Category: Behavioral Finance

QoD: What's the average number of times that a person wears a specific piece of clothing?

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Sep 09, 2019
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Question of the Day, Budgeting, Behavioral Finance
Answer: 7 Questions: How often have you worn the outfit that you are wearing today?  One writer thinks about their clothing cost by analyzing their CPW (cost per wear calculated by dividing the cost by number of times that an item is worn). What do you think the CPW is for your favorite pair of shoes/sneakers? favorite jeans? What do you think social media's impact has been on clothing sales? Explain. Click here for the ready-to-go slides for this Question of the Day that you can use in...

Question of the Day: When a couple takes out a loan, which credit score does the lender use?

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Sep 03, 2019
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Question of the Day, Behavioral Finance, Credit Scores, Mortgages
Answer: The partner with the lower score Questions: How do you think having different credit scores can affect a relationship?  How would you feel… being the only spouse listed on the mortgage (the home loan) because of a high credit score being the spouse left off the mortgage because of a low credit score Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the numbers (Zillow):  When applying...

Throwback Tuesday QoD: What percent of 13-17 year olds have a savings account?

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Sep 02, 2019
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Savings, Question of the Day, Research, Current Events, Behavioral Finance
Answer: 54% Questions: Do you have a savings account? If not, why not? If so, what age did you open on and what motivated you to open it? Do you have any savings goals?  Do you find it easy/difficult to save money? Explain.  Here's the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the numbers (from Ipsos): To help with saving their money, a majority (54%) of Gen Zs have a savings account. Among those who have a savings...

QoD: What are adults least comfortable doing? a) Collecting on debts from friends or family b) Returning an item for a refund c) Correcting an overcharge on a bill

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Aug 26, 2019
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Question of the Day, Behavioral Finance
Answer: Collecting on debts from friends or family Questions: Have you ever lent money to a friend or family member? Did you find it difficult to ask for your money back?  Why do you think it's so difficult for people to collect on their debts from people they know?  What do you think are reasons that people do not return items for a refund or correct an overcharge on a bill?  Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom....

QoD: Savers in England received information about rival banks with higher interest rates. What percent were prepared to switch banks?

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Aug 25, 2019
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Question of the Day, Savings, Checking Accounts, Behavioral Finance
Answer: 3% Questions: If you could make an extra $100 in extra interest by switching banks would you do it? How about $20 in extra interest?  Would the amount of time required to open a new bank account impact your willingness to switch banks? Explain.  Why do you think so few savers were ready to switch banks despite a potential benefit of $150 in the first year? Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the...

Question of the Day: What is the leading cause of stress for Gen-Z consumers (18-21 years old)?

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Aug 14, 2019
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Question of the Day, Behavioral Finance
Answer: Money  Questions: What do you think are the main sources of money stress for 18-21 year olds?  Why do you think 18-21 year olds are more stressed about money than adults?  How do you think learning about money in this course will help reduce your stress?  Have you ever been stressed out about money? Explain.  Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the numbers (from American Psychological...

FIRST Question of the Day for 2019-20: Which would you choose?

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Aug 11, 2019
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Behavioral Finance, Question of the Day
#1: Which would you choose?    2: Which would you choose?  Teacher instructions: Only show 1/2 the class Question #1 and jot down the results (the percentage who chose small, the percentage who chose large) Show the other 1/2 of the class Question #2 and jot down the results (percentage who chose small, percentage who chose medium, percentage who chose large)  Compare the results to see if students who answered Question #2 purchased more of the LARGE buckets...

NGPF Podcast: Andrei Smith discusses the car industry

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Aug 09, 2019
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Purchase Decisions, Podcasts, Budgeting, Behavioral Finance
I had Andrei Smith back on the podcast recently where we talked about what's ailing the car industry, the promise of autonomous and electric vehicles and the owning vs. leasing debate. He also shares his observations on the current zeitgeist in Silicon Valley when it comes to status symbols and car buying behaviors. Enjoy! Details: 0:00~1:14 Introduction 1:14~2:04 Current state of car dealerships 2:04~11:14 The slowdown in car sales  11:14~19:08 Introduction of electric car sales...

