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6 Lessons In Kindergarten That Will Help You Develop Great Financial Habits

little girl holding moneyWe can all benefit from good financial habits. In fact, we all want to make sure that our children start learning them early. This is why it is encouraged that parents teach kids about smart money management skills. When you let your kids develop the right financial behavior at an early stage, they will most likely bring that with them as they age. When you mold them to become great money managers at an early stage, you can be assured that they will make the right financial choices as they mature. And even if they make mistakes, it is okay. They will know how to get themselves out of the mess that they put themselves in.

While you can teach your kids a lot of things about money, did you know that they can also teach you a couple of things as well? There is this poem by Robert Fulghum titled All I Really Need To Know I Learned In Kindergarten. The same author also wrote a book that expounded on the ideas on this poem. This literary piece enumerated a couple of lessons that we learned in kindergarten. These lessons are something that we can implement even as we age. It tells us of how simple things really is for a kindergarten. In fact, even something as complicated as money can be simplified if you try to look at it through the eyes of a young one.

This is why we tried to search for tips that we can use to help develop financial habits in this literary piece. If you broaden your mind, you can actually see 6 different lessons that you can use to help improve your behavior when it comes to money. Since these are supposed to be lessons in kindergarten, you can probably use this to teach your kids about the proper way to handle their finances.

6 lessons in Kindergarten that can improve your financial behavior

So what financial lessons for kids can you use as an adult? Here are the 6 lessons we got from the poem by Robert Fulghum.

When you go out into the world, watch for traffic.

Everytime you cross the street, it is important that you look both ways before you step off into the busy street. When you watch out for traffic, you will know where you are, what is coming for you and what awaits you. The same is true when it comes to money. Before you make a decision, it is important that you know the whole situation first. You need to know where you stand financially. You also have to find out what will happen when you make a particular decision. Finally, you need to know you want to go it can influence the decisions that you will make about your money.

Everything you need to know is there somewhere.

This is in relation to the previous lesson. If you want to learn something, you will always find it somewhere. If you are persistent and determined to learn, you will find a way to get the information that you need. In today’s digital age, you can easily research something over the Internet. If you do not trust what is one the web, you can always find a professional that will tell you what you need to know.

Put things back where you found them.

This is a lesson that you can use if you want to learn financial habits that you can use every time you borrow money. If you used something, it is very important that you put it back if it is not yours. The same is true for any money or object that you borrow. You need to learn how to return it. You need to pay it back. This lesson mentioned that you need to put it back where you found them. In the same way, you need to return what you borrowed in full – including interest if that is what you agreed upon when you loaned the money.

Hold hands and stick together. This is a great advice for those people who are working towards a common financial goal. You may have goals with your spouse, partner, family or friends. Whatever it is, you need to work hard to meet them together. Cooperate and remember that two heads is better than one. Even if you have set your goals on your own, it helps to find someone that you trust and respect to confide in. This person is the one who will support and encourage you as you try to reach your financial goals.

Say you’re sorry.

This is a great advice for couples handling money together. At one point, you will make mistakes when it comes to handling your money. Since you are a couple, your mistake is bound to affect the other. Learn how to apologize and work with your partner to get past the error that you made. Try not to fight about it. If your partner gets angry, do not react negatively. Be humble about it and do not add fuel to the negativity of the situation.

Share everything.

You are not really required to share everything – but you are encouraged to share. This is not really something that will improve your finances – but it will make the growth of your wealth worthwhile. It does not really matter how much you give. As long as you share with those who are less fortunate than you, then it will add to your motivation to improve your finances.

Tips to develop the right money habits

Developing the right financial habits cannot happen overnight. It is a process that you need to patiently work on. Here are a couple of things that you need to do in order to make this happen.

  • Educate yourself. This is the first step. According to the financial literacy survey, 3 out of 10 Americans reveal that they are not confident with their financial knowledge. If you think that you belong to this statistic, you may want to start researching about the financial concepts that will make you more confident about making decisions.
  • Observe the financial habits that you currently have. Once you have done your research or while you are doing it, observe the habits that you currently have. You need to understand your current situation before you can make improvements.
  • Identify what needs to be improved, retained or removed. Based on what you find out from the first two tips, you need to think about the habits that you need to develop. What are the current habits that you need to improve, retain or remove? And beyond that, are there any habits that you need to add? Determine what these are before you proceed.
  • Practice the habits you want to develop. After you have identified everything, it is time to implement them. In developing new habits, you need to practice them repeatedly. According to an article published on, a habit is developed through the practice of three things: setting cues, going through the routine and earning a reward. If you do it repeatedly, you can train your brain to unconsciously do something. That is how you develop a good habit.
  • Always keep yourself informed. Lastly, you need to keep adding to what you already know. It is not enough that you develop the financial habits that you need to use to make your life better. You have to see if there are new habits that you need to form. This is why you need to continue educating yourself.

Follow these tips and you should be able to develop the financial habits that will help you improve your current financial situation.

How To Manage Your Finances If You Are Financially Supporting A Loved One

elderly couple with family in the backgroundLearning how to manage your finances is sometimes, not just for your own benefit. It is also for others who are depending on you.

As a family, we usually try to be there for each other. We try to be there for emotional and moral support, physical assistance, and even financial help. It is nice to know that when you are in deep trouble, you can count on your family to bail you out or at the very least, give you that little push towards the right direction.

It seems that relying on our loved ones became more popular after the Great Recession. Take for instance the new graduates. In the past, young adults who graduated would move out of their parents and live on their own. They will pursue their own life and take care of their own needs. In recent years, this practice is steadily decreasing. While it is not done by the majority, a lot of Millennials are moving back in with their parents. According to the data gathered by, the rate of young adults living with their parents is up to 26% in 2015 – a 2% increase since 2010. The age bracket of this group is currently 18 to 34 years old. Only 67% of them are living independently – a 2% decrease since 2010.

You may think that these young adults are moving back in because they have failed at financial management. That may seem like the case but a new study shows that it is not entirely true. At least, not anymore. Apparently, some of these young adults are actually at home because they have opted to financially support their aging parents.

Dealing with the financial issues when you are providing financial support

A recent study released by TC Ameritrade revealed that more Americans are supporting their loved ones than before. For some, they support their aging parents. Others support their adult children. There are also others who are supporting both.

Now when you intend to financially support someone else, you need to learn how to manage your finances so you can take care of both of your needs. It is not something to be taken lightly. Even if your financial resources are going well, you need to keep yourself from splurging. Instead, you have to ensure that you will prepare for the times when your resources become limited. In case something happens to your finances, you will not be the only one that will be affected. Even the loved one depending on you financially will also suffer the consequences.

