DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Bad Behavior: Men, Women and Credit Card Debthttp://www.dailyfinance.com/2013/05/22/men-women-credit-card-behavior/http://www.dailyfinance.com/2013/05/22/men-women-credit-card-behavior/http://www.dailyfinance.com/2013/05/22/men-women-credit-card-behavior/#commentsFiled under: , ,

women and credit cards
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Plenty of studies have shown that men and women think and act in different ways, but when it comes to credit card debt, both sexes demonstrate bad behavior.

NextAdvisor.com recently compiled research on men, women, and credit card debt that reveals that while women are more likely to carry balances on their credit cards, men are more likely to take out cash advances.

The study covered a single year in people's personal finance lives. Here are some of the ways credit-card-carrying men and women differ, and how their behavior can be damaging to their financial well being.
  • Using a cash advance. Cash advances typically carry a higher interest rate than other credit card transactions, yet over the course of a year, 15 percent of men took an advance. Just 12 percent of women did the same, making this one of the few areas where women behave better than men.
  • Carrying a balance. Sixty percent of women at one point or another carried a balance on their credit cards, but men aren't far behind: 55 percent carried a balance. Among other downsides, carrying a balance above 25 to 30 percent of your credit limit can damage your credit score.
  • Late fees. Twenty-nine percent of women paid a late fee, but so did 23 percent of men. Late payments don't just cost you cash on a single bill -- they also can cause your credit score to go down and the interest rates you pay to go up.
  • Making only the minimum payment. Forty-two percent of women sometimes made only the minimum payments, while 38 percent of men made the smallest possible payment some of the time. Minimum payments are structured so that it will take years and hundreds or thousands of dollars of interest payments to retire your debt.
  • Average debt. This is another area where women come out (slightly) better than men: Men carried an average of $12,953 in debt, while women had an average of $11,486.
On the other hand, some men and women are doing the right thing when it comes to money management:
  • Paid in full. Over the course of a year, 45 percent of men paid their credit card balance in full each month, and 39 percent of women did the same. Paying off your credit card balances can increase your credit score dramatically.
  • Comparison shopped for the best credit card. Thirty-seven percent of men have shopped around for the best card for their needs, while only 31 percent of women have compared cards. Comparing rates can save you money if you do carry a balance.
  • Pay their bills on time. Ninety-three percent of men said they paid their bills on time, as did 82 percent of women.
  • Check their credit report. Fifty-eight percent of men said they'd checked their credit report, compared to 49 percent of women. You should check your report annually to look for errors and ways to improve your credit score.
Is the playing field level?

According to NextAdvisor, women typically pay an interest rate that's 0.5 percent higher than men, regardless of their credit score and financial information. Still, with that working against them, women come out ahead when it comes to credit scores: The average credit score for a woman is 682 compared to the average score for a male of 675.

These latest statistics reveal that both genders have a long way to go to achieve an "A" in money management.

Gallery: Why Your Bank Thinks Someone Stole Your Credit Card

Test PurchasesBuying in the Bad Part of TownStuff You Might SellBuying CashOut-of-the-Ordinary Spending Behavior

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]]>credit card debtcredit reportcredit scorefinancial literacygender differencesinterest rateslate feesNextAdvisorspendingMichele LernerWed, 22 May 2013 05:00:00 ESTHow the Wisdom of Confucius Can Lead You to Financial Successhttp://www.dailyfinance.com/2013/05/13/confucius-asian-secrets-financial-success/http://www.dailyfinance.com/2013/05/13/confucius-asian-secrets-financial-success/http://www.dailyfinance.com/2013/05/13/confucius-asian-secrets-financial-success/#commentsFiled under: , ,

Confucian Secrets
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A 2012 Pew Research Center Report, "The Rise of Asian Americans," identified Asian Americans as "the highest-income, best-educated and fastest-growing racial group in the United States." In addition, according to the report, Asian Americans are more satisfied than the general public with their lives, finances, and the direction of the country, and they place more value than other Americans do on marriage, parenthood, hard work and career success.

Yukong Zhao
YuKong Zhao / Facebook
YuKong Zhao (pictured), an expert in China business and strategic development at Siemens, believes the secret to the success of Asian Americans can be found in the enduring messages of Confucius.

Zhao, who grew up in a Confucianism-influenced family in China, moved to the U.S. in 1992. His bicultural experience and deep understanding of Confucianism has led him to conclude that Americans can learn from Confucian values to improve their lives in a variety of ways.

Most noteworthy in the differences between Asians and non-Asian Americans is their outlook on life. "Americans have a short-term view of life and Asians have a long-term view," says Zhao. "This impacts everything about their lives, but is particularly important when it comes to money management."

Confucian Money Management Tips

Zhao's book, "The Chinese Secrets for Success: Five Inspiring Confucian Values, published in April, offers practical guidance for money management as well as other topics. In it he focuses on five Confucian values:

1. Determination for leading an outstanding life.
2. Pursuing an excellent education.
3. Thrift; saving for a better life.
4. Caring for your family.
5. Developing desirable friendships.

"All these values contributed to the resurgence of the Japanese economy after World War II and have helped develop the economic strength in Korea, Taiwan, Singapore, and Hong Kong along with China. On a more individual basis, these values have helped Asian Americans become a 'model minority' in the U.S.," Zhao says.

The thrift value, in particular, contains key lessons on managing money conservatively and wisely.
While the money tenets below are emphasized in many cultures and countries, they have been especially embraced in Asian cultures. Looking at them through the Confucian lens, Zhao offers an interesting way to frame one's approach to financial well-being.

Avoid debt. Zhao says Confucian values de-emphasize short-term gratification in favor of investment for your future and your family's future.

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"Chinese people take the long view of money, so even working-class people save money so that they have it later to invest," says Zhao. "Asians hang on to their cash and live within their means rather than taking on debt."

Zhao recalls reading a study that showed that 40 percent of Americans live beyond their means, with credit cards being a tool that enables them to do so. "A lot of Americans work just to pay the interest on their debt, but Asians follow the philosophy that it's better not to have any credit card debt. They pay for their cars with cash. About the only debt most Asians will take on is a long-term, 30-year mortgage with a low interest rate."

Save for the future. "A big part of the lunar Chinese New Year celebration every year is to have a fish dish which represents having a surplus all year," says Zhao. "It's a big reminder that every year you need to save money for the future."

Zhao says Asian American families focus intensely on saving for their children's education and for their own retirement. "In China, the savings rate across all income levels is 25 percent, but in the U.S., people save less than 5 percent of their income," says Zhao. Even working-class Asian American families sometimes pay cash for homes. They are able to do so because they have been consistently saving for their family's future needs, he says.

Be thrifty and spend wisely. "When I first came to the U.S., I lived in a basement and bought the cheapest food I could find so I could save money for my family to come here," he says. "It's very common for many Asian Americans to live frugally in order to save money."

Not only does the Confucian philosophy say you should save money, but it also emphasizes being wise about spending. Price isn't the only consideration: Quality figures prominently in the purchasing decision. Zhao says that's the reason, for example, you see many Asian Americans driving high-quality cars. It's not that they're drawn to buying a status symbol, he says; it's because they want to buy a reliable car that will last for the long term.