Reading List for July 26-28

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Jul 26, 2019
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Financial Literacy, Career, Behavioral Finance, Credit Cards, Paying for College, Current Events
Financial Literacy Dr. Barbara O’Neil of Rutgers, known to NGPF regulars for her tireless efforts in financial education, read and digested the Government’s report on Financial Education in the news recently, and offers her key take-aways. (MoneyTalk) A study by the University of Arizona demonstrates that “emerging adults” (college years plus five post college years) with financial knowledge are more successful at “adulting,” including more successful...

Reading List for July 19-21

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Jul 19, 2019
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Financial Literacy, Cryptocurrencies, Economics, Investing, Paying for College, Behavioral Finance
Financial Literacy A Forbes article last week tries to explain the drop in financial literacy across the board as revealed in the FINRA 2018 National Study of Financial Capability. Economics The St. Louis Fed provides a comprehensive explanation of the Federal Reserve’s dual mandate, and specifically explains the two percent inflation target. (Medium) Cryptocurrency The proposed Facebook cryptocurrency Libra faces was the subject of congressional hearings this week....

The Financial Behaviors Encouraged By Research Findings

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Jul 16, 2019
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Behavioral Finance
This recent research out of UCLA provides a useful reminder of the importance of behaviors (and habits) when it comes to financial capability which I have written about here, here and here.  Here's a few of the financial behaviors which often have an emotional component to them also: Paying down loans with lower balances (vs. higher interest rate loans): "Research shows that consumers often have better success if they repay smaller debts first. The psychological lift of being able to pay...

Activity idea: Have you been persuaded by these marketing techniques?

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Jul 14, 2019
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Behavioral Finance
Enjoyed reading this article from Jim Wasserman (he's on the NGPF podcast here) which highlights 20 ways that marketers nudge us to make decisions to purchase a given product.  See if you can match up these terms with the resources below: Bandwagon appeal (aka FOMO, fear of missing out) Bundling Flattery Freemium Aspirational buying After completing the exercise, answer the following: Why do you think these techniques are effective?  Which of the five listed above do you see most...

Reading List for 4th of July Weekend

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Jul 04, 2019
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Personal Finance, Behavioral Finance, Economics, Investing, Credit Cards, Employment
Happy 4th of July!!  In case you aren't attending a cookout or don't like fireworks, you can get a jump on the weekend reading list! Personal Finance From Investopedia – how to “Declare you own Financial Independence.” Michelle Singletary offers some sage advice for how to handle a delicat situation—when a friend or loved one in financial dire straits asks to move in. (WAPO) Cincinnati’s Julie Heath compares Ohio to the National results from the 2018 Financial...

NGPF Podcast: Doug Lynam Describes His Transition from Monk to Money Manager

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Jun 07, 2019
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Investing, Podcasts, Behavioral Finance
Monk, personal finance educator, Marine and financial advisor. That's just part of Doug Lynam's CV which makes for a fascinating podcast. Doug shares how each of these experiences has shaped him and ultimately led to his current role as money manager. You will also learn about the motivation and key insights from his current book, From Monk to Money Manager. Enjoy!   0:00~1:12 Introduction 1:12~6:46 Early experiences with money 6:46~9:27 First job and lessons learned 9:27~15:14...

QoD: Which of the following factors has the MOST negative influence on money habits: family, friends or social media?

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Jun 05, 2019
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Question of the Day, Behavioral Finance
Answer: Social Media.  Questions: Who has had the most positive influence on your money habits? Explain. What are some examples of how social media can lead to bad money habits? Explain a situation where a friend may have had a negative influence on how you manage your money? Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom. Behind the numbers (Schwab Modern Wealth Report): Includes many interesting insights, including: Americans...