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4 Things Every Middle Schooler Should Know About Finances

Fri, 10 May 2013 21:29:25 GMT

Have you had "The Talk” with your child? No, not the birds and bees talk. Or the "this is your brain on drugs” talk. The "money talk.”

Nearly half of Americans learn about personal finance primarily from their parents or at home, reports the 2012 Consumer Financial Literacy Survey. And studies show that repeated early exposure to financial education can increase the likelihood that students will pursue more financial education as time goes on.

But many parents still aren’t teaching these lessons. A new report from the Department of Education shows no improvement in high school seniors’ economic knowledge from six years ago. Other reports indicate 38% of high school seniors say that they are unsure or unprepared to manage their own banking and personal finances and 50% are unsure of how to use a credit card effectively.

Kids should be learning these lessons before high school. Even young children can grasp simple financial lessons. Middle school is a great time to teach money management. This is about the time youth start taking responsibility for their own money as they are starting to have regular jobs like babysitting or mowing lawns.

So, what should a middle school student know?

How to calculate the best deal.
We’ve all seen the "save $1 on each if you buy three deal” or "buy 2 get 1 free sale.” But which is really the best deal? A middle school student should be able to figure out which will save the most money, and how much. Teach this when you are out shopping with them. Have them calculate sales and discounts and tell you how which promotion is the best financially.

How to record and analyze expenses.
A simple spreadsheet, either electronic like an excel spreadsheet or good old fashioned pencil and paper, works best for this group. Add up your student’s monthly income and expenses. If your student’s expenses are more than their income, find ways to cut back.

Difference between fixed and variable expenses.
Students should understand there are some expenses are fixed, which means they will not change month to month, like school lunches or online game memberships, and some expenses that are variable and will change. This helps them recognize that variable expenses can be reduced or cut out altogether if they are exceeding their monthly income levels.

Differentiate between a debit card and a credit card.
Students should know that a debit card is money you have. It is deducted from an account at your financial institution. If you don’t have money in the account, you can’t use your debit card. A credit card is used to buy things now and pay for them later (with interest!). If you don’t pay your monthly bill, you could incur fees.

Parents can have the most influence over their children when it comes to developing positive financial attitudes and behaviors, even more than what they learn in school or from their friends.

Use everyday, real situations to instill good financial intentions. Teach at the grocery store. Teach during a commercial advertising a low loan rate. Teach when the student gets their first paycheck, or even, when you get paid. Show them the household budget and explain where the household money goes. Learning together with your child is the best way to encourage fiscal fitness.

Shopping For a Mortgage? Do Your Homework, Ask Questions and Compare Lenders

Fri, 25 Jan 2013 17:18:55 GMT

Spring marks resurgence in the local real estate market, as more homes are available for sale during spring and early summer than at any other time of year. But many homebuyers face challenges when securing a mortgage, according to the Kansas Credit Union Association.

With more restrictive lending qualifications, a broad selection of loan products, fluctuating interest rates, and various lenders to shop and compare, consumers quickly learn it takes work to find the right mortgage.

"Despite the belief that loans today are more difficult to obtain, there are institutions willing and able to lend to consumers,” said Marla Marsh, President/CEO of the KCUA, the state organization representing 101 credit unions across Kansas. "Home buyers just need to know where to look and what questions to ask.”

KCUA suggests the following tips for consumers shopping for a real estate loan:

Determine how much house you can afford.
Set realistic goals by reviewing your budget and checking your credit report for accuracy. Those having less debt and stronger credit scores will qualify for higher loan amounts and lower interest rates. Also, factor in costs beyond your monthly mortgage payment -- taxes, insurance, utilities and maintenance expenses can add hundreds to your monthly budget.

Shop and compare your options.
Credit unions, banks, thrifts and mortgage brokers can be good sources for securing your mortgage -- check with several of them. Ask for information on the same loan amount, term and type to ensure a fair comparison.