According to the study published on, one out of 5 Americans serve as financial supporters of a loved one. On an average, they spend $12,000 in the past 12 months. Surprisingly, Millennials have spent more – averaging at $18,000 in the past 12 months. It is revealed that in most cases, mothers receive the most financial support from their children. These financial supporters also take on the burden, usually, because they were asked to. Based on the survey done, these supporters are happy with what they are doing. But when it comes to choosing between an aging parent or an adult child, most of them would choose to support their parents and leave their adult children to financially fend for themselves.

Of course, you know that helping out financially has its limits. This is why you need to manage your finances well because if not, you will be forced to make some sacrifices that can cost you a secure future. While your intentions are noble, you do not want to become a burden yourself when you retire. The respondents admitted that they had to make the following sacrifices:

  • Delaying life milestones. Since they have to put their extra money into helping their loved one, a lot of the financial supporters delayed major milestones. These milestones included buying a home, retirement, getting married and having kids.
  • Borrowing more money. Because the financial load is greater, some of the financial supporters end up owing a lot of debt. The average debt that they owe amount to $100,000 – including mortgage. In terms of credit card debt, they owe an average of $22,000.
  • Living a frugal lifestyle. Another sacrifice – that may or may not be one, is to live a frugal lifestyle. If you have the right perspective, you can actually look at this as a blessing in disguise. There are many advantages to living frugally and you may be able to learn a lot as you are forced into this lifestyle.
  • Using up their savings. The last sacrifice that they admitted to making is to use up the savings that they have put aside all this time. It is bad enough that they cannot save for their future. Having to dry up their existing savings is a really great sacrifice to make.

To avoid these sacrifices from ruining your future, you may want to manage your finances well so you can maximize what limited resources you have.

Financial management practices to help you support a loved one financially

There are couple of things that you can do in order to help in your money management efforts. That way, you can continue to help your loved one without making it too hard for your finances to carry. Here are some tips you should implement.

  • Use a budget plan. This is always a big help regardless of your financial situation. This plan will help you understand your income and expenses. It will give you more control so you can decide what your financial priorities are and you can ensure that they will always be met.
  • Track your spending. Another tip that you need to implement is to track your spending. This should be an easy task if you have a budget plan. This will help make you a smart spender because you are more cautious of what you are spending on each month. You can cut back on the expenses that you think is unnecessary.
  • Lower expenses. Once you have tracked your spending, you should be able to identify those that you can live without. There are various ways to slash your expenses so you leave more room in your budget for the unexpected expenses.
  • Plan for your future. Although your finances are tied up at the moment, that does not mean you should stop planning from your future. If anything, this is the right time for you to do that. You need to manage your finances not just for the present expenses, but for your future too. If you think that it is hard to financially support someone, you do not want to be on the other end when you retire. After all, you cannot be sure that someone would be selfless enough to make the same sacrifices that you are doing right now.
  • Save up for retirement. As you plan for your future, the most important task that you need to do is to save for your retirement. There are a lot of retirement plans out there that you can tap into. Choose a plan that your budget can afford.
  • Research benefits you can get as a financial supporter. When you are supporting other people, you need to research certain benefits that you can avail because of that financial responsibility. You can look into Medicare and Medicaid to see if you can get health assistance. You can also visit sites like to find out where you can get help.

These should help you manage your finances so you can create a more secure financial position for yourself and those relying on you.

Financial Lessons For Kids That They Can Use As An Adult

group of kids around saving conceptDid you know that teaching financial lessons to your kids will help set them up to a financially successful life in the future? You need to consider how important it is to learn financial management at an early age. There are many benefits to knowing how to manage your money properly. For one, you can use financial management as a debt solution. It can also keep you from debt in the first place. This is one lesson that you want your child to have as they enter into adulthood. One bad financial decision, like student loans, may result in decades of suffering.

According to an article published on, it is revealed that the percentage of students who display responsible financial behaviour declined – at least when you look at the statistics from 2012 to 2014. These behaviours include tasks like reviewing bills, paying bills on time, following budgets, paying off credit cards and controlling their spending. The survey involved 42,000 first year college students from both four-year and two-year colleges and universities. The topics in the survey covered savings, banking, school loans and credit cards. The report is titled “Money Matters on Campus” – an initiative from Higher One and EverFi, a financial company and education technology company respectively.

The report indicated that college students are stressed financially – regardless of where they come from in life. According to the report, the thing that gives them the stress the most is their level of student loans.

It is very important that you equip your kids with the right lessons that they can use even as they get older. Truth is, this is not very hard to do. A lot of financial lessons that we got as kids can easily be applied even as we get older.

Money lessons we got as kids that can be applied when we’re older

According to, there are a lot of parents who fail at teaching their kids the right financial lessons. In an article about teaching kids money lessons, it is revealed that 20% of parents have never talked to their kids about basic money concepts. This data came from a survey done by True Credit of TransUnion.

You need to do better than these parents so you can prepare your kids for a future filled with the right financial decisions. Here are 4 simple financial lessons that you can start with.

Money does not grow on trees.

Some parents think that this is a difficult concept for kids to grasp. But when you think about it, they need to learn it because it teaches them the value of money. They have to realize that you are working hard to earn the money that you are spending at home. You can discuss with them the concept of an income and how you need to spend hours in the office or your business to earn money. To illustrate this lesson, you can ask them to do extra difficult chores at home – something that they will be paid for. Choose these chores wisely. Try not to reward them for simple chores because that might make them refuse to help around the house if they will not be paid for it. If they are older, you can encourage them to find part time jobs – especially during the summer when school is over.

Just because you want it, doesn’t mean you should get it.

The next lesson that you can teach your kids is about smart spending. As a parent, it is quite difficult to say no to our children. But you know that it is never a good idea to give them everything they ask for. You need to help them get used to the idea that wanting something does not necessarily mean they should have it – especially if it is not a necessity. This lesson can serve as the foundation for smart spending habits. They can learn that even if they can afford to buy something in cash, it does not mean they should buy it.

Wait to save before you buy.

In connection with the precious lesson, you need to stress the importance of saving to your kids. Saving can help them purchase a lot of things in the future. If you have to say no to one of their requests, you can encourage them to save for it instead. If there is a toy that they want to buy, you can tell them that they can save up for it using their allowance. For younger kids, you can encourage them to help beyond their usual chores so they can earn extra money from you. They can use that to save up for the purchase that they want to make.

Spending money is fun.