Teach your children about money. Studies show that American students consistently rank behind students in Singapore, Korea, Hong Kong, Taiwan and Japan in math skills. That's because Asian American families tend to place a lot of emphasis on following good money management traditions and avoiding American consumerism. It's a Confucian value to pass on knowledge from one generation to the next, says Zhao.

There is also an emphasis on learning math skills: "Students who aren't taught math don't know how to manage their money, either," he says. "They have no knowledge of the consequences of their money mistakes."

Think differently about your finances

"My goal with this book is to introduce Confucian values to a mainstream audience," says Zhao. "I think these values have helped Asian Americans weather the financial crisis better than other groups, so I want to share them with other Americans."

Saving consistently, avoiding debt, spending wisely and investing for the future are practices that have good results no matter where in the world they are followed.

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]]>Asian AmericanChinacollege savingsConfucianismConfuciusdebt freeFinancefinancial literacyfrugalityHong KongKoreamoney managementretirement planningsaving moneySingaporeTaiwanMichele LernerMon, 13 May 2013 16:22:00 EST10 Signs You're Headed for a Financial Meltdownhttp://www.dailyfinance.com/2013/05/13/10-signs-financial-disaster/http://www.dailyfinance.com/2013/05/13/10-signs-financial-disaster/http://www.dailyfinance.com/2013/05/13/10-signs-financial-disaster/#commentsFiled under: , , ,

Money signs- finances
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It's a common human trait to want to put your head in the sand and avoid facing the reality of your situation. But when it comes to financial matters, living beyond your means, incurring high levels of debt, and developing a bad credit profile can ruin more than just your bank account.

According to Corporation for Enterprise Development's 2013 Assets & Opportunity Scorecard, nearly half -- 43.9 percent -- of U.S. households are living on the edge of financial collapse, with almost no savings to support them in the event of a job loss or health crisis.

Here are some of the sobering findings from the CFED Scorecard:
  • Practically one-third (30.8 percent) of households don't have any savings account at all.
  • More than half (56.4 percent) of consumers have subprime credit rates, meaning they don't qualify for short-term credit at prime rates and are more likely to turn to a payday loan or auto-title loan.
  • Two out of every three college students graduate with student loan debt. The average debt load is $26,600.
How do you know if you're heading for a financial meltdown? Here are 10 warning signs.

Gallery: 10 Signs You're In Worse Financial Shape Than You Realize

1. Your savings account balance is zero2. You've paid more than one overdraft fee this year3. You're using credit card checks to pay your bills4. You spent more than your credit limit6. You never pay more than the minimum on your credit card bill

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]]>borrowing from 401kcredit ratingdebt collectionemergency fundfinancial disasteroverdraft feesoverspendingpayday loanspower of planningpowerofplanningMichele LernerMon, 13 May 2013 05:00:00 ESTThe Best Graduation Gift of All: Money Skills for Lifehttp://www.dailyfinance.com/2013/05/10/money-skills-children/http://www.dailyfinance.com/2013/05/10/money-skills-children/http://www.dailyfinance.com/2013/05/10/money-skills-children/#commentsFiled under: , ,

Graduation Day
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In her more than two decades as a wealth management adviser, Ellen Miley Perry has seen the differences between wealthy families who flounder and those who find the time to develop emotionally and financially healthy connections and to raise financially savvy independent adults.

"Family relationships are the most intense set of relationships anyone experiences," says Perry, the author of "A Wealth of Possibilities: Navigating Family, Money, and Legacy." "We're more reactive to each other, which makes things more complicated."

While it's tempting to blame family issues on money -- or the lack or abundance of it -- Perry has found that money simply magnifies personal and relationship dynamics that are already present.

"Wealth just takes your experiences and makes them larger," she says. "For example, if you tend to be a nervous person you may be paranoid if you become wealthy. If you're a kind person, as a wealthy individual you'll be kinder."

Raising a Financially Savvy College Grad Starts Early

Perry's advice on helping families flourish financially and emotionally applies to all, regardless of their level of financial achievement. Here are a few of her tips for raising financially responsible young adults.

1. Do some pre-college financial prep. "Wealthy families sometimes have trouble raising financially smart kids because those kids have had everything handed to them," says Perry. "I'm a big believer in kids having summer jobs and handling their own money. There's nothing like day-to-day lessons to teach you money management."

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Regardless of the family's means, Perry says, an allowance can be an excellent tool to teach kids about money, as long as the parents don't bail the kids out if they run into hardship.

"Don't tie the allowance to chores, either," she says. "Chores should be done just because that's part of being a family. Even if the family can afford to have help, kids should do their own laundry and have other real-life experience before they go to college."

When kids finally graduate college, parents need to establish guidelines as to what help they'll give and for how long. Many post-college students struggle to find a job that pays enough to cover their rent and student loan payments, but, says Perry, "if you don't experience hardship, you don't learn."

2. Cultivate connectivity. It can be tough to reconnect with post-college offspring, but it's easier if you have a strong connection from early childhood.

"There have been multiple studies done that show that no matter what your economic background is, the most important variable that will indicate how successful a child will be as an adult is how connected that child feels at home and at school," Perry says. "You need to develop strong communication skills, learn to listen and to see your children as they are rather than correcting their thinking."

The most successful parents are those who are "intentional" parents, focused on setting an example for their children. "If you want your kids to be compassionate people and good listeners, then you need to demonstrate those skills with them," says Perry.

As your adult children begin to make their way in the world, it's time to give them the space to make their own decisions while staying emotionally available to listen to them and to give advice when asked.

3. Let your older kids solve their own problems. Money issues notwithstanding, a common trait among loving parents is to help their kids manage every problem they encounter.

"One woman I know got a call from her 26-year-old daughter who was stranded after her flight was canceled," Perry says. "The mother told the daughter to wait for a few minutes, then called her back with a rebooked flight. The better response would have been to talk through the problem with the daughter, to generate ideas rather than to solve the problem."

Perry says solving problems for your kids, whether financial or emotional, sends the silent message that the kids can't solve the problem themselves.

The goal is to instill the opposite attitude in your children -- the skills and confidence to face financial roadblocks on their own.

Financial independence isn't just good for your kids as they reach adulthood, it's good for you. Not only will you have the emotional satisfaction of having raised a responsible adult, but you won't be shortchanging your own financial needs for retirement savings and other investments every time you bail out your 20-something "kid."

Gallery: 7 Top Money Tips from Scott Gamm

1. Ignore the minimum payments on credit cards.2. Use credit cards for one or two small expenses.3. Prepaid cards are stupid. Don't you forget it.4. Stop paying bank fees.5. Do yourself a favor and unsubscribe from store emails.

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]]>allowancechildrencollegeeducationemploymentfamilyfinancial independencegraduationjob searchmoney skills childrenmoney tipsSavingsStudent LoansMichele LernerFri, 10 May 2013 05:00:00 ESTVacation Bliss May Be Hiding in Your Forgotten Rewards Pointshttp://www.dailyfinance.com/2013/05/09/forgotten-rewards-points-frequent-flyer-miles-summer-vacation-savings/http://www.dailyfinance.com/2013/05/09/forgotten-rewards-points-frequent-flyer-miles-summer-vacation-savings/http://www.dailyfinance.com/2013/05/09/forgotten-rewards-points-frequent-flyer-miles-summer-vacation-savings/#commentsFiled under: , , , ,

People swimming at a hotel
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With summer vacation season approaching, the hunt for great travel deals has moved to the top of a lot of to-do lists. But as you're clicking around the Web for cheap flights and bargain hotel rooms, and crunching the numbers to see how much fling you can afford, don't forget to check for discounts that may be lying fallow behind the plastic in your wallet.