Rates change frequently in today’s environment, so check back with potential lenders often, contacting each of them the same day if possible.

Educate yourself on pricing and fees, risks and benefits.
Ask questions about rates and fees -- they will differ among lenders and can dramatically impact the final cost of your mortgage. Some loans offer more flexible terms but charge higher settlement fees or penalties for early pay-offs.

A variety of different loan types exist, such as fixed-rate, adjustable-rate, and jumbos; and each comes with different risks and benefits. Understand the options available and which one best suits your needs.

Last year, consumers turned to Kansas credit unions for $377 million in new first mortgage loans, and currently, these credit unions provide nearly $625 million of the state’s outstanding home mortgages.

Future generations will be better off financially, but money management skills start now

Thu, 10 Jan 2013 17:23:18 GMT

In a recent TIME.com article, Federal Reserve Chairman Ben Bernanke said kids today will be better off financially than their parents, if they take personal responsibility and become more financially astute. If they don’t, they will most likely face challenges as they grow older.

Bernanke goes on to say that "financial education is a ‘lifelong undertaking.’” This is so true. The ability to make sound financial decisions is an advantage no matter what stage of life you are in, and it is just as important as learning basic academic skills like reading and math. Because financial products and your financial needs change, you must continue to build on these basic skills throughout your life.

Teaching students to become money smart consumers is essential in this economic climate. Kids should learn basic concepts like budgeting and saving, plus more involved financial concepts like evaluating loans, credit report information and mortgage issues because they will use these skills in everyday life.

What is promising is that several Kansas school districts have made financial literacy a requirement for graduation, indicating education institutions recognize money management is crucial for students to learn.

Local and state organizations also recognize the importance of financial literacy. The Kansas State Treasurer’s Office partners with Kansas credit unions to offer Money$mart Camps geared towards middle school students, and the Save@School program targets elementary school children. These programs and others reach nearly 6,000 students in Kansas each year.

Other organizations and financial institutions offering financial literacy training, seminars and workshops, all which have a positive impact on our kids’ financial lives.

But it may not be enough.

Recent surveys and statistics regarding consumer financial health are grim.

A recent report by the Corporation for Enterprise Development found 43% of US households are one crisis away from living in poverty. A growing number of families have no savings to help them through a job loss or medical emergency, and only 30% of Americans save their money.
A Consumer Federation of America and Certified Financial Planner Board of Standards, Inc. survey found 38% of those surveyed said they live paycheck to paycheck and less than 30% indicated they felt comfortable financially.
A JumpStart Coalition report found that when tested on money management knowledge, high school students answered less than 50% of money management questions correctly.

And let’s not forget the average $20,000 debt college students are left with when they graduate.

How can we teach our children when we, as adults are struggling?

The first step is to take financial literacy seriously. Make it a priority in your household.

Prepare a budget and stick to it.

Start slowly. Take one concept at a time. A complete overhaul of your finances can seem daunting, but if you break it down into little pieces, you will you learn more and become comfortable with your money management skills.

Get help if you need it. Consumer Credit Counseling might be a good place to start. Many financial institutions like credit unions and community banks offer financial literacy assistance.

If your children are old enough, learn together. It will improve your household financial knowledge and may even strengthen your relationship with your kids. If you are a business owner, and an employee is struggling financially, help them find resources to get them back on track. Not only will you help them improve their household finances, but it will ease stress and make them a more productive and healthier worker.

Teach.
If your finances are healthy and you have a good understanding of money management, start teaching! Young children can grasp simple concepts like money buys things, and you earn money by working. Always involve your children and show them how much things cost, and how that latest gadget or eating out affects your household budget.

Financial literacy is not a "learn it and forget it” skill. What you learn about budgeting, saving or retirement can build and complement your financial health.

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.

Seven Tips to Safe Online Shopping During the Holidays

Thu, 29 Nov 2012 17:29:47 GMT

These days, you have to keep track of more than just your wallet during the holidays. According to the National Retail Federation, more than half of gift-givers will shop online.

