Are Your Children Financially Literate?

Are Your Children Financially Literate?

New Approaches to a Changing Problem. How bad is financial illiteracy today? So bad that your children may be at risk of making some serious financial mistakes. Some are finding that talking to children about finances has become less about the nuts and bolts of money and more about putting money’s importance to our daily lives in the correct context. Women at particular risk. The U.S. Department of Labor reports that only 45% of working women ages 21-64 have a retirement plan. The DOL also notes that more women work in part-time jobs, and are more likely to interrupt their careers to take care of family, whether that be raising children or looking after parents. Some of these patterns are just luck of the draw, but others may come from what parents teach children about money, and how they teach it.1 Start at a young age. New York Times money columnist Ron Lieber’s book The Opposite of Spoiled discusses ways to prepare children for dealing with financial issues. The title refers to the author’s search for an antonym to the word “spoiled” in the context of an entitled and demanding personality. Lieber suggests focusing on values like graciousness in communication, which can lead to more openness in discussing money. Money can be frightening or mysterious to many, even well into adulthood, and Lieber encourages approaching the topic with fewer facts and figures and more as an emotional issue. The reasoning for this is that money is, for children and adults, an emotional topic.2 The emotional toll of money issues. While most people have experienced money worries at one time...
How and Why the Debt Snowball Method Works

How and Why the Debt Snowball Method Works

Blog Post Originally From DaveRamsey.com Remember when you were a little kid, waiting impatiently for the first big snowfall of the season? As soon as the ground turned white, you rushed outside and started building your epic snowman—rolling one giant snowball head or torso at a time. That’s exactly how the debt snowball method works. You start by paying off your smallest debts first, then you gain serious momentum along the way. Before you know it, what once seemed impossible turns into a giant accomplishment! Here’s how it works: Once you’re on Baby Step 2—that means you have your $1,000 starter emergency fund saved up—list your debts smallest to largest by amount owed. Don’t worry about interest rates. We don’t care if one debt has a 2% rate and another one has a 22% rate. Just list them in order. Pay minimum payments on all of the debts except the smallest then attack that debt with a vengeance. We’re talking sell-out, get-this-thing-out-of-my-life-forever energy. Once it’s paid off, take the money you were putting toward that debt, plus any extra money you find, and attack the next debt on the list. Once it’s gone, take that combined payment and go to the next debt. Knock them out one by one. Here’s an example: Let’s say you have the following debts: $500 medical bill $2,500 credit card debt $7,000 car loan $10,000 student loan For this example, let’s also say you find an extra $500 each month by taking an extra job, slashing your lifestyle to nothing, and going crazy. That’s very doable. After listing your debts in order from smallest...
7 Signs Your Budget Needs a Fresh Start

7 Signs Your Budget Needs a Fresh Start

Blog Post Originally From DaveRamsey.com A sloppy budget is a lot like a car that won’t start. It may look nice, but if it doesn’t take you where you need to go, what’s the point? It’s time to get under the hood and get your budget working for you again. Here are seven signs you need to restart your financial engine.   1. Withdrawing cash before you budget It’s the first of the month. You have no cash and need groceries—like yesterday. Why not swing by the ATM, grab some cash, and do the budget later? Because you’ll forget! And without a plan, your cash will pull a disappearing act. So before the month begins, write out your budget on paper, on purpose. If you wait, it won’t get done.   2. Not giving off the top (or at all) If you want to win at money, you must give. It’s as simple as that. When you give off the top of a well-managed budget, you may be surprised to find that living on less can actually feel like you have more. That’s because managed money works harder. Charitable giving should always be the first line on your budget.   3. Constantly worrying about “unexpected” big purchases There’s no reason to live in limbo. If your clothes dryer dies, you need to know exactly how much your budget allows for a new one. Shopping without a figure in mind is a recipe for anxiety and overspending. The whole point of a budget is to take away the worry of the unknown. So when you budget, give every dollar a...
After the Divorce: How to Get Your Financial Feet Back

After the Divorce: How to Get Your Financial Feet Back

Blog Post Originally From DaveRamsey.com The emotional and financial consequences of a divorce are difficult to get your mind around. People tend to go numb in the middle of that chaos, because facing all those realities at once would be too much to bear. But as gut-wrenching as a divorce can be, all we have to do is look around us to see people who’ve survived and are in the process of recovering from their divorce emotionally and financially. They are proof that while a divorce changes your marital status, it does not change who you are or what you’re capable of. That can be tough to remember when you’re deep in the valleys of the divorce process, so we asked some folks who’ve been down that path to share their experiences. In particular, we wanted to hear from people who know what it takes to get back on your feet financially after a divorce. Our hope is that hearing from people who’ve been in your shoes and found a way to take control of their financial future will inspire you and reassure us all. Financial recovery is hard work, but it is worth it. Bad Decisions Make a Tough Situation Worse In the early days of a divorce, all you can do sometimes is just keep things together. That’s why Charles A. from Lehi, UT, says this is not the time for making big decisions that will affect your finances. “The worst thing you could do is make life-changing decisions in an emotional state,” he says. “It’s common knowledge that you don’t invest based on emotions. You don’t...