Forgotten rewards points and frequent flyer miles can make a summer trip possible when you thought you might be stuck at home.

According to the 2011 Forecast of U.S. Consumer Loyalty Program Points Value by COLLOQUY, a company that researches consumer loyalty programs, Americans earn about $48 billion of value in rewards points and miles annually. Yet of that $48 billion, about one-third -- $16 billion -- goes unredeemed. This includes rewards offered by retail businesses, airline and hotel loyalty programs, as well as credit card rewards programs.

Another study, this one by The Princeton Group and commissioned by Brian Kelly, "The Points Guy," showed that only 67 percent of people collect frequent flyer miles, and of those who do, 73 percent don't know how many they have. Another 27 percent admit that they have let some or all of those miles expire.

Surprise! You Can Afford That Trip After All

Thomas Nitzsche, media relations coordinator for ClearPoint Credit Counseling Solutions in St. Louis, recently logged on to a credit card account he rarely uses to find more than $220 in unused points he could redeem for gift cards, a check or a statement credit.

After that experience, he came up with the following rewards program tips:

1. Cash in early. In order to ensure that points don't expire or devalue over time, cash in points as soon as you reach a minimum threshold unless there's a true financial benefit to waiting for additional accumulation, suggests Nitzsche.

2. Keep tabs. Read the details of your points program. In the fine print, you may find that your rewards card has changed the spending categories that earn the most points on a monthly or quarterly basis. You may need to sign up quarterly for bonus cash-back programs. You'll also want to be clear on what actions might result in you losing your rewards. For example, on some credit cards, if you miss a payment, you could forfeit all your rewards points.

There are plenty of rewards points tracking apps. Here are five recently reviewed by CreditCards.com:
  • AwardWallet.com -- Free app that tracks travel, retail, and credit card rewards programs and sends alerts when miles or points are about to expire.
  • MileageManager.com -- For $14.95 per year, this app tracks account activity for airline, hotel, rental car loyalty programs, and credit card rewards; gives you an expiration summary and sends email alerts.
  • MilePort.com -- Free app that tracks travel loyalty programs.
  • Points.com -- Free app to track and trade points and miles between more than 100 loyalty programs; also lets you redeem to PayPal or for gift cards.
  • TripIt.com -- A free 30-day trial for the Trip It Pro app, followed by $49 per year, provides tracking and expiration alerts for frequent flyer miles along with consolidation of travel itineraries and text alerts for flight delays and gate changes.
3. Focus on cash. "A rewards program shouldn't convince you to make a purchase that otherwise doesn't fit your budget," Nitzsche says. "Gravitate toward rewards that allow you to credit your account with cash rather than forcing you to redeem for something you may not need, like products or limited retailer gift cards." Make sure the program helps you work toward achieving your overall financial goals, not ones set by the parameters of the rewards program.

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4. Don't be swayed by looks. "Cards that carry the image of your favorite sports team, university, or celebrity may not offer the best cash-back rewards program or interest rates," says Nitzsche. He recommends comparing rewards programs based on your needs and the type of benefits offered.

5. Don't change your spending patterns to max out rewards. Instead, make the card cater to your existing shopping habits. The best rewards card for you is one that offers the highest rewards on the types of purchases you actually make, so if you're not a frequent flyer, pick a card that offers the most points for gas or groceries rather than airline flights. Not only will this help you make the most of your credit card, it also keeps you from overspending on multiple cards to earn rewards.

Last but not least, don't let credit card interest kill the value of your rewards program. "Remember, if you can't pay off the balance each and every month, a rewards program is unlikely to benefit you financially due to the interest you'll pay," says Nitzsche.

Now, instead of scrounging behind the couch cushions for loose change, log on to your credit card accounts to see if any rogue rewards points are hidden away, waiting to help you upgrade your summer vacation.

Gallery: Tips to snag travel vouchers

The Currency of Free Travel - Ten TipsStick with one airlineTravel at peak timesBook multistop flightsLook for full loads

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]]>credit card rewardscredit cardsCreditCards.comFinanceFreefrequent flyer milespoints.comreward pointssave money on vacationSciTechtravelTripItvacationMichele LernerThu, 09 May 2013 12:12:00 ESTDon't Eat the Marshmallow! 4 Tips for Financial Self-Controlhttp://www.dailyfinance.com/2013/05/08/financial-self-control-tips-marshmallow-study/http://www.dailyfinance.com/2013/05/08/financial-self-control-tips-marshmallow-study/http://www.dailyfinance.com/2013/05/08/financial-self-control-tips-marshmallow-study/#commentsFiled under: , , , ,

The Marshmallow Test
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The "Marshmallow Theory," based on a landmark Stanford University experiment, has been used countless times to demonstrate the power of self-control in your financial and personal life.
The experiment followed children who were left alone with a marshmallow and told that if they didn't eat it they would get a second one 15 minutes later.

Some of the kids waited the full 15 minutes, some ate the marshmallow immediately, and others waited for a short period of time before eating it.

Years later, researchers tracked down the children and found that those with the willpower to wait to eat the marshmallow -- 1 in 3 of the test subjects -- grew up to become more successful adults than those who ate the marshmallow immediately.

Temptation Never Goes Away

Joachim de Posada, an author, motivational speaker, and adjunct professor at the University of Miami, has gotten a lot of mileage out of the marshmallow experiment. He's written three books based on the theory.

His latest -- "Keep Your Eye on the Marshmallow" -- teaches readers how to take responsibility for their own financial, career and personal success by keeping their attention focused on long-term goals rather than instant rewards.

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"One of the lessons we can learn from the marshmallow experiment is that among the 1 out of 3 kids that didn't eat the marshmallow, some already had willpower and some understood they needed to use different techniques to avoid eating it," says de Posada. "Leadership, like willpower, can be inherited, but it can also be learned through emotional intelligence."

While the children in the Stanford experiment resisted eating the marshmallow by turning their backs on it or distracting themselves by drawing on the walls, de Posada suggests that adults can use similar techniques (defacing property notwithstanding) to avoid the allure of instant gratification.

4 Ways to Artificially Boost Your Willpower

If you lack financial willpower (e.g., the wherewithal to save your paycheck instead of spending it right away), de Posada recommends the following workarounds to help you delay gratification.

1. Choose an accomplice. Let's say you have a goal of saving 10 percent of your paycheck until you have enough to cover six months of living expenses to stash into an emergency fund. If you can't do this on your own, de Posada suggests you identify someone whose willpower is stronger than yours either to keep your money for you or be the person to whom you are accountable.

"If you trust them, send them the money and tell them they can't give it back until you've reached a certain goal," says de Posada. "Or have your mother or your brother or a close friend call you every 15 days and ask you how much you saved or what you spent your money on during the previous two weeks."