The Kansas Credit Union Association offers these seven tips for online holiday shopping.

Use strong passwords.
The most common passwords are password, abc123 and 123456. If you are using any of these passwords, change them. Use letters, numbers and symbols and more than six characters. The time it takes for a hacker’s computer to randomly guess a six-letter password using lowercase letters only is 10 minutes. An eight-digit password with upper and lower case letters, symbols and numbers would take a hacker 463 years to crack. The more letters, numbers and symbols used in a password, the stronger it is…and the better protected you are.

Shop on trusted networks.
It’s probably not safe to make an online purchase on a free, public wi-fi network. Shop using your own wireless network.

Make sure your security software is up to date.
We all have security software installed on your computers. Check your anti-virus software, anti-spyware software and firewalls to make sure you are using the latest version…on all your desktops and laptops.
Secure your browser.

Before entering personal information, ensure your browser is locked. The URL should start with "https.” The "s” means it’s secure. In addition, look for the lock icon located in the window of the browser and not on the page itself. If you are using Internet Explorer the lock icon will appear at the top of your browser bar, and on Firefox, it appears at the bottom of the browser.

Avoid pop-up screens during online shopping.
Hackers and identity thieves can develop pop up screens to steal your information. Legitimate shopping sites will never ask you to enter personal or financial information on a pop up screen.

Use credit cards, not debit cards.
If a hacker or phisher obtains your debit card number, they may gain access to your checking and savings accounts. A debit card does not offer the same protection as a credit card.

Be wary of scams.
Phishing scams (using text messages or email) are on the rise. Never respond to an email or text message that seems fishy. Be a cautious buyer. If a deal seems too good to be true, it probably is. And while a legitimate business will need credit card information to complete your purchase, a business should never ask for your social security number or driver’s license number.

5 Four-Letter Words to Help You Save Money

Fri, 9 Nov 2012 19:00:47 GMT

A recent report by the Corporation for Enterprise Development found 43% of US households are one crisis away from living in poverty. A growing number of families have no savings to help them through a job loss or medical emergency, which can be detrimental to a families’ financial situation. Only 30% of Americans save their money, and even more live paycheck to paycheck. It’s time to get serious about saving.

The Kansas Credit Union Association has gathered five four-letter words to know to help you save and build a financial cushion for your household.

NEED
Do you NEED it? Or do you want it? Do you need a 65” flat screen TV? Or will a smaller television do just fine? Do you even need a new TV, or did your neighbor just get one and now you feel you must "keep up with the Joneses?” Know the difference between need and want.

SAVE
The rule of thumb is to have enough money in savings that you could live for three months. Six months is better. But don’t let that looming goal scare you. Even saving just a little is better than not saving at all. SAVE that pocket change in a jar, and at the end of six months see how much you have. Can you save $50 per month? Set up an automatic withdrawal with your financial institution and you won’t even miss it. At the end of the year you’ll have an extra $600.

FEES
Cell phone fees. Cable fees. Late fees. Bank fees. Hidden fees. Get a handle on the FEES you are charged each month. Review your bills. See a "fee” that you don’t know what it’s for? Call the provider and ask for an explanation. It might be a mistake, or you might be able to get it removed from future billings. Is your financial institution charging fees you don’t agree with? Consider switching to a credit union or online bank with fewer or no fees. Remember, even small fees add up over time.

KNOW
How much do you spend on food? How much is your mortgage or rent? How much do you spend on utilities each month? What is your monthly take home pay? KNOW how much your bills are, how much you bring in each month and how much your necessities cost. Make a budget and adjust your spending to accommodate it. What should you do with any money you have left over? Save it.

HELP
It’s hard to save. But it’s easy to ask for HELP. If you need additional guidance on how much to save, tips on saving or someone to help you navigate it all, get help! Some financial institutions like credit unions offer financial literacy courses or consider contacting an organization like Consumer Credit Counseling Service.

