak Peek

Last week we posted pictures from our first video and photo shoot.

Here’s a sneak peek profile of each (we’ll reveal their headshots later):

• Single mom of three, 50-ish, administrative worker who rents a home.
• Married couple with three children, 40-ish, owns their home.
• Married mom in her 30s with two young children, works in education, renting a home.

Here is some insight into why they applied to be a Money Possible participant:

“I need to stop spending and buying. If it’s on sale, I know someone who can use it.”
We’ve all fallen victim to the merciless “sale” tactics or “I have a coupon” mentality. Stick to a list to deter impulse buying.

“I’ve tried other programs, but without talking to someone regularly, I have not stayed on track to save for retirement.”
Ah, this one is accountability. Telling someone (and it can even be your friend or neighbor) your goals and struggles can be just the thing you need to stay on track.

“I need to save so I don’t have to turn to payday loans…if I have it, I spend it, down to the cent.”
Is your cash burning a hole in your pocket? Gone shopping “just to see” if you need anything? Saving money is hard, and takes dedication and self-control. Set up an automatic transfer so you don’t “see” how much is being taken out of your account, or give it to a trusted friend for safe keeping.

Do these scenarios sound familiar? They should. Money management is at the top of  “things I need to do” for the majority of Americans. And it’s not something that can be delegated to the “honey-do” list.

Remember, you’ll be able to follow our participants by watching weekly television segments on KAKE-TV…we’ll post the television schedule soon.