2. Have your boss hide away part of your paycheck. If you work for a larger company, de Posada says you should have at least 10 percent of your income transferred into a 401(k) or other financial instrument before you ever see it. Just like the kids who looked away from the marshmallow, your money will be out of sight and out of reach.

3. Use a money planner. "You schedule your time with your iPad or your calendar, so schedule your money in the same way," says de Posada. "Give yourself orders that you need to follow in your planner, such as saving a specific amount each week."

Committing these money appointments to your calendar makes them more concrete, as opposed to vague, far-off goals.

De Posada suggests establishing your financial priorities as you would other activities, with the "A" level urgent actions that must be done today, such as paying a bill on the due date; "B" level tasks that are important but can be accomplished by a future deadline, such as reducing your debt by a particular amount; and "C" level long-term goals such as funding your retirement. He recommends checking your money planner weekly rather than daily.

4. Take action now for future rewards. Overcoming a bit of discomfort in the short term often accompanies actions that pay off in the long term. Investing in the stock market requires weathering the inevitable short-term gyrations and reminding yourself that over the long term the market has steadily risen.

"You need to understand who you are and your appetite for risk, but be aware that when you're younger you can be more aggressive in your investments," says de Posada. "While you'll feel more secure if you only invest in blue chip stocks, you may pay for that risk aversion with lower profits for your future security."

De Posada says the most important part of the marshmallow theory is to understand how you would react to the experiment.

"If you know intrinsically that you're a marshmallow eater, then find a technique to overcome that character trait," he says. "Recruit someone to help you or put systems in place that will force you to wait for that second marshmallow."


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]]>401kBuy and Holdfinancial planningiPadLong term investingMarshmallow TheoryStanford prison experimentStanford UniversityMichele LernerWed, 08 May 2013 12:28:00 ESTCan Congress Help Boost the Nation's Financial Literacy?http://www.dailyfinance.com/2013/05/04/Financial-Literacy-for-Students-Act-education/http://www.dailyfinance.com/2013/05/04/Financial-Literacy-for-Students-Act-education/http://www.dailyfinance.com/2013/05/04/Financial-Literacy-for-Students-Act-education/#commentsFiled under: , , , ,

Student and teacher poor grade
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Late last year, the SEC released a comprehensive report on the state of financial literacy in the U.S. It looked at numerous studies and surveys on the topic, and came to a rather depressing, albeit not surprising, conclusion: Both children and adults are failing.
  • In a 2008 Jump$tart Coalition survey, high school seniors (the most recent available) correctly answered less than half (48.3 percent) of the questions, an all-time low for the survey. College students fared a little better, answering 62 percent of the questions correctly.
  • Nearly 70 percent of the participants outright failed a quiz on basic money knowledge in a 2010 Northwestern Mutual Life Insurance study to determine Americans' general financial knowledge.
  • In the real world, Americans aren't doing much better than they are at taking money quizzes: 75 percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts, perhaps a result of their lack of financial literacy.

While most people recognize the importance of teaching personal finance, only four states require a minimum of one semester of financial literacy education and only 20 states require that the topic be taught within another subject area in order for students to earn a high school diploma.

Clearly, the state of financial education hasn't gotten much better since the recession -- a recent reminder that what we don't know can crush us.

Financial Literacy for Students Act

Sen. Kay Hagan (D-N.C.) aims to change the dismal record of educating children and teens about personal finance. Sen. Hagan, a former banker and current chair of the Subcommittee on Children and Families, recently reintroduced the Financial Literacy for Students Act.

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Under current federal law, individual school districts and states are left to create and implement financial literacy education. (When Sen. Hagan was a state senator in North Carolina, she passed a law to include financial education in North Carolina's high school civics courses.) The Financial Literacy for Students Act would create incentive grants for states that agree to provide financial literacy education in Title I public elementary and secondary schools. In addition, the bill encourages states to provide professional development for teachers so they can teach financial literacy.

"The Financial Literacy for Students Act was one of the first bills I sponsored after I was elected to the Senate," says Sen. Hagan. "I'm a former banker and have always believed teaching personal finance is critical. The experiences people had during the recession were a disastrous consequence of what people do when they don't understand the implications of taking out a mortgage, taking on student loan debt or credit card debt."

Are We Finally Ready To Learn Our Lessons?

The Financial Literacy for Students Act was introduced in 2009 and 2011 and died in committee both times. This time around, Sen. Hagan hopes to attach her bill to the reauthorization of the Elementary and Secondary Education Act, also known as No Child Left Behind.

"Last time around, there were a lot of other things on the agenda, so the bill stayed in committee," Sen. Hagan says. "But now I think the recent financial crisis has led a lot of people to believe that if we can do a better job educating our kids it will be easier for people to handle their finances."

Sen. Hagan says that no additional money would be required from the federal government if this bill passes because the funds would come from the existing fund for the improvement of education. States would need to apply for grants from that fund to support financial literacy education.

One change in the bill for this session of Congress is that it will encourage states to form partnerships with community-based organizations, financial institutions, and local businesses to carry out the required activities. The bill has been endorsed by Operation HOPE, Junior Achievement, the Council for Economic Education, North Carolina Council for Economic Education, and the American Bankers Association.

In a subcommittee hearing on financial literacy in April, both Republican and Democratic senators expressed support for financial literacy education. Sen. Mike Enzi (R-Wyo.), the ranking minority member and one of only two accountants in the Senate, said, "I'm here to tell you that I feel a new urgency about the importance of educating people about issues related to finances from a young age."

Sen. Hagan plans to seek bipartisan support for her bill when she returns to Washington next week. "Financial education isn't rocket science," she says. "We just haven't taught it in the past."

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]]>Council for Economic Educationfinancial literacyHealthKay HaganLocalMike EnziNo Child Left Behind ActNorth CarolinaU.S.Michele LernerSat, 04 May 2013 05:00:00 ESTWho Lies More About Dings, Crashes and Tickets -- Husbands or Wives?http://www.dailyfinance.com/2013/05/03/lies-about-cars-husbands-wives/http://www.dailyfinance.com/2013/05/03/lies-about-cars-husbands-wives/http://www.dailyfinance.com/2013/05/03/lies-about-cars-husbands-wives/#commentsFiled under: , ,

Car scratches
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Men and women already bicker about which sex drives better than the other. Now they have another topic of automotive contention: who lies more about dings, crashes, and tickets?

Well, now we have an answer: A recent survey of 1,000 married adults by Insure.com revealed that men lie more than women when it comes to the car, regardless of whether the issue is as minor as a tiny dent in the fender or as big as letting the insurance lapse.

Let's take a look five lies spouses tell.

The car got dinged? Wasn't me! While 35 percent of survey respondents said they blamed someone else even if it was their fault that the car got damaged, 42 percent of men had lied about it, versus only 27 percent of women.

Ticket? What ticket? More than twice as many men kept tickets a secret from their spouse: 16 percent of women had gotten a ticket that they didn't tell their husbands about, but 34 percent of ticketed husbands kept mum.

