Wednesday, April 28, 2010

Volunteering for Junior Achievement

I recently started volunteering for Junior Achievement. Volunteers from the business community go into classrooms and present 5 lessons about financial matters.

I have been volunteering in a 4th grade class. The lessons have been pertaining to resources needed to start a business and how to keep track of income and expenses. I had each of them come up with an idea of a business they would like to start and where to have it located. What resources they would need and if it is located in a good location for the resources they need.

The kids enjoy having visitors come into the classroom.

It has been a very rewarding experience.

Saturday, April 24, 2010

529 Plans

One of the topics at the Financial Literacy conference I attended on Thursday was College Save

A 529 plan is a tax-advantaged program created by Congress to help families like yours save for future education expenses. The name, "529," comes from section 529 of the Internal Revenue Code that specifies the plan's tax advantages.

Most 529 plans are sponsored by individual states and, to encourage their residents to save for college, many offer tax incentives to residents who invest in their 529 plan. The College SAVE Plan is sponsored by North Dakota, which offers a special tax deduction to its taxpayers.

College SAVE is the only 529 plan in the country that offers North Dakota taxpayers a state tax deduction. Single individuals can deduct up to $5,000 of contributions from income on state tax return each year. Married couples filing jointly can deduct up to $10,000 of contributions from income on their state tax return each year.

When you enroll in a 529 plan, you will be able to choose from a variety of professionally managed portfolios. It is never too late to start saving in a 529 plan, but the earlier you start, the more time your money will have to work for you.
The minimum amount for initial and ongoing contributions is $25.

College SAVE investors who are ND residents may qualify for a matching grant of up to $300 from the Bank of North Dakota. Grandparents may qualify for the matching grant due to lower retirement income.

At the most basic level, there are five steps involved in using a 529 plan:
1. Review the plan disclosure statements and choose a 529 plan that fits your needs (be sure to check your or your beneficiary's home state 529 plan to see if there are benefits)
2. Open an account, either online or by paper form
3. Select from the plan's investment options
4. Contribute over time via check, automatic investment plan, or electronic bank transfer1
5. When your designated beneficiary is ready to attend college, use your 529 plan account assets to pay for tuition and other qualified higher education expenses2

See the College Save website for more information.

Friday, April 23, 2010

Financial Literacy Conference

Yesterday I attended the Financial Literacy conference which was put on by ND Jumpstart

I will be having future posts on information presented.

Again it was stressed how important it is to start teaching financial literacy in school.

Wednesday, April 21, 2010

Recap of the book "The Power of Half"

The Power of Half by Hannah and Kevin Salwen

Following is a short recap of The Power of Half, I have not read the book yet, but saw them interviewed on the Dave Ramsey Show tonight.

The Power of Half is a book by a daughter and her father. In 2006, when Hannah was 14 on the way home from a sleep over she noticed looking in one direction, a homeless man and the next direction was a man in a Mercedes. She told her father, if the man in the Mercedes didn’t have such a nice car, the homeless man could have a meal. Her father, said also if they didn’t have such a nice car.

Later that evening Hannah was getting upset about the situation and her mother asked “what do you want to do, sell the house?” And she said “Yes”. And they did.

They sold their house, bought one half the size and donated ½ the profits to a charity. They also try to donate half of their income to charities.

The book also talks about how to get your children involved in volunteering and donating to charities.

Tuesday, April 20, 2010

The Need for Financial Education

I have recently started volunteering for Junior Achievement. Business people go into classrooms and present lessons on financial matters. Each course is 5 sessions.

I have been to the current classroom two times so far. It is a fourth grade class. They are interested and receptive of the information but it is important to share this information.

Some comments from the students are: One said she wished you could go to one day of elementary school, one day of high school, one day of college and then make a billion dollars. I was talking about learning about this so they don't get into credit card debt when they get older and she made the comment about her parents being in debt.

Our last lesson was on starting a business. They had to come up with a business idea, location for it and resources they would need. Many of them had good ideas but I had to remind them that they would also have to find a way to make money to start their business. And the importance of having a business plan if they were going to a bank to get a loan.