While you need to encourage them to save, it is also important for you to teach your kids to enjoy spending the money that they have. This is especially true if they worked hard for that money. Have them commit to save a portion of it and then let them enjoy spending that money. They deserve whatever it is that they will spend it on. Try not to teach them to feel guilty if they do not save everything they earned. That is a mistake because they deserve to know that they can spend their money anyway they wish – as long as it is done in a smart way that will not jeopardize their financial standing.

Teaching kids smart money management skills is easy if you practice what you preach. Living by example is a lot better than hours of talking to your children about money management. Even if you spend hours teaching your kids, if they see that you are practicing something else, they are more inclined to follow what you are doing.

Money quotes from famous cartoons

If you feel like teaching your kids financial lessons seems daunting, you should know that there are a lot of tools that you can use to help you get the message across. For instance, Time for Kids and the financial editor of the “Today” show came up with a magazine that is intended to teach children money lessons. An article published on explained that this magazine will target fourth, fifth and sixth graders. The publication will be distributed to schools nationwide.

There are also story books that you can use to teach your children about money. There are even cartoon shows that can teach financial lessons – if you know how to use them properly.

You should know that some famous cartoon characters have some pretty impressive quotes that you can use while teaching your kids money lessons. Here are some of them.

The past can hurt. But you can either run from it or learn from it. – Rafiki, The Lion King. This simply means it is okay to make mistakes when it comes to your money. As long as you know the lesson that you need to learn from it and you will avoid committing the same mistakes again.

Venture outside your comfort zone. The rewards are worth it. – Rapunzel, Tangled. This is a great quote that you can relate to investing. The simple rule in investing is this: the higher the risk, the higher potential there is to earn more.

The future is worth it. All the pain. All the tears. The future is worth the fight. – Martian Manhunter, DC Universe. The lesson you can connect here is about saving – specifically retirement savings. Although your kids will have to sacrifice and let go of some expenses, it will all be worth it if they end up saving a lot for their retirement.

You control your destiny – you don’t need magic to do it. And there are no magical shortcuts to solving your problems. – Merida, Brave. Merida here is telling us that when it comes to your financial problems, the shortcut is not the best way to solve them. For instance, when it comes to debt, bankruptcy may be the fastest way to solve it, but it is not always the best way for you to get out of debt. If a solution seems too easy and too good to be true, then it probably is.

Fairy tales can come true. You gotta make them happen, it all depends on you. – Tiana, Princess and the Frog. This means if you want to be rich, you need to work hard for it. Those get-rich-quick schemes are rarely true. You need to work hard to become rich. It all depends on how much you want to improve your finances – if you want it bad enough, you will do your best to reach your goal.

Do not be fooled by its commonplace appearance. Like so many things, it is not what’s outside, but what is inside that counts. – Aladdin, Aladdin. This young thief can be quoted when you are trying to teach your child about financial decisions. Just because a lot of people are doing something, buying a product or something similar, it does not mean they should follow suit. Teach your child to trust their judgement and stay true to what they want out of their finances.

There are other quotes that you can use to help teach your kids important financial lessons. You know your child best so you are in the best position to figure out the best way to teach them these important concepts.

5 Things You Need To Know About Medicare Before You Need Medicare

Happy old couple looking at a cameraMedicare has been a Godsend for many Americans. There are now roughly 52.3 million Americans on Medicare; 43.5 million due to age and another 8.8 million because of disability. Medicare beneficiaries averaged $11,901 in total benefits this past year of which $5045 was Part A, $5092 Part B and $1773 Part D (more about Parts A, B and D later).

If you don’t think Medicare can be incredibly helpful, consider this. Both my parents died after long hospital stays and it cost them (or us) practically nothing. I have a friend who had emergency surgery last year. The total bill for his surgery and hospital stay was north of $120,000. What did it cost him? A little over $1200.

If you haven’t noticed, the cost of medical care has skyrocketed over the past 10 years. Consumer Reports recently reported, “Person for person, health care in the U.S. costs about twice as much as it does in the rest of the developed world. In fact, if our $3 trillion health care sector were its own country, it would be the world’s fifth-largest economy. “

If you haven’t yet reached the age where you’re eligible for Medicare we don’t have to tell you how expensive health insurance can be. But even if you’re a number of years away from 65 there are some things you need to know about Medicare before you need it.

There are four parts

There are four parts to Medicare. Part A includes hospital insurance. Part B includes medical insurance. Part C is known as Medicare Advantage. It includes all the benefits and services of Parts A and B along with some additional benefits and is operated by Medicare-approved private insurance companies. Part D, which was introduced under President George W. Bush, added prescription drug coverage.

The eligibility requirements

To be eligible for the original Medicare (Parts A and B) you must be either a U.S. citizen or legal resident and age 65. You would also qualify if you have been entitled to Social Security disability for at least two years, have end-state renal disease, require transplant or dialysis and are currently insured.

When to enroll

If you receive Social Security, U.S. Civil Service or Railroad Retirement benefits you will be automatically enrolled in Medicare Part A. If not there is an important seven-month enrollment period that overlaps your 65th birthday. The way it works is that if you want immediate coverage you must apply three months before you turn 65. If you wait and apply during the four months following your 65th birthday, you won’t have coverage for one to three months after you enroll.

If you fail to enroll during the seven-month period you will be penalized unless you or your spouse has health insurance where you work. The way this penalty works is for every year you fail to sign up, your Part B premium will go up 10% … and that’s forever.

There is a special enrollment period if you or your spouse is over 65 and covered by health insurance at your workplace. If this is the case you could delay signing up. If you do enroll then Medicare becomes the second payer. And if you enroll in Part B you will receive practically no benefits. You may also lose your Medicap enrollment guarantee.

What it costs

Generally speaking there is no cost for Medicare Part A. If there is some reason why you don’t qualify you can buy Part A coverage for a premium.

If you are eligible for Part A you’re also eligible for Part B. However, it ‘s optional. Premiums for Part B coverage start at $104.90 and are based on your adjusted gross income. If you sign up for Part B it will be automatically deducted from your Social Security monthly payments. Part B covers physician and outpatient care, home health, medical supplies and preventive services. It requires a co-pay of 20% of the covered benefit.Medicare doesn’t pay for everything

As great as Medicare can be, Parts A and B won’t pay all your medical expenses because of their deductibles and co-pays. In the case of Part A (hospital) coverage, there is a cost or deductible of $1216 for the first 60 days. It then jumps to an additional $321.50 a day for days 61 through 90 and then $630 a day for hospital stays beyond that.