Must have been a hit-and-run. Wives may be just a little too trusting of their spouses: 23 percent said they knew or thought it was possible that their husband had been in an accident without telling them, even though 31 percent of husbands admitted that they had in fact hidden a car accident from their spouse. On the flip side, men are more suspicious of their wives than they should be: 38 percent of men said they think it's possible that their spouse kept a car accident secret, but only 17 percent of wives say they lied about an accident.

Of course, an accident may be tough to keep a secret if your car is damaged. But even if you get the repairs done before your spouse notices, the hike in your insurance costs will be pretty telling. Accidents will almost always cause your car insurance costs to rise; if you get a reckless driving ticket along with it, your rates could go up as much as 22 percent.

I don't recall forgetting to pay the car insurance bill. Twenty-three percent of men say they've kept silent about neglecting to pay the car insurance premium, while only 15 percent of wives say they didn't tell their spouse about the bill they forgot. In this case maybe a little nagging would be good; if your policy lapses, your rates are likely to go up by 6 percent when it's reinstated.

I'm sure the insurance hasn't lapsed yet. Twenty-one percent of men said they'd driven without car insurance without telling their spouse, while just 9 percent of women said they'd kept quiet about driving without insurance protection.

Gallery: The Best And Worst Vehicles For Under $30,000

The Best And Worst Vehicles For Under $30,000Best -Best -Best -Best -

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]]>auto insuranceCar accidentslies spouses tellmoving violationMichele LernerFri, 03 May 2013 05:00:00 ESTThat Was Awkward: Our Most Embarrassing Money Moments Revealedhttp://www.dailyfinance.com/2013/05/02/embarrassing-money-moments-revealed-survey/http://www.dailyfinance.com/2013/05/02/embarrassing-money-moments-revealed-survey/http://www.dailyfinance.com/2013/05/02/embarrassing-money-moments-revealed-survey/#commentsFiled under: , , , ,

Larry David
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There's a classic Larry David moment on "Curb Your Enthusiasm" when he realizes he only has big bills and won't be able to tip the valet parking attendant at a hotel. He swears he'll pay when he has a smaller bill, but clearly the guy doesn't believe him.

The moment resonates with many people -- probably because something like it has happened to them.

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It turns out that nearly everyone has had cringe-worthy moments when it comes to cash, and they happen in all manner of interactions -- between strangers, friends, co-workers and even family members, according to a new CouponCabin.com survey released Wednesday.

Nearly half of the survey's respondents (48 percent) said they have avoided someone or a particular situation that involved money because they knew it would be uncomfortable.

Painful Plastic Problems

The number one "most awkward money moment," according to the survey, was having a credit card declined. Forty-one percent of respondents said that it was the most unpleasant money-related experience of all. Even worse, it's a tough one to avoid unless you know that you're near your credit limit and check on your credit card's availability before you use it.

Other situations that people said made them squirm:
  • Feeling pressured to donate to a charity on behalf of a co-worker, family member, or friend. (Mentioned by 34 percent of respondents.)
  • Saying no to giving money to a panhandler or beggar. (29 percent)
  • Feeling pressured to chip in on a group gift at work, like for a baby shower or wedding shower. (25 percent)
  • Sharing salary/wage amounts with co-workers. (25 percent)
  • Splitting a dinner bill or check with a large group of people. (17 percent)
  • Figuring out a gift to get a partner for special occasions, like a first anniversary or a first birthday together. (14 percent)
Some of the embarrassing moments recounted by survey respondents include:

Gallery: Awkward: Our Most Embarrassing Money Moments Revealed

I caught a co-worker digging in my purse to find cash.

'Fess Up: What Money Situations Made You Cringe?

Whether you're on the winning or losing side in a money moment, it can be equally awkward. What's your most embarrassing money moment?


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]]>charityco-workersCouponCabincredit card declinedmoney problemspersonal financespendingMichele LernerThu, 02 May 2013 05:00:00 ESTWomen and Money Around the World: Saving, Struggling and Teaching the Kidshttp://www.dailyfinance.com/on/women-money-world-saving-struggling-teaching-kids/http://www.dailyfinance.com/on/women-money-world-saving-struggling-teaching-kids/http://www.dailyfinance.com/on/women-money-world-saving-struggling-teaching-kids/#commentsFiled under: , , ,

Melanie Stetson Freeman/The Christian Science Monitor via Getty ImagesTatiana Coelho (l.) and Rute Honrado chat with children in Rio de Janeiro, Brazil. Mothers in Brazil have been found to talk most often to their children about finances.
We all know that men and women behave differently in myriad ways, including when it comes to money. Visa's International Barometer of Women's Financial Literacy survey, conducted with 25,000 male and female participants in 27 countries, confirmed the point: Men and women have different financial priorities.

But it's not just men and women who differ in how they approach family finances. The study reveals some interesting findings that go beyond gender differences and reveal widely different priorities across countries and cultures, too.

For example, mothers in Mexico, Brazil, Bosnia and Serbia talk to their kids about finances more often than moms in any other nations. Mexican mothers, on average, have such conversations at least once a week during 41.7 weeks a year. Indonesian mothers talked to their children about money the least, averaging just 3.9 weeks a year. American mothers ranked eighth, talking to their kids about money management just a bit more often than once every two weeks.

The overall scores on Visa's Financial Literacy survey are based on rankings in individual categories including budgeting, emergency savings, frequency in talking to children about money, perception of young peoples' money skills, and the desired age for beginning formal personal finance lessons.

A Matter of Priorities

For many women, raising their children to be financially savvy is extremely important, particularly if they come from an economically stressful situation. More than likely, this is because the parents want their kids to be better off financially than they are.

Interestingly, the survey found that mothers, rather than fathers, spent the most time talking with their children about money management, budgeting, saving, responsible spending, and debt. On the other hand, men are slightly more likely to have a budget and emergency savings -- two key indicators of economic stability for a family.

Where Women Rock

Women in Brazil rank highest overall on the survey, primarily because they earned high scores for having a budget, talking to their kids about money, and starting their children's financial educations early. In each of those categories, Brazilian women were equal with Brazilian men.

The one area in which these women lag behind men is saving for emergencies, with more than half (51 percent) having no savings at all.

Mexican women ranked low when it comes to having a budget and emergency savings, but they came in third overall because of their emphasis on teaching their children about money management. All those money talks must be working, though, because only a minority of Mexican women thought that young people and teens lack money skills. Compare that to Australian women (No. 2 overall), 64 percent of whom think young people lack basic knowledge about money.

Where Women Lag

Women in Indonesia and Pakistan were ranked lowest for financial literacy overall and hovered near the bottom in every category. And on every score, Pakistani women lagged behind Pakistani men.

Women in Pakistan report having nearly no savings at all. And those who do don't have enough to last one month. Indonesian women ranked last when it comes to talking to their kids about money and near the bottom for having a budget and emergency savings.

American Women and Finances

So how do U.S. women rank?

Women from the United States are fourth among the top five countries in the world for overall financial literacy, with men and women in this country virtually on equal footing when it comes to financial savvy.
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But American women only ranked among the top five in one category: budgeting. While 53.4 percent said they follow a budget, 24.2 percent said they don't have a budget or they don't have enough money for a budget.

In 23 of the countries, a majority of women either have no budget or think they are unable to budget for economic reasons. In Canada, Russia and Belarus, women are more likely to have a budget than men.