Many college students think they will finish school and get a high paying job right away. They also don't realize all of the expenses they will have when they are out on their own. So much a month for mortgage or rent and car payments, etc may not seem like a lot but if you add them up and get quite a few they may get out of control.

Monday, April 19, 2010

Cutting a deal on Credit Card Debt

Sometimes if you have credit card debt, you can call the company and cut a deal to have them write off some of the debt. If you owe $1,000 and say you could pay $500-$600 now if they would forgive the balance.

One thing about doing this is that you would owe taxes on the amount that they write off.

Also, if you sell your house on a short sale (for less than you owe on it), you may have to pay taxes on the difference and in some cases the bank will come after you for the difference between what it sells for and what you owe on it.

Wednesday, April 14, 2010

Financial Literacy Month - Day 14

Here is Step 14 Expect the Unexpected

It is important to have 6-9 months of monthly expenses saved in case of job loss, medical expenses, etc.

Sunday, April 11, 2010

Saturday, April 10, 2010

Financial Infidelity

Financial Infidelity

Last night on the Dave Ramsey show the theme was financial infidelity. I had heard about on his show before and decided to search online about it today. I was surprised to find a number of references on it.

Financial Infidelity is Rampant

Lies may signal significant problems in the relationship. In the Harris poll, people who said they were happy in their relationships were far less likely to have lied or been lied to than those who were less happy. Nearly half of those who said they were "not satisfied" said they had lied or been lied to; only one in five of the "very satisfied" crew reported that they or their partner had been untruthful.

Talking about these issues, rather than trying to avoid them with lies, can help a couple work out their differences and create a plan that gives both what they need, McCurdy said. The saver can still be assured that the family is building financial security, while the spender doesn't have to delay all gratification.

The first way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it makes it possible for you and your spouse to go for long periods of time without sharing with each other how you spend your money.
I have recently seen a number of articles on the topic of "financial infidelity" -- telling lies about what you spend money on to your spouse or life partner, or keeping secret from him or her your ownership of a hidden stash of assets. Many experts suggest having one account together to pay all the bills and then each of you has a specified amount of money each month that you can spend how you want. Also, to have an agreement that you will check with the other person before spending over a certain amount.

It is also important that both parties have a say in the budget and are both involved in handling the finances. One instance when couples get in trouble is if one is given all of the responsibility of the bill paying and tries hiding some of the details when there is not enough money to pay all of the bills. If both parties are involved, they will both know what the situation is and can handle issues as they come up. But if one is handling the bills and the other is out spending not realizing they may be in trouble. Also, if the one that is in charge of handling the finances doesn’t want all of the responsibility, resentment can start building in the relationship.

The consensus view is that it is bad because it undermines trust in relationships. But I think that there is an added harm done by financial infidelity that is not as frequently noted.

Sexual infidelity not only undermines trust in relationships. It also undermines the efforts of those who engage in it of achieving true sexual intimacy with their spouses. It’s the same with financial infidelity. Those engaging in it not only risk seeing harm come to their relationships as a result. They also give up opportunities to achieve growth.

Studies show that money problems are one of the leading causes of marriage problems and divorce. I feel it is important to sit down and do your budget together and discuss how you are going to spend and invest your money. As with other marriage issues, communication is the key to a happy marriage and financial life.
So if you have been hiding financial issues from your spouse, it is time to confront them and get assistance to get back on the right track. The longer it goes on the harder it will be to fix.

Financial Literacy Month - Day 10

Here is Step 10 Set Your Priorities

It is important to figure out if things are a want or a need. Also, prioritze the expenses according to your values.

Wednesday, April 7, 2010

Financial Literacy Month - Day 7

Here is Step 7 Make Your Money Count

Yesterday I stopped at CVS and saved $51. I paid $35 out of pocket and got $7 in ECB. I will post more details and photo later.

Thursday, April 1, 2010

Financial Literacy Month - Day 1

April is the official National Financial Literacy Month; however the experts at Money Management International know that regardless of the day or month of the year you begin, the 30 step path will help you achieve financial wellness.
Step 1 Committment to Change