Throwback Tuesday QoD: How much will consumers pay in interest to credit card companies in 2019?
Answer: $143 billion
Average credit card debt of $830 billion (Experian study, 2019) multiplied by an average credit card interest rate of 17.27% (creditcards.com)
Questions:
Why do you think that so many Americans have credit card debt, meaning they don’t pay the full balance on their credit card statements every month?
Does credit card debt carry a high or low interest rate?
What ideas do you have on how you can avoid getting into credit card debt where you can't pay your balance off...
Chart of the Week: How does net worth vary by age?
Net Worth is an important concept for your students to grasp. It is basically calculated as assets (think savings accounts, investment accounts, a home, a car) minus liabilities (car loan, mortgage, credit card debt).
This chart from Flowing Data introduces this concept of net worth and shows how it varies by age:
Questions:
What are examples of financial assets?
When does debt (red bars) hit its peak? Can you explain why?
When do assets peak (green bars) for individuals? Can...
QoD: You're new to credit and miss a payment on your credit card. How much will you credit score decline?
Answer: 131 points (from 599 to 468)
Explanation: Your score sank 131 points. As someone who is new to credit, you have the most to lose from a missed payment. This mistake will move you from Fair to Poor and make future credit more costly or more difficult to obtain.
Questions:
Why do you think a late payment has such a big impact on someone who is new to credit?
What do you think are the reasons that people make late payments on their credit card? Identify at least 3 reasons.
What are...
QoD: How many years has the typical American homeowner been in their current home?
By Tim Ranzetta
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Nov 06, 2019
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Economics, Question of the Day, Budgeting, Purchase Decisions, Research, Mortgages
This is a good one for Economics class as it's a demonstration of supply/demand factors in the housing market. Given that the trend has been for homeowners to stay in their houses for longer periods of time, the supply of houses for sale (inventory) goes down and if new construction doesn't close that supply gap then there's a supply/demand imbalance. You can guess what happens next.
Answer: 13 years
Here's a chart showing the regions where homeowners have been in their homes the longest,...
QoD: Which mutual funds have more investor dollars: actively managed funds or index funds?
By Tim Ranzetta
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Oct 20, 2019
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Question of the Day, Investing, Research, Index Funds, Mutual Funds
This question should be asked as part of your investing unit as it requires some prior knowledge.
Answer: Index Funds
Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.
Questions:
If you saw an advertisement for a mutual fund that consistently “beats the market” (pick stocks that do better than the overall market), what questions would you ask?
90% of mutual funds that are active and trying to “beat the...
QoD: Order these based on which are most to least important to millennials: Instagram likes, credit scores, YouTube followers.
Hat tip to Beth Tallman for sharing this press release that led to this question of the day.
Answer:
Credit Scores (59%)
Instagram followers (48%)
YouTube followers (40%)
Here's the complete results:
Questions:
Why is it important to increase your credit score?
Looking at the list in the chart above, which of these ratings/scores will have a financial impact?
Why do you think that so many people would place higher value on increasing their social media likes...
QoD: Coke vs. Pepsi: Which company's stock has performed better over the past five years?
Answer: Pepsi
Questions
What factors do you think contribute to the very different market performance of these companies?
Which products do you personally prefer? Would you make an investment decision based on your personal product preference?
Pepsi also has diversified into the snack food business and owns Doritos, Cheetos and Sun Chips while Coke has diversified into the coffee business. Knowing this, which company do you think has better long-term prospects? Explain.
Here's the...
QoD: To tip or not to tip: What percent of people tip at coffee shops?
I love this question because of the prevalence of these touch screens that get turned toward the customer at time of purchase. Do you feel that nudge...?
Answer: 48.5% (median tip is 17% or about $1 tip on a $5 latte)
Questions:
Do you leave a tip at your local coffee shop/cafe? If so, how much do you normally tip?
Is your tipping behavior based on the service you receive or do you have a consistent policy?
Does the presence of a touch screen where the people behind you in line can see...
QoD: What's the average age of the founders of the fastest growing start-ups (new companies)?
Answer: 45
Questions:
Does this answer surprise you? Why?
Who are some of the young founders that you have head of? What companies did they start?
What do you think are the advantages of starting a company when you are middle aged? when you are young?
Would you like to start your own business someday? At what age?
Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.
Behind the numbers (from American Economic Review):
Many...
QoD: Can you name ONE of the FIVE most impactful pieces of financial advice that millennials have received?
By Tim Ranzetta
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Oct 07, 2019
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Question of the Day, Personal Finance, Budgeting, Savings, Research
Questions:
Create a similar list with students in your classroom in answer to this question "What is the best financial advice that you have received from family members?"
What does the phrase "Don't live beyond your means" mean to you? Can you give some examples of people "living beyond their means?"
Why do you think that building an emergency fund has been such useful advice to millennials.
The advice listed above seems pretty "common sense." Why do you think that many people...
Interactive Monday: What are the trends with single-family homes?
Have your students explore this interactive from the Census Bureau to learn more about the characteristics of single-family homes built and sold in 2018. Putting the cursor over the yellow circle and blue squares in the interactive reveal information about the specific feature in the house. Lots of opportunities for math teachers teaching percents with this interactive as students can calculate how prevalent each home feature is.
Questions:
What was the median square footage for a new...
QoD: For credit card users who have called customer service,._____ in 10 got a fee waived, ______ in 10 got a lower interest rate and _____ in 10 got a higher credit limit.
Sometimes it just takes a little initiative to save money:)
Answer;
6 in 10 have gotten a fee waived before, while 3 in 10 have received a lower APR and 9 in 10 have been granted a higher credit limit.”
Questions
Do you feel comfortable calling customer service when you have an issue with a company?
Does seeing this information about how customers save money by calling customer service make a difference in your answer to #1?
Why do you think that credit card companies are so willing to...
QoD: How much free financial aid is lost to families who do not file the FAFSA?
This is an update to a QoD from 2017. Remember that students and their families can file the FAFSA starting today, October 1st.
Answer: $2.6 billion
FAFSA Explainer Video
Questions:
In your own words, what is the FAFSA?
Why do you think it's important to file the FAFSA?
If you are planning to go to college, when do you think the best time is to complete the FAFSA?
Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.
Behind the numbers...
QoD: Rank order these payment types from most to least used by adults: Cash, Credit Card, Debit Card
By Tim Ranzetta
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Sep 29, 2019
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Question of the Day, Payment Types, Debit Cards, Credit Cards, Research
Thanks to Julius Prezelski for pitching this idea and pointing out a new research study from the Federal Reserve.
Answer:
Debit cards 28%
Cash 26%
Credit cards 23%
Questions:
Does this match your experience?
What purchases are you most likely to use cash? use debit cards?
Do you think these answers vary based on your age? If you polled your classmates, what do you think the answer would be?
Click here for the ready-to-go slides for this Question of the Day that you...
Question: How many times does a song need to stream on Spotify for an artist to earn $1?
Answer: 229 times
Here are the figures for the top music sites:
Questions:
Given their average payout for stream of $0.004 per song for Spotify, how many music streams would you have to listen to in order to cover a $9.95 monthly subscription?
Why do you think that the streaming services have such different payouts per stream?
Your friend says "I can make a good living just putting my music up on YouTube." Agree or disagree with him using the data provided above.
Do you...
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