Emergency Savings

Financial planners recommend that everyone have emergency savings of three to six months' worth of expenses, but in only a handful of countries did the majority of women say they had three months' of savings.

Women from Taiwan and China averaged the biggest savings cushions at 3.7 months, and women in Hong Kong, Canada, and Australia each had an average of three months' expenses or more in savings.

Men, on the other hand, have saved more for emergencies in all but one country: Australia.

The lack of emergency savings among women could be tied to the fact that in many countries, men control the household budget and women may not have any income of their own. In 22 countries, a majority of women have less than three months' savings or none at all. In Egypt, Serbia and the Ukraine, more than 90 percent of women have less than three months' savings. Pakistani women had the least savings, with an average of 0.7 months of expenses saved.

The survey's findings reinforce the dismal reality that we're already aware of: Most of the world's population is dangling by a financial thread, one that could snap far too easily. But as women across the world continue to talk to their children about finances, it's a trend that can be reversed in the future.

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]]>AustraliaBrazilCanadaemergency fundfinancial literacygenderKids and MoneyMexicoPakistanSerbiaUkraineVisawomen and moneyMichele LernerTue, 23 Apr 2013 05:00:00 ESTRiches to Rags: 5 Tales of Woe From Those Who Had It All and Lost Ithttp://www.dailyfinance.com/2013/04/18/riches-to-rags-tales/http://www.dailyfinance.com/2013/04/18/riches-to-rags-tales/http://www.dailyfinance.com/2013/04/18/riches-to-rags-tales/#commentsFiled under: , , , , ,

From riches to rags, a financial; story of loss and balance. Alamy
Alamy
Climbing the ladder of success rung by rung can be a slow process. But once you get there, the opposite experience -- sliding down the chute of economic despair -- can happen all too quickly.

Those in the financial problem-solving business witness this riches-to-rags pattern every day. From their vantage point, it's easy to see how anyone -- no matter what their background or financial means -- can let bad money habits lead them into hard times.

"Even if you earn a law degree or have a high rank in the military, that doesn't mean you necessarily know how to handle money," says Albert Guadiano, counseling director for the Consumer Credit Counseling Service of Greater San Antonio.

Facing financial failure is tough for anyone -- perhaps even more so for successful people who want to keep up the facades of their former statuses. But eventually, they must take action to avoid total disaster -- and often that action is turning to a credit counseling organization.

We talked to credit counselors (one who is a former debt collector) across the country, and came back with five extreme cases of clients who went from riches to rags.

Gallery: Riches to Rags: 5 Tales of Woe From Those Who Had It All and Lost It

The AthleteThe HeiressThe SoldierThe Business OwnerThe Actor

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]]>credit counselingdebtdebt storiesfinancial advicepersonal financeMichele LernerThu, 18 Apr 2013 11:34:00 ESTFinancial Literacy Quiz: 10 Questions to Challenge Your Money Smartshttp://www.dailyfinance.com/2013/04/18/financial-literacy-quiz-money-management/http://www.dailyfinance.com/2013/04/18/financial-literacy-quiz-money-management/http://www.dailyfinance.com/2013/04/18/financial-literacy-quiz-money-management/#commentsFiled under: ,

Alamy
April is Financial Literacy Month, and if there's one thing we know for sure, it's that educating Americans about how to manage their money can't start early enough. In a recent survey of international women's financial literacy commissioned by Visa, the U.S. ranked last among 27 countries when it came to the question: "To what extent would you say that teenagers and young adults in your country understand money management basics and are adequately prepared to manage their own money?" Only 17% of respondents expressed any confidence that young people starting out understand financial basics.

Of course, teaching by example is one of the surest ways to get kids to learn. Here are 10 money questions to challenge your basic knowledge about managing finances. Find an area you need to brush up on? Visit the new DailyFinance Learning Center, where you can take interactive courses on personal finance topics, including how to teach your kids about money.

Gallery: 10 Questions to Challenge Your Money Smarts

1. How much of your income should you spend on monthly housing expenses?1. (C) 31 percent.2. If you want to improve your credit score, which step is the best to take?2. (B) Pay down your debt to at least 25 percent or less of each credit card limit.3. How many times per year can you access your free credit report at www.annualcreditreport.com?



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]]>financial educationfinancial literacyFinancial Literacy Monthmoney managementMichele LernerThu, 18 Apr 2013 05:00:00 ESTGetting Paid to Lose Weight Really Workshttp://www.dailyfinance.com/on/financial-incentives-weight-loss-mayo-clinic/http://www.dailyfinance.com/on/financial-incentives-weight-loss-mayo-clinic/http://www.dailyfinance.com/on/financial-incentives-weight-loss-mayo-clinic/#commentsFiled under:

Money and diet - You can lose more weight with cash incentives
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Before you take another bite of that doughnut, think about this: If someone paid you $20 to put it down, would you?

A recent study by the Mayo Clinic found that weight-loss study participants who received financial incentives were more likely to stick with a weight-loss program and lost more weight than study participants who received no incentives.

In other words, getting paid to lose pounds really works.

Money as Carrot and Stick

The Mayo Clinic researchers worked for a year with 100 participants, ages 18 to 63, each of whom had a body mass index of 30 or higher, which is considered obese. The goal for each participant was to lose four pounds per month, up to a predetermined target.

The participants were assigned to one of four groups. Two groups got no financial incentives. People in the other two groups earned $20 per month if they met their weight goals. Then there was this twist: Participants in the incentivized group who did not meet their monthly goals had to fork over $20 per month to put in a pool. Those in the incentivized groups who stuck with the study for the entire year were eligible for a lottery to win the cash.

The results were significant: 62 percent of those in the incentivized group lost weight, compared with 26 percent in the non-incentivized group. Even those who had to pay money into the pool had a higher level of complete participation in the study than those who had no financial incentive to continue.

"The take-home message is that sustained weight loss can be achieved by financial incentives," said Steven Driver, MD, lead author of the study and an internal medicine resident at the Mayo Clinic.

How to Try This At Home

Consumers don't have to participate in an academic study to see if some cold hard cash convinces them to shed pounds.

HealthyWage.com has run weight-loss challenges tied to financial incentives for more than 100,000 individuals since 2009, according to the company. It has three programs that are structured similarly to the Mayo study, though joining will cost you:
  • The 10 percent challenge: Lose 10 percent of your body weight in six months and your $150 fee will be refunded, plus you'll earn another $150.
  • The BMI challenge: You can earn up to $1,000 if you move from a BMI of over 30 to one lower than 25 within one year.
  • The Matchup: Teams of five compete to earn cash prizes for weight loss, with a first prize of $10,000.
Of course, there's always the DIY approach -- ask someone you know play "banker" while you work to whittle down your waist. You just have to be sure to choose a person who is stern enough to make you pay up for every gained pound.