Tips for Switching Financial Institutions

Sat, 8 Sep 2012 19:05:11 GMT

A recent poll by the Consumers Union shows one in five consumers considered moving their money to another financial institution, citing fee increases, better rates at a different financial institution and poor service for the top reasons for wanting to switch financial institutions.

But most did not make the switch because they said it was too complicated and time consuming.

The Kansas Credit Union Association offers these tips to help ease the burden of switching financial institutions.

Find a new financial institution.
Ask your friends and family for banking recommendations. Search for a Kansas credit union or check asmarterchoice.org for a local credit union near you. Findabetterbank.com also lists banks and credit unions.

Download a switch kit.
Ask your new financial institution if they have a switch kit. Many do and offer consumer help in making the switch. A switch kit guides you through the process of switching financial institutions, helps you gather and organize all the pertinent information you will need to close your account, and open your new one.

Research products and services.
Make sure your new financial institution has all the products and services you need or want. How much is a checking account? How much is the minimum balance you must keep in your accounts? Are there credit card and ATM options? What about online or mobile banking?

Open your new account BEFORE you close your old one.
Open your new account, before you close your old account. Make sure you have your credit and debit cards and new checks. Ensure your account is fully functional before closing your other account.

Set up direct deposit and switch automatic payment options.
Setting up direct deposit is an easy process. Just make sure you have your new financial institution’s routing number and your new account number. Your new institution can help you with this direct deposit process.

Do not forget to switch your automatic payment options to your new financial institution. This includes mortgage payments, utility bills or automatic transfers from your checking account to another account. If you close your old account before doing this, you might miss important deadlines and be slapped with additional fees.

Close your account.
Once your new account is functional, and all your outstanding withdrawals have been cleared, it is safe to close your old account.

Are You Fiscally Fit?

Wed, 9 May 2012 19:08:47 GMT

One of the most common goals of a new year is to get physically fit, lose weight or to become healthier. But have you ever thought about your fiscal health?

Along with being physically fit, being a fiscally fit person can reduce stress, increase your standard of living, make you happier and help you live longer.

According to a recent survey, 19% of consumers currently do not monitor their money, double what was reported just one year ago. Another survey reports that one in five Americans live paycheck to paycheck and 30% of people have no savings funds. It’s time to get fiscally fit.

The Kansas Credit Union Association offers these tip to get you on your way to becoming fiscally fit.
Make goals, not resolutions.

Your resolution may be to get out of debt, grow your savings or stick to a monthly budget. While these are excellent resolutions, each requires weekly or monthly goals that describes how you will obtain the resolution. Outlining your goals creates an action plan that can help you stay on track and achieve those resolutions.

Be realistic.
People whose goal is to lose weight don’t start off losing 20 pounds the first week. It’s unrealistic and unhealthy. Same goes for your budget. Start small. Can you eliminate one lunch out and save $10 a week? Can you trim $20 from your grocery bill?

Re-invest your money.
Now that you are saving $10 a week, use that $10 to pay off other debt, save it, or start an emergency fund (if you don’t already have one).

Spend less than you earn.
Sounds simple, but it is hard work. If you are trying to lose weight, you are told to burn more calories than you take in. Becoming fiscally fit is the opposite. You want to burn LESS than you bring in. Or in simpler terms, spend less than you earn.

Shop for the best price.
Take a hard look at your financial institution. Are you getting the lowest rates possible on a loan? Are you happy with the service? Check around and make a switch if necessary. Do the same for your credit cards. You might find a card with a lower rate, saving you a few dollars each month.

Involve your children.
A Capital One survey shows more than half of high school graduating seniors lack confidence in money management. Teach them about your own family budget. Not only will you be helping them prepare for their future, but they’ll gain a better understanding of where your hard earned money goes.

Remember, becoming fiscally fit is a long term commitment, just as becoming healthier takes time and effort. By making a few changes to your financial plan, you will be well on your way to having a stronger, healthier financial future.