These deductibles and co-pays are reasons for the afore mentioned Medigap or Medicare Supplement Insurance, which is designed to fill the “gap” between what Medicare covers and its deductibles and co-pays. There are 10 standardized Medigap policies to choose from. As you might guess, the more these plans cover the more they cost. As an example of this, Medicare Supplement Insurance Plan “A” includes 100% of Parts A and B but not the Part B deductibles. Plan C covers 100% of Parts A and B and includes 100% of Part B deductibles. Plan G is sort of the Cadillac of these plans as it provides 100% coverage of all deductibles, co-pays, excess charges; hospice care and skilled nursing facility care coinsurance.

The paperwork

The one downside of Medicare coverage is the bills and it’s important to review them carefully. We know that when you see your charges there will be a lot of medical mumbo-jumbo thrown at you so you may have to get out your dictionary or call your healthcare provider for some explanations. As an example of this the term “transdermal Clonidine procedure” means you had a Clonidine patch for some period of time. If you don’t remember having a patch or if you don’t have hypertension (which is what Clonidine is meant to treat) you need to call and dispute this.

medical debtBe sure to pay you bills

As painful as it might be you need to pay your medical bills as quickly as you can. If you don’t, your healthcare provider(s) could turn them over to a bill collector and this is something you definitely don’t want to happen. If you can’t pay your bills you should contact your healthcare provider and ask about arranging a payment plan. Depending on your circumstances you might also be able to negotiate a reduction in you bills. Barring that you could put the charges on a credit card or cards or get a debt consolidation loan. While these alternatives might not seem very appealing they are definitely better than letting your medical bills go to a collection agency as this would not only have a bad effect on your life but would also severely damage your credit score.

Different Ways Your Preteen Can Earn Money This Summer

smiling preteen with a garden rake

If you want your children to be financially literate after summer, you may want to encourage them to earn money during their free time. There are a lot of fun activities that can help them earn extra cash and if they choose the right one, it could prove to be quite educational too. Pointing out the things that they can buy with their own money might motivate your kids to go along with your idea.

Of course, you will encourage your children to earn an income – not just for the sake of having money to spend, but also to help them learn a thing or two about personal finances. The road to financial literacy is long and they will benefit a lot if they start their lessons at a young age.

When children are taught the right financial habits and concepts, they are more inclined to succeed in life. Developing the habits early on will help them make the right decisions at an early age. We all know that among the first financial decisions that your child will make involves student loans. If the right financial concepts and habits are instilled in them early on, they are bound to choose the right path when it comes to their student loans and other college expenses.

According to an article published on, teens are expected to be financially competent before they enter into college. The article cited a study done by the Organization for Economic Cooperation and Development that revealed how the US only ranked 9 out of 18 countries when it comes to teen financial literacy. Obviously, there is a lot of room for improvement – considering the fact that the student loan problem already reached its trillion mark.

Although efforts are being made to improve the curriculum to include personal finance lessons, we all know that a financially literate individual is shaped at home. That being said, you need to realize that motivating your children to earn money this summer can be a great step towards a successful financial future.

Encourage your kids to make money this summer

According to, financial decision making can be influenced by proper information, giving incentives for good decisions and allowing them to apply the information in real-life situations. When you are in your preteens, the best way to learn about money management is to start earning money.

The best age to encourage children to earn money is during their preteens or tweens. This is the age wherein they shift from being shy to becoming more independent. The idea of earning their own cash would appeal to them so convincing them to get a part time job would not be too hard to do. Of course, you want to make sure that the job they will choose will not suck the fun out of their summer break.

Here are a couple of options for your preteens to earn money this summer.

  • Babysitter. In truth, babysitting jobs for preteens have changed over the years. Parents will rarely leave their young ones with preteens and would opt for older babysitters. However, tweens can be hired to babysit just so the parents can do chores around the house. They simply have to keep the kids occupied to give the parents some peace and quiet for a few hours.
  • Senior helper. Another option for preteens is helping out the elderly. Some of these seniors simply need someone to be with them for a couple of hours so they will not feel alone.  Your child can help out around the house too like sweeping or putting some things around the house in order.
  • Dog walker. Some busy neighbors may be in need of someone to walk their dogs. This is a job that preteens can also opt for. It will only take a couple of hours to do this and can help tweens earn money easily.
  • Pet sitter. Speaking of animals, you can also encourage your kids to look after the pets of vacationing neighbors. Summer is a time to travel for some families and your kids can help look after any pets that will be left behind.
  • Gardener. This job involves simple tasks like mowing the lawn, trimming the bushes or keeping the garden clean. Cleaning the garden can be time consuming – something that some neighbors may not have time to do.
  • Car washer. Another job that your kids can opt for is washing cars. Have them go around the neighborhood to offer this service. It can be a once a week thing – depending on the needs on the person who owns the car.

Once your children starts earning money, it is your chance to teach them smart money management skills. They will be tempted to spend everything at once. You need to stop them from doing this by teaching them the right money habits.

Financial lessons children can learn while earning an income

In a report published on, it is revealed that a lot of kids do not know enough about money management. At least, it is not enough to make them responsible money managers when they grow up.

Since you have started by encouraging them to earn money during summer, you may want to continue by teaching them a couple of things about personal finances.

Here are a couple of lessons that you may want to discuss with them.

  • Value of money. By earning money on their own, you are teaching your children the value of money. They now understand that money do not grow on trees. You need to work hard to earn them. That should keep them from being too insensitive when asking money from you.
  • Budgeting. You may want to give them a lesson or two about budgeting. In case they want to stop working for the summer, you can teach them how to stretch their money so it will last until before school starts.
  • Saving. Instead of spending their hard earned money, you can encourage your kids to save. This is a great lesson for those who have recurring jobs. When they get their first paycheck, encourage your kids to save it so they can buy something more expensive at the end of summer. Or you can encourage them to save the whole paycheck for next year so they can go on a vacation or something.
  • Investing. As you are teaching them about saving, you may want to explain a bit about investing. For instance, you can discuss with them the value of saving up for their college fund. To maximize the growth of the money, discuss with them how investing can help increase their money in ways that a savings account cannot.
  • Smart spending. In case your child wants to spend their money, teach them how to do so in a smart way. While saving is a great idea, your kids deserve to enjoy the money they earned. Let them decide but encourage them to spend their money on things that will enrich their lives even further.

Take note that there are several options to make financial lessons appealing to kids. It does not have to be boring. In fact, there are ways to teach financial lessons through cartoon shows. If your child is interested in sports, you can relate financial concepts to that too. Or you can point out prominent individuals who have made good decisions with their money. You can also discuss individuals who have made mistakes. It really depends on what you think your kid can relate to.