Gallery: Your Food Bill is Going Up: Ways To Save In The Grocery Aisle

1. Avoid prepackaged goods2) Make your own hamburger patties3. Read the fine print on the sticker price4. Be organic savvy5. Tap social media deals

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]]>financial incentives for losing weightlosing weightmayo clinicobesityMichele LernerWed, 10 Apr 2013 13:00:00 ESTIs She the Next Warren Buffett? ING and Girls Inc. Groom Girl Investorshttp://www.dailyfinance.com/2013/04/05/ing-girls-inc-financial-literacy-investment-challenge/http://www.dailyfinance.com/2013/04/05/ing-girls-inc-financial-literacy-investment-challenge/http://www.dailyfinance.com/2013/04/05/ing-girls-inc-financial-literacy-investment-challenge/#commentsFiled under: , ,

Grooming a girl Warren Buffett
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Coming of age during a drawn-out recession can certainly color a teenager's views about finances. In fact, the annual Junior Achievement Teens and Personal Finance Survey shows that the percentage of teens who expect they'll be able to support themselves before they are 25 has fallen from 83 percent in 2011 to 60 percent in 2013.

Those findings also reveal that 34 percent of teens are either somewhat or extremely unsure about their ability to invest money. It's an attitude that many kids -- especially girls -- never outgrow.

According to a 2011 MassMutual Financial Group study, only one-fourth of women felt confident in making their own investment decisions, while nearly half of men felt confident about their ability to make smart investment choices.

Building Confidence One Girl at a Time

ING U.S. and Girls Inc. have gotten together to close that confidence gap. They've created the ING-Girls Inc. Investment Challenge, which is giving young women in 20 U.S. cities real-world, hands-on investing experience.

While traditional personal finance classes offered in schools stick to the basics of budgeting and saving, and teach kids how to open bank accounts, they rarely rise to the level of teaching them how to accumulate wealth by investing.

That's where the ING and Girls program picks up. The investment challenge, now in its fourth year, let's teams of girls ages 12 to 18 create virtual $50,000 portfolios of investments to manage with the help of an ING volunteer. As an added incentive for the participants, they get to keep some of their virtual gains. After three years, two-thirds of any "profits" in the portfolio are paid by the ING Foundation to the girls in the form of college scholarships. The remaining one-third of the gains goes to the local Girls Inc. affiliate to support their programs.
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The program teaches the girls core investing principles such as asset allocation, diversification, portfolio turnover, and valuation, which are intended to encourage sound, long-term investing behavior. Two virtual teams will be created in September 2013 in addition to the teams that meet in person.

This year another shorter-term program was added -- a one-year version called ING-Girls Inc. Investing Matters -- where 19 teams of teen girls will manage $36,000 portfolios. In addition to learning about investing, saving, and philanthropy, the curriculum is designed to encourage the girls to consider a career in finance or economic education.

Girl Portfolio Power

In 2009, when the program began, The ING-Girls Inc. Investment Challenge was named by the Clinton Global Initiative as one of 13 programs that "will improve the lives of girls and women."

The first cycle of the challenge involved teams of girls in New York City, Denver, and Los Angeles and Alameda counties in California. When the challenge ended in 2012, all four teams had increased the size of their portfolios by between 31 percent and 55 percent -- remarkably better than the overall market during that period -- and earned scholarships of between $15,500 and $25,000 per team.

According to Bindu Patel, AVP of ING U.S.' Mutual Fund Advisory Group and governing board member for the Girls Investment Challenge, that performance was very encouraging.

During the three-year annualized period ending Feb. 29, 2012, the domestic equity market as measured by the S&P 500 Index returned approximately 25 percent and the international equity markets as measured by the MSCI EAFE index generated returns of approximately 20 percent. The Barclays U.S. Aggregate Bond Index, a broad measure of the fixed income markets, returned approximately 7.52 percent for the same period.

"Compare those index returns to the teams' portfolios, which were guided by an individual team investment objective, that ranged between 70 percent and 90 percent allocations to equity and the remainder to fixed income vehicles -- they fared pretty well," Patel says.

Sounds like these girls really could be the future Warren Buffetts of the world.

Gallery: 5 Businessmen Who Could Compete With Bruce Wayne

Steve BallmerWarren BuffettCharlie MungerTim CookLarry Ellison

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]]>college scholarshipsFinanceFinancial LiteracyfinancialliteracyGirls IncING DirectInvestingMichele LernerFri, 05 Apr 2013 09:29:00 ESTIn Hard Times, People Who Grew Up Poor Spend More, Cut Lesshttp://www.dailyfinance.com/2013/04/05/poor-vs-rich-spending-habits-/http://www.dailyfinance.com/2013/04/05/poor-vs-rich-spending-habits-/http://www.dailyfinance.com/2013/04/05/poor-vs-rich-spending-habits-/#commentsFiled under: , , , ,

PHILADELPHIA, PA - MAY 31: at Weso Mini Market, a Philadelphia corner store that stocks fresh fruits and vegetables as part of government program aimed at providing nutritional foods in some of the city's lowest income neighborhoods, on May 31, 2012, in Philadelphia, PA. Since 2009, Philadelphia has secured millions of dollars in federal funds to combat a surging obesity rate, now hovering around 66 percent for adults. Many dollars have gone towards bringing nutritious, affordable foods to neighborhoods that have traditionally gone without. (Photo by Jahi Chikwendiu/The Washington Post)
Jahi Chikwendiu/The Washington Post via Getty Images
What would your response be to the following questions?
  • Would you prefer to have $20 tomorrow or $30 a month from now?
  • Would you prefer a certainty of receiving $20 or a 60% chance of getting $50?
  • Would you rather have $40 today or $50 next week?
  • Would you rather be certain of receiving $30 or have a 40% chance of getting $45?
Now, consider how your answers would be different if you grew up in a wealthy family or if you came from a poor one.

Recently, a team of researchers from MIT Sloan School of Management posed these questions to subjects in a series of experiments to confirm the impact of "life-history theory," which says that your early life environment creates a pattern of behavior and responses that emerge even more strongly in adults during stressful times.

What they found was that the economic environment in which you are raised influences how you handle financial problems as an adult. No surprise there. What's eye-opening about their findings is how people from different walks of life act during times of economic crisis.

In a nutshell: Poor people spend more than rich people during difficult economic times.

Stress Response: Save or Spend?

You'd think that when times are tough, everyone's natural instinct would be to pull back on their spending and switch to save mode. It also seems logical to expect that those who grew up in families that struggled financially would be more cautious about money when faced with a weak economy.
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But when measuring the survey responses, Prof. Joshua Ackerman and his fellow researchers found that people who grew up in rich households were more risk-averse and reacted to an economic crisis by slowing their spending. Meanwhile, people who grew up poor were more impulsive and took more risks than those from wealthy backgrounds.

A supplementary experiment testing how recession cues affect decisions to save rather than to spend money from a paycheck gave the researchers similar results: Individuals from wealthier backgrounds chose to save for the future, while those from low-income childhoods opted to spend money to improve their current quality of life.

Why Do People Who Grew Up Poor Spend More?

On the surface, spending more when times are tough may just seem foolish, but Ackerman says that people who come from a poor background are behaving rationally according to their psychological instincts.

Ackerman explains it this way: If you grew up poor, your life history may lead you to think your chances of surviving a recession and coming out ahead are very low. Your expectation that your lifespan may be shorter -- again, based on your life history -- means that instead of taking measured steps to preserve the little money you have, you're more likely to take risks and spend money on things like jewelry or cars in order to show off and attract others to "promote reproductive success."

