Date Filter: 2014/10/

Question of the Day: What Is The Cost Of Having Bad Credit?

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Oct 31, 2014
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Credit Scores, Question of the Day, Personal Finance
Yesterday, I tackled the issue of how long negative items remain on your credit report.  Today, courtesy of Credit.com, we have an answer to the question of how much bad credit will cost you over a lifetime.  We know that a poor credit history (which translates into a low credit score) will make it difficult to borrow as many lenders will deny applicants if they don’t meet their standards.  For those with poor credit, who are able to borrow, there is a premium that they pay which is a...

What Are Your Lemonade Stand Lessons?

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Oct 30, 2014
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Budgeting, Lesson Idea, Savings
This BBC article got me thinking about the important lessons we learn about money and work before we ever get to high school.  I found myself nodding my head in agreement over and over again as I worked my way though the article and reflected on my own childhood experiences as a dog-walker, paper boy and snow shoveler.  I thought it would be interesting to ask students to reflect on their own experiences. Here were three principles that I learned early and are incredibly important to develop...

What Advice Does the NBA Provide To Its Well-Paid Rookies?

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Oct 30, 2014
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Budgeting, Personal Finance, Savings, Current Events
I thought this article might appeal to those students who idolize the NBA and their stars.  This interview with the NBA’s SVP of Player Development provides a behind the scenes look at the financial planning advice that the NBA provides their rookies.  Ask your students what lessons they can take away from this interview (other than NBA players are very well paid!): Here are a few nuggets: Importance of budgeting:  “We know it’s critical to have a budget so one of the essential tips...

Question of the Day: How Long Do Negative Items Stay on Your Credit Report?

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Oct 30, 2014
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Credit Scores, Question of the Day, Research
Credit reports can be a challenging concept to present to high school students since it may not seem relevant to many of them who have thin or non-existent credit files today.  I like the idea of the “permanent record” that Mrs. McLaughlin would scare us about in 2nd grade.  Whenever we misbehaved (OK, I did get in a little trouble), she would warn us that our poor conduct would be “going on our permanent record.”  It took us until about 4th or 5th grade to realize that future...

NGPF Featured Lesson: Your Health: Insurance & Other Costs

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Oct 29, 2014
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Budgeting, Lesson Idea, Current Events, Insurance
From Jessica Endlich Winkler: We did it — we undertook the task of designing a budgeting lesson around the costs of maintaining your health. In some ways, it’s a pretty straightforward — will students choose to join a gym or will they find a way to workout for free? But you can’t do a health budget without talking insurance, and the Affordable Care Act is still so new, fluid, and misunderstood that finding good web resources for this lesson was a real challenge. Here are some of my...

Question of the Day: What Financial Fears Do Adults Have?

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Oct 29, 2014
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Question of the Day, Research, Credit Cards, Savings, Financial Literacy
This can be an instructive discussion as it helps students think about their futures and behaviors/habits that they can develop today to lessen the probability that they will have the same fears as adults. From National Foundation for Credit Counseling eighth-annual Financial Literacy Survey; question asked “Which of the following areas of personal finance currently worries you most?”:   #1 (a tie at 16%):  Not enough rainy day savings for an emergency AND Retiring without enough money...

Chart of the Week: What Happens When the Federal Reserve Keeps Interest Rates Low?

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Oct 29, 2014
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Policy, Question of the Day, Investing, Stocks, Current Events, Chart of the Week
This chart goes well with an earlier post about how interest rates impact the economy.  The Federal Reserve announced today that they will be ending their Quantitative Easing program(technical term for the Federal Reserve keeping interest rates low by purchasing bonds) after almost five years of intervention.  One major beneficiary of this policy:  the stock market! A few ideas to engage your students:   Have them calculate the increase in the S&P500 (see chart below) since QE began in...

Checking Account Trends

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Oct 29, 2014
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Personal Finance, Checking Accounts, Debit Cards, Current Events
Here’s what new in the last week: Bank accounts tend to be sticky.  According to JD Power and Associates only 5% of customers changed banks in the last 12 months (Money) Money’s 2014 Best Banks survey finds midsize and online banks offer most compelling checking products (Money) Their Bank Matchmaker Tool provides useful way to engage students and have them think critically about the factors that matter in selecting a bank The Consumer Financial Protection Board concerned about...