Here is a video that will give you tips on how to teach kids about personal finances.

3 Tips That May Not Be The Best Financial Advice For You

couple with a financial expertWhile there is a financial advice for every generation, there is still a need for you to consider if these tips are really applicable to you. There is no one size fits all financial management. You need to understand which of them should be implemented in your life based on your specific financial situation.

There are a lot of gurus out there who are truthfully, sincere about helping you improve your financial standing. But before you apply their teachings in your life, make sure you understand what is at stake first. It is not enough that you keep on implementing what you hear. You need to filter out what will benefit you the most.

3 financial tips that are not always good for you

There are certain financial tips that when you first hear about them, you would want to implement them immediately. But before you do that, please make sure that it is an advice that you will really benefit from. If not, you can lose more money because of it.

Here are three financial advices that you need to consider carefully before you commit to them.

Financial advice 1: Automate your bills payments

There are financial advisers who tell consumers to automate their payments so it will never go to default. This makes a lot of sense if you think about it. You do not have to worry about making deadlines and keeping up with all the money that you have to send out every month. You do not have to juggle with due dates and all the details that come with making payments each month. Best of all, you do not have to worry about late payments.

But according to, a pitfall of automating your payments is you will get lazy. The convenience that makes this mode of payment appealing can also be its downfall. You can easily lose track of all your payments. Since you are no longer thinking about them every month, you could think that your financial obligations are not as demanding as you thought it was. That could make opening new accounts more tempting.

You can also miss out on any machine related mistakes that could have caused you to pay more than what your should. Or it can cause you to pay less which will end up making you incur late penalty fees. Not only that, you can be in danger of overdrafting on your account. That is something that you do not want to happen.

Unless you are sure that you can control your spending and you can keep track of your payment, you may want to rethink following this financial advice.

Financial advice 2: Using credit cards for their rewards.

We have heard this advice before – if you will take a credit card, make sure you can benefit from the rewards. Some people are only interested in applying for the card because of the rewards and discounts they will get immediately. According to the data provided by, the initial rewards and bonuses of credit cards are 10% more in the first quarter of 2014 as compared to the same period in 2013. This can be very tempting to grab since the points and miles-based rewards are considered to be at an all time high when it comes to value.

But even if that is true, you need to exert caution. These cards will only be beneficial if it fits your spending lifestyle. If not, then do not avail of it. They will only be a temptation to increase your purchase.

Financial advice 3: Do not touch your emergency fund.

There is an interesting article from that discussed why an emergency fund is a bad idea. According to the article, it is overly prudent to create an emergency fund. If you understand the risk and your other options, you will realize that there are better places to put your money than to let it sleep in your bank account.

At least, this is true if you are after financial wealth.

If you do the math, a person who lives on $30,000 a year will have to save up at least $22,500 to have enough emergency funds. But think about it. The average interest on your savings account is a mere $1-2%. That only translates to $225 to $450 growth. Even the ones with the highest yields of 3.5% will give you less than $790 of annual growth.

Now if you put that money on an investment that will earn you 15%, then it will earn you a whopping $3,375 per year. Don’t you think the need for an emergency fund is not too smart at this point? Just think about it.

You can probably set aside 3 months worth emergency funds and put the rest in an investment that you can liquidate easily should the need arises. That is how you setup your money to work for you.

How to filter the money advices you get

In truth, there is no such thing as a bad financial advice. Even putting yourself in debt is a good advice – but again, it has to depend on your unique situation. We were all told to eliminate debt but there are benefits to being in debt. Things like having the opportunity to raise your credit score is one. It can also help put money in your pocket – if you use it correctly.

The key is to know how you will filter out the advices that will have a good effect on your financial life and those that will not. Here are 5 tips that should help you decide what advice you can follow and what you need to forget about.

  • Have a clear idea of your financial goal. If you do not have one, then go think of a goal. It will not only give your financial habits direction, it will also help motivate you to improve your financial situation. If you have financial goals, you simply have to determine if the financial advice that you are getting will bring you closer to it. If not, then you can choose not to follow.
  • Know your financial behavior and situation. If you are also aware of your current financial standing, it will be easy for you to determine if an advice will be good for you or not. It is also vital for you to understand your own personal behavior to see if it will bring you closer to your goal or not.
  • Keep your financial education updated. Financial literacy is an important aspect of financial growth. It is also give you the foundation to choose the advices that you will follow. So make sure you are updated not just on the concepts, but the latest news about the financial situation around you. That way, you can know if a certain financial advice is still relevant based on the current economic conditions in the country. Someone might be telling you something that used to be effective in the past but not under the present economy.

In the end, having a clear picture of what you want, what you are capable of and what is realistic will help you make smart choices about your money. Keep in mind that a certain plan may work well with someone but it does not necessarily mean it will do the same for you. Think about that before you really choose to follow a financial advice.

5 Routines to Practice Financial Fitness

Consumer running while carrying a briefcaseFinancial fitness is an important aspect of our financial literacy. Similar to athletes participating in several sports, they prepare long and hard for each game. They live with discipline and dedication in order to achieve their goals. The more they practice and prepare for their game day, the better their performance is on game day. They are able to address the needs of the game and quickly adjust as needed.

The same principle goes for consumers in their daily battle with finances. It does not happen overnight. You do not wake up the next morning with all your debts paid off, all your bills paid for, your 401(k) at retirement level and emergency fund that can last you more years than you need. Even if you win the lottery today, it will be a short lived cash happiness without being financially fit and literate.

The even shows that heading to off season, the NBA teams are just as concerned with their financial fitness as they are in keeping their players fit and healthy. The teams need money to pay the salaries of their players and they need the players to generate income for the team. Both area of the business and sport needs to put a premium on fitness to ensure that they can continue their purpose.

Practicing Financial Fitness

One of the world marathon majors, the New York city marathon is one of the biggest marathon events being organized in the world. Now carrying a different sponsor, it used to be ING New York CIty Marathon but is now branded TCS New York CIty Marathon. The event is slated on November 2, 2014 and is set against another challenging course.

The race begins in Staten Island in Fort Wadsworth near the Verrazano-Narrows Bridge. It then passes through Brooklyn and reach the Pulaski Bridge signifying the racers are halfway in the course. The road track proceeds to cover East River via the Queensboro Bridge entering Manhattan. Runners proceed to Willis Avenue Bridge and returns to Madison Avenue Bridge before entering Central Park through Harlem down Fifth Avenue. The race concludes by going back to Columbus Circle near Tavern on the Green.

That is a full marathon circuit and anyone taking that course on November 2 needs to be physically fit. Relating that to financial fitness, that course is similar to the challenges we have to take on in life. As the runners race to the finish line, we practice financial management to get to our goal. But we do not just get up and run the race just as we do not instantaneously get to our financial goals. Aside from the having a financial health checklist, we need to prepare for the actual financial challenge.

Set a goal

The first step is to financial fitness is setting a goal. Just as the marathon runners in New York city has one goal in mind, which is crossing the finish line at a good time, consumers need to also have a goal in mind. This serves as a target to aim for and can regularly remind of the ultimate pay off on all your financial decisions.

Having a goal helps you keep your focus. Say the goal is to pay off your student loan as fast as you can. That goal will help guide you in all your financial decision making. Just like the runners whose main goal is to finish the race, their preparations are all leading to that purpose. They train to get fit to achieve that goal. Your roadmap to your financial goal should be built around your main purpose. It has to lead to your achievement of your financial target.

Budget routine

There are people who are having a hard time grasping and understanding how budgeting works. This plays an important role in practicing financial fitness. Putting together a budget is your blueprint to achieve your goal. It is your step by step process in making sure you are on the right track and don’t go astray.

New York marathon runners train with a specific routine. They follow specific strength training workouts and check their food intake. They measure their performance to check if they are improving and staying on course. This holds true for consumer budgeting.

Your budget needs to keep you on track in achieving your goal. It is there to remind you how much you need every month to cover your expenses. It also lists down all your expenses every month so you can quickly do an audit n where your money is going. It can help you curb unnecessary expense items and save you extra dollars every month

Get debt down

Most runners have an ideal weight that they need to get down to in order to run more efficiently. In financial fitness, think of debt as excess weight that is pulling you down. Physically speaking, it is best to shed of excess weight until you are comfortable with your own body and you can move and go around as much as you want.

This is the same with your finances. Getting debt down can help you move freely with your finances. It opens more financial opportunities and just gives you more legroom to go around. Debt ties up your income to interest payments which is eating up on what could possibly be your emergency fund or retirement fund.

Avoid temptation

There will be temptations along the way as you reach for your goal. For New York Marathon runners, it could be skipping a training day or cheating on their diet. It could also be going around not being serious with the preparations for the run like sleeping late and partying all night long. These temptations steer them away from achieving their goal.

Same goes for financial fitness. Steering away from financial temptations can be a challenge. Just like getting that new mobile gadget or putting in your online cart that discounted European cruise. These are temptations when it will keep you away from your main goal. If the money that was supposed to be extra payment for student loans is used to buy a new guitar just for hobby, then that is a temptation. But if your bread and butter is producing music, then that guitar can be an investment.

Get professional help

New York marathon runners are mostly professional runners. And majority of them have had professional trainers guiding them to their peak health and condition to take on the gruelling marathon course. This is the same for consumers on the road to financial fitness.

There are professionals out there that can help you make better decisions with your finances. There are those as well that can help you manage your debts better. They offer professional pieces of advice that you can use to get out of debt.

Benefits of Financial Fitness

Practicing financial fitness can yield benefits for the consumer. Some of these are:

  • Less stress. People who are financially fit are able to manage their finances better and are in top of the situation. This gives the peace of mind knowing how they are financially performing. Taking a prevention-stance is better than problem-solving mindframe.
  • Better health. Taking on a financially fit goal ripples out to physical fitness. It gives you more sleep and takes away worry. It gives you a good appetite and you are able to eat healthy food rather than wolfing down on ice cream and cake because of too much worrying.
  • Improved focus. You are able to concentrate as well on the task at hand rather than thinking of how to pay for the bill coming in at the end of the week rather than paying attention on your current task. tells consumers that fitness is a step by step process. This is made up of small positive financial habits that we maintain over the course of time. As we do it over and over again, we build it into our own routine and helps us get to our goal faster.

In most cases, your financial health is connected with your physical health. So if you want to be physically fit, you also have to work on your personal finances. Here is a video from NBC15 about financial health.

Consumer Debt Indicates Confidence

happy woman with groceriesConsumer debt is a common experience for most Americans. It is evident in almost every aspect in their lives. It is a companion in almost all major decisions in a consumer’s life. Financing college dreams would most usually equate to taking out federal and private student loans. This would pay for the tuition and other fees to graduate with a degree.

For consumers buying a car, taking out a car loan is just around the corner. It helps them finance the car instead of buying the car in cash. It allows them as well to not tie up their funds in just one property. Buying a home would similarly have the same concept as getting a car. Mortgage loan is one of the most used consumer loan instrument.

From college education to buying a car and owning a house, consumer debt plays a vital role in those major life points. But even in our everyday lives, consumer debt is evident in our use of credit cards. From buying groceries, paying for the monthly bills to dining out with the family, credit card use has been playing a big role in a consumer’s life.

With all these consumer debt, people have been finding themselves deep in debt and putting together a financial routine to tame big debt. But experts are looking at debt in a different light. Oddly enough, some financial experts deem debt as a good indicator of consumer confidence.

Confidence in growing consumer debt recently shared an article on how consumer debt is indicating growth in consumer confidence. From the study, consumer debt for the first quarter of 2014 stands at $8.69 trillion. Covering the same quarter last year, this is a 2% increase in debt. And looking further down the timeline, this is the only increase in consumer debt since the 2008 recession.

The highest point for consumer debt was way back in the third quarter of 2008. Debt stood at $9.99 trillion. After this point, mortgage began a steady decline because of homes being given up due to default. Add to this the fact that few new home mortgages are being taken out for fear of the market and economy in general.

The increase in debt is being studied in comparison with a decline in delinquent payments as well. The study revealed that the delinquent payments for credit cards during the first quarter of 2014 was at 8.5%. This is the lowest percent of delinquent payments since 20013. This is a great indicator of consumer confidence in personal finance.

The study shows as well that there is an increasing number of young consumers aged 22 years old to about 25 years of age that are taking out auto loans. This holds true for those that has student loans and those that do not carry any student debt. There are a few reasons for an increase in auto loan takers such as:

  • Stable fuel prices. A steady performance of fuel prices has been generally a great contributor in the increase of auto loans. even reported that because of stable prices of fuel, there are shifts in consumer preference in car brands.
  • Interest rates. The rates for car loan are relatively low and this encourages consumers more to buy that car that they need.
  • Credit availability. This is an example of an economic supply and demand ratio. As more people are looking for lenders for an auto loan, more banks are offering the loan instrument. Extending the service to cover the consumer market that are on the lookout for auto loans.