Investing Trends: Here Come the Robo-Advisors!

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Oct 29, 2014
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Behavioral Finance, Investing, Stocks, New Products, Current Events
With everything else moving online at an ever increasing clip, it seems only natural that investment advice should move in that direction also.  You will hear more about “robo-advisors” (detailed description in this Barron’s article) in the months and years ahead.  While the term may be offputting to some, we may come to realize that investment decisions made by a robot (with no emotions) might actually provide us with better outcomes.. This concept of the “robo-advisor” is...

NGPF Featured Lesson: Plan a Food Budget

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Oct 27, 2014
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Budgeting
From Jessica Endlich Winkler, our curriculum guru: As students complete the NGPF Salary Based Budgeting activity, they often indicate they’re most surprised by how much food can cost them as a monthly expense. While there are countless blogs, Pinterest pages, and television shows devoted to extreme couponing, cutting out your daily latte, and the like, we used this lesson to present a balanced look at realistic ways to budget for food. Lesson 6.4 is Plan a Food Budget, and it features a...

When It Comes to Credit Card Fraud, Don’t Leave Your Cards in An Unlocked Car!

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Oct 27, 2014
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Credit Cards, Identity Theft
This advice struck me as I skimmed through credit card stories over the past week. With all the focus on online fraud, we sometimes forget to state the obvious:  don’t leave anything of value in an unlocked (or locked, for that matter) car.  Oh, and if your credit cards go missing, be sure to contact the credit card company immediately to let them know of the theft.  Here is a sampling: Boise Weekly:  “The cards were stolen during burglaries of opportunity. The first theft occurred...

Question of the Day: What Happens When Interest Rates Go Up?

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Oct 27, 2014
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Question of the Day, Personal Finance, Savings, Financial Literacy, Stocks, Current Events
The term “interest rate” gets bandied about quite often in the financial media and yet few take a moment to think about how interest rates impact business/markets/consumers.  Challenge your students to come up with at least 11 ways that interest rates filter through the economy and see how the do! This list below comes courtesy of John Lancaster, who has written How To Speak Money, a book that deciphers financial lexicon: The reason interest rates matter so much is because the interest...

Behavioral Finance and Investing in the News

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Oct 24, 2014
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Behavioral Finance, Research, Investing, Stocks, Current Events
Interesting reads to help your students understand the importance of understanding what drives our investing behaviors: What are the ten commandments of investor behavior (ThinkAdvisor): “Something similar is afoot in financial services today,” said Crosby, who is also president of IncBlot Behavioral Finance, during a Wednesday session at FSI’s Financial Advisor Summit. “We now know because of behavioral finance in the last 40 or 50 years of research, we know that some of the greatest...

This Week in Credit Cards

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Oct 24, 2014
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Credit Cards, Identity Theft, Debit Cards, Current Events
For you history buffs, what role did Diners Club play in popularizing credit cards (NY Times)?: Nevertheless, it soon became apparent that Diners Club’s founder, Ralph Schneider, was on to something. Mr. Schneider, a lawyer, said he had the idea after a client told him about going to a Manhattan restaurant without his wallet and having to wait for his wife to drive in from the suburbs to bring it to him. How long can they go?  Credit.com identifies three of the lowest interest rate credit...

A Mini-Lesson In Compound Interest: What If You Gave Up That Latte/Soda/Daily Small Purchase And Invested It?

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Oct 23, 2014
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Activity, Lesson Idea, Investing, Savings, Current Events
What is known as the “latte factor” in personal finance goes something like this…if you skipped that latte and invested it you would have $2 million dollars in 30 years.  Commentator Helaine Olen highlights a few shortcomings in the assumptions made to come up with this estimate. Your students are going to come up with their own “[insert drink here] factor” to see how much forgoing that drink will save them in the long run.  Here are the steps: Identify the cost of a daily expense...

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