Talking more about consumer debt,  mortgage had quite a decrease in the 27 years old to 30 years of age market. The survey even pointed out that a lot of it has to do with people struggling with student loans.

Student loans are affecting mortgage loans

Carrying big debt can lead to terrible things to  your family. Debt is is both prohibitive and limiting in nature. This does not limit itself to just mortgage loans, credit card and auto loans. In fact, one of the bigger industries at the moment is student loans. The industry has seen phenomenal increase over the past few years. shows that in the past 10 years, there has been a 300 percent increase in student debt. The industry is now at $1.2 trillion and growing. In 20013, the student debt stood only at $253 billion and steadily climbed up. In fact, if grouped with other consumer debt such as mortgage loans, credit cards debt and auto loans – student debt kept at increasing in a steady pace.

This year, there are about .85 college students graduating with a bachelor’s degree. Simple straight computation would indicate that each one of them would have an average of about $26,500 a college graduate. Even with lower delinquent payments for student loans, there are still about 30% in default for federal loans. This indicates that there are quite a large number of borrowers struggling with payment.

This is in fact one of the things that experts are looking at as a cause of a decline in new mortgages for possible borrowers with student loans. Simple logic dictates that having a big student debt puts stress on a borrower to pay. The chances are they send in  late payments or worse, delinquent payments. This would reflect negatively on their credit score. And a subprime borrower would either be slapped with a high interest rate because of the risk or be denied outright. These two scenarios would lead the borrower to put off a mortgage loan until the student loan is paid or their credit score improves.

This is a dilemma knowing how a college education benefits the income. There is evidence to support that college graduates are able to land better paying jobs than high school graduate. Unemployment for college graduates are at 6 percent as compared to 13 percent for high school graduates or those who do not have a college degree.

The student loan debacle can boil down to one point, managing any consumer debt has to be done with financial literacy at the helm. From the time the loan is to be taken out until the repayment period all the way to paying it off. Having the basic wisdom if the loan is really something that is needed to the budgeting of monthly income to pay off the debt requires financial literacy.

It is one thing to qualify for a loan but it is another to make the payments to maintain a good credit score. Having a good paying job will not worth much if you delay on your payments and use the funds for unecessary expenses. Having a goal to aim for can greatly help in steering you over to the right direction. Having a  budget as well to guide you in your daily expenses will bring you closer to that goal.

The increase in consumer confidence because of an increase in debt and decrease in delinquent payments is a good sign that people are able to maintain debt and make the payments on time. They are more aware of the financial responsibilities and the effects of mismanaging the payments. It can also show the confidence people have in the economy because taking out loans are long term responsibilities.


The Road to Financial Literacy

Woman looking at paperFinancial literacy is one of the key components to achieve a successful financial life. Some people have the right resources and opportunities but their lack of knowledge only led to the loss of what could have been a good shot at personal wealth. Financial literacy and opportunity goes hand in hand in ensuring proper finance management.

Having the right tools to manage your finances normally leads to a path of financial freedom as well.  Debt is often the product of uninformed financial decisions that can be compounded by unfortunate life circumstances. But focusing on those that can be addressed is an important step in getting out of debt and on to a road of financial independence.

Financial literacy in the country recently rated the states in the country in terms of financial literacy. New Hampshire took the top spot by ranking number one followed closely by Utah and Virginia. New Jersey and Minnesota rounds off the top five in the study. The study shows that these five states are conscious and serious about proper financial management.

The study used metrics to measure education and knowledge as well as daily habits and planning as well. The study also revealed rankings of different states according to characteristic:

Dropout rate for high school

Education at any level is important for an individual. It works with the character and determination of a person to succeed in life. It is not the only determining factor in success but it is a very crucial tool in reaching greater heights. There are also some schools teaching your kids about finances.

The study showed that New Hampshire has the lowest dropout rate of 1.2%. This is a good factor leading in why the state is leading the pack in financial literacy. It is also a good sign of a healthy educational system.

Emergency fund

Saving up for a rainy day is important in getting over unforeseen challenges life will throw our way. Medical emergencies or losing a job could be some of the events our emergency funds can address. Without it, you can get deeper and deeper in debt as your only option is to get a loan to have the money to survive.

Arizona tops the list at 53%. More than half its population knows the value of a rainy day fund. They build on it and put it aside hoping they never get into a situation where they need to use it. But if they do, then they have something to pull out. Indiana is at the bottom of the list at 33%.


Bank accounts are essential tools in safekeeping hard earned money. Better than just letting the funds collect dust at home, they earn interest in the bank. And you also almost the same type of access to your money in the bank just as you would put it in a drawer.

New Hampshire tops the list again with just 99.1% of residents having a bank account. This means they are well on their way to ensuring their funds are kept safe. It is also important for parents to tell their kids about their finances in case of emergencies, they know the financial standing of the family. Mississippi is rounds up the list with 15.1% of residents not having a bank account.

Sustainable spending habits

Making good use of the money you earn is a good sign of sound financial literacy. Maryland residents know about this as they top the list at 14%. Most of them know the value of a dollar and uses them wisely. Mississippi is again at last place with only 22% of its population guarding their spending habits. Proper spending habits can also make you confident about personal finances.

Borrowing rate

This is a great gauge on the risk profile of state. The lower the number, the lesser the chances of default and the better the credit score. It also echoes the health of the economy in a  particular area. Excluding bank rates, New Jersey tops the list with only 16% and Oklahoma is at the bottom with 40%.

Financial literacy occurs on two levels. Looking at the macro-perspective, consumers need to understand the policies that are formed and how it relates to their finances. They need to be updated with rulings and recent news that could affect their lives. On a micro level, consumers need to be aware of personal financial traits and characteristics. This can include saving, spending and even consumption. The understanding that encompasses these two levels can greatly contribute to financial literacy.

Financial literacy month

April was financial literacy month and it was a great time to remind us that at the end of the day, we are all responsible in our financial standing. It also made us realize the importance of saving and what it brings to our future. In light of this, came out with some points on how to create our map to financial literacy.

  • Commit to financial change. Financial literacy starts with a commitment. It starts with the individual wanting to change and a commitment to stick to a lifestyle of sound financial decisions.
  • Check your financial standing. Doing an audit of your situation financially can get your started in the right track. It is important to know where you are coming from in order to prepare on where you want to be. Financial literacy starts with an honest assessment of one’s self.
  • Credit report clean-up. Making sure that your credit report is accurate will help you open numerous financial opportunities down the line. Check the accuracy of your report and if there are any problem, report them right away so they can be fixed.
  • Priority setting. It is crucial to lay out your priorities to reach your goal. Knowing where to start with and what to aim for first can guide you in the right direction. This can also help remind you of what financial journey you are on.
  • Set goals. Classifying your goals as short, medium and long term can help you prioritize even more. This can give you a clear direction on where to start and when you should end on a specific goal. It allows as well to put a time frame to your goals to push you even more.
  • Debt payments. It is quite a challenge to pursue financial dreams with a ton of debt breathing down your neck everyday. Paying down and paying off your debt should be on top of your list. Clearing up income payments that go to debt payments and channeling them over to your goals will help achieve them faster.
  • Emergency fund. As with everything, we need to expect things will not always turn out the way we want. There will be bumps along the way that could steer us off-course. The way to remedy this is to prepare for the unexpected. Build an emergency fund to help you through rough times and prevent them from getting rougher.
  • Retirement fund. You are only young once so save up for those winter days. Tackling retirement early will help you retire when you want not when you need to.
  • Track your expenses. Keeping tabs on where your money is spent is a good practice on financial literacy. It is easy to remember the big ticket items but those small repetitive ones are quite hard to tally up. By tracking them, you will see just how much you are spending on unnecessary items and can help you save up precious dollars.

Financial Literacy With Football

Man having financial problems

There is a good percentage of athletes that would benefit greatly from financial literacy classes. listed some athletes that mismanaged their funds. Among which are six-time NBA champion  superstar Scottie Pippen who lost millions in bad investments. Allen Iverson also lost millions and at one point owed a jeweller more than $800 thousand. NFL superstars like Warren Sapp, Michael Vick and Terell Owens all lost money in misguided financial undertakings.

These athletes could make more in a year what ordinary people can make in a lifetime. That is why people compare athletes with lottery winners because of the financial gain in the sport. Of course, this is not to belittle their talents and skills and the hard work put in to sharpen those tools. But if they are not too keen in managing their finances, all their effort will go to waste. They could lose everything even before they retire.

Financial literacy with a twist

Coming off from Superbowl, quarterback Brock Osweiler of the Denver Broncos is the face of a new technique that aims to teach young people about making sound financial decisions as reported by It is a fact that football is a national sport loved by many Americans including the kids. That is why when looking for ways to make financial literacy campaigns fly off with kids, incorporating it with football was the way to go.

Designed to be a video game and part of the classroom curriculum, “Financial Football” was developed. It is part of a statewide campaign to reach out to teens with the objective of teaching and improving financial management skills. The way the game works was that for every money management question thrown away, a correct answer would enable players to to choose from a variety of running and passing offensive plays.

Being an alumnus of Flathead High School, Brock Osweiler visited his roots where more almost 60 business and finance students waited to see him and play financial football. Reaching out to teens is a great time to talk about financial literacy as they are prepared to tackle financial responsibilities when they grow up. This would include funding college, buying cars, renting or purchasing homes and even starting a family.

3 Key things

Before starting the game, Brock Osweiler talked about the 3 things he learned as he was in his journey to practical financial literacy.

Budget. He pointed out that athletes do earn a lot. So much that some could think of the money as a neverending well of dollars. But no matter how much you make in a month – $400, $4,000, $400,000 or even $4M, having a budget is of utmost importance. It will show and guide you on how to properly manage the income that comes in. Without a budget, it will be as if you are walking in the dark and might he headed to bankruptcy like some athletes.

Affordability. One rule of thumb in making purchases is the fact that if you cannot buy the item using cash, do not purchase it. There are of course exceptions to the rule but sticking to this mantra will help you avoid unnecessary purchases. If there is a item that you want to buy and you do not have enough funds to buy it, save up for it rather than charging it to credit.

Educate yourself in terms of finances. Take classes, talk to you parents, save with your friends. Improving your financial literacy will benefit your finances in the long run. Brock Osweiler took several marketing, personal finance and even sports entertainment marketing classes just to be on top of his money. This is hard work but just like in practice, the harder you work on it, the better you become at it.

Here is a video on financial football:

Managing finances properly

With all these athletes losing money and even filing for bankruptcy a few years out of retirement, is there a way to prevent this? Financial literacy is a great tool in addressing this concern. Again, it goes back to the fact that athletes get so much money from salaries to endorsement deals that they sometimes make the most absurd purchases. recently released an article that aims to be somehwat of a refresher list for those lookiing to straighten up their finances. A brush up of financial literacy would always be a good step in proper money management.

Some of the things we need to be on the lookout are the following:

Starting point

This is similar to performing an audit of your current situation. It is great to have a budget and a goal that you would aspire for but the amount of work that you need to put in is dependent not only on the goal but also where you are starting from. Take for example a goal of buying house of your own. Knowing how much the property is will serve as your goal. If the house is valued at $30,000 then you would need that amount to but it.

But how much will you need to save up? $30,000? This is why knowing your starting point is a good idea to let yourself know how hard you still need to work. If you have not started yet then you really need to put up the whole amount. But if you have $10,000 in the bank and some assets and investments you can cash in that would all total $15,000 – that is already $25,000 right there. You would only need $5,000 more to get that house. From here, you are able to know how much more you need to set aside every month for the house,.

Needs and wants

It is essential also to distinguish needs versus wants. Putting a clear fine line between the two would help you prioritize purchases which is a backbone of financial literacy. Needs are the things you cannot live without. This would cover food, water, shelter, clothes, medicines and other items meant for your survival.

Wants could be different or in the same category. It could be water –  you need water but you want that $10 water brand when you have water at home that would do the same job of quenching your thirst. You have food but want to dine out in expensive restaurants to partake of the meals prepared by world-renowned chefs. Same with shelter and clothes, we need them both but want is staying in a community we cannot afford because of the stature it brings and wanting to buy signature clothes because they say so much about what you can afford.

It is important to satisfy the needs first and balance them with the wants in our life. In fact, our wants could even be a push to the right direction. If you have a car but you need a big SUV because the family is getting bigger and there is that brand you want because it offers the top of the line safety features – then work hard for it. If you cannot afford it yet, save up for it so you can buy it for your family.

Spending monitor

One of the things that is essential to maintaining a fool-proof budget is knowing where everything is going especially in the expense side. List them down to know where you can take out or reduce expense items.

Get rid of debt

Debt is very prohibitive in nature. It limits our capacity to save for emergency and even start and end early with our retirement plans.  Get rid of debt as early as possible to put income into good use.

Money management plays an integral part of our financial plans. Financial literacy starts with proper management of income and expenses coupled by making informed decisions along the way.

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