What Was Your Recession Reaction? Not everyone responds in the same way to stress, whether financial or otherwise. What has been your response to the tough economy? How do you think it was influenced by your upbringing?

Gallery: How A Family Of Four Manages To Live Well On Just $14,000 Per Year

Wagasky finds inspiration everywhere from the library to tips from readers on her blog.She stopped eating out and learned how to cook.Everything in the home is either hand-sewn and or made from scratch.The family swapped cable for Netflix and Hulu.She goes to the grocery store once per month, pays cash, and never goes over budget.


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]]>budgetingconsumer spendingMIT Sloan School of Managementpovertyspending habitswealthMichele LernerFri, 05 Apr 2013 05:00:00 ESTBuy Computers on Mondays, Books on Saturday and Stoves on Sundayhttp://www.dailyfinance.com/2013/04/03/when-to-buy-computers-books-appliances-jewelry/http://www.dailyfinance.com/2013/04/03/when-to-buy-computers-books-appliances-jewelry/http://www.dailyfinance.com/2013/04/03/when-to-buy-computers-books-appliances-jewelry/#commentsFiled under: , , , , ,

couple buying a computer monitor
Alamy
When's the last time you put "shop for a new [fill-in-the-blank]" on your calendar for a specific day? If you're like most people, shopping is done whenever you can squeeze it into your schedule.

You might want to re-think that approach, especially when it comes to purchasing big-ticket items like electronics, appliances and jewelry. Waiting even a few days to buy that new best-selling book can save you a few bucks, according to research from Extrabux.com, a website that helps shoppers find coupons, compare prices, and earn cash back on purchases, and camelcamelcamel.com, a Firefox tool that tracks prices.

Teaming up to determine the cheapest days of the week to shop online, they found out that, rather than doing all your shopping on, say, a Saturday, you can save money by strategically timing your purchase for a specific day of the week. Although the study was conducted at the end of 2011, the explanations for why some items are priced lower or higher on certain days of the week can help you research and time your next major purchase.

Monday: While the savings may only be a few dollars here or fifty bucks there, waiting until the weekend is over to purchase these products is a smart move.
  • Computers. According to the Extrabux experts, computer prices online are lowest on Mondays, at an average of $1,210.24 that day compared to a high on Fridays of $1,256.27. Their researchers say that computer and electronics manufacturers apply their discounts and rebates on Mondays and retailers pass those discounts onto customers that day, too.
  • TVs. TV prices are also lowest on Mondays, with an average of $1,101.52 compared to an average of $1,122.82 on Fridays, when prices are highest. Mondays are the biggest sales days for online shoppers, so retailers offer their best deals that day, the Extrabux experts learned.
  • Cameras. While TV and computer prices fluctuate during the week, camera prices are lowest on Monday and tend to rise and then stay high the rest of the week. The average low price on a Monday is $199.08, with the average high price of $207.53 on Tuesdays. The Extrabux team learned that cameras, because they are relatively inexpensive compared to computers and TVs, are put on sale on Mondays to entice buyers who are back at their computers after the weekend. The theory is that buyers will sign online to look at cameras and then perhaps buy other items, too.
  • Video games. Video games are also cheaper on Monday, with a low price of $67.17 compared to a price of $70.19 on Fridays. Unlike other items, video games stay low at the beginning of the week and then spike on Thursday and Friday, which are light shopping days online. The researchers at Extrabux found out that computer algorithms take over pricing for video games on the weekends, automatically lowering prices at one store when a competing store does, until they typically drop to the lowest price on Monday.

Tuesday: While prices aren't the absolute cheapest for anything on Tuesdays, prices tend to stay low for computers, TVs, and video games. So if you didn't fill your cart on Monday, you can still get prices nearly as low on Tuesday for those same items you were considering.
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Wednesday: Wednesdays are the day to buy your bling from online retailers, when the average price for jewelry drops to $218.26 compared to a peak of $220.49 on Saturdays. The Extrabux researchers were stumped by this one, with no explanation as to why jewelry prices dip midweek, even if only by a few bucks on average.

Thursday and Friday: You may want to step away from your computer toward the end of the work week. This is when prices tend to spike for computers, TVs, and video games. Prices rise to near-peak levels on Fridays for jewelry, too.

Saturday: If you're a bibliophile, you should order books online on Saturdays, when the average price dips to $12.72 from a peak of $14.33 on Fridays. The Extrabux experts speculate that book prices are lowest on Saturday because people have more time to read on the weekend and are looking for new books to fulfill their literary needs. They say retailers typically offer their lowest prices on days when more consumers are searching for their products.

Sunday: Online prices are lowest on the weekends for appliances because that's when consumers spend more time at home and work on home improvement projects. The average price for a major appliance drops to $806.83 on Sundays, compared to a peak price of $818.33 on Tuesdays. The Extrabux researchers determined that as the number of shoppers increases (as shown by Google searches), the average price decreases.

While the days-of-the-week shopping method won't guarantee you'll get the lowest price for a specific item, it's worth a try to see if you can save a little more by moving your online shopping spree from one day to another.

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]]>best dealsbest pricesbookscomputersExtrabuxFast MoneyFinanceshopping and dealswhen to buyMichele LernerWed, 03 Apr 2013 13:15:00 ESTCredit Score Dating Has Potential Partners Watching Their Assetshttp://www.dailyfinance.com/2013/03/22/credit-score-dating-romance-fico/http://www.dailyfinance.com/2013/03/22/credit-score-dating-romance-fico/http://www.dailyfinance.com/2013/03/22/credit-score-dating-romance-fico/#commentsFiled under: , , , ,

Sex and the 720 credit card score
Alamy
You know your credit score gets checked when you apply for a credit card, a job, an apartment, insurance or a loan. But these days, even potential dates may be asking about your fiscal health when they're checking you out.

While not every prospective date will come right out ask you for your FICO digits, some singles we talked to say they want to know a potential partner's financial status.

Websites such as Creditscoredating.com and Datemycreditscore.com have received plenty of attention in the media. Both are based on the idea that singles want to date others with an excellent credit score. In fact, the motto of CreditScoredating.com is "Good Credit is Sexy."

Practical Romance

The concept may sound a little mercenary, but since a low credit score can keep you from doing everything from buying a house to landing a job, singles interested in a finding a life partner may have a point.
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"I've never been asked about my credit score, but I wouldn't mind it," says Kathy (not her real name), a single woman from Maryland. "I think financial compatibility is critical at this stage in life, especially if there is even the flicker of a thought that the relationship could lead to something long term."

Kathy says a friend of hers rushed into the arms of a man who, despite his $100,000-plus salary, had a bleak financial picture. "She didn't want to believe his finances were as disastrous as they were, and he ended up costing her thousands and a hard lesson in protecting her assets," she says.

Credit counselors say many of their customers come to them because their romantic partners refuse to get married before they eliminate their debt. Some debt-laden clients have simply made pacts with themselves to get rid of debt before they wed.

We polled a group of five accountants and asked whether they would like to check a potential date's credit score. Most of them said yes, because "a responsible individual makes a better partner."

Naturally, not everyone is buying it.

You're More Than Just a Number to Me

One naysayer among the accountants asked "What do you want, a good person or a good credit score?"

"As much of a stalker as I am, I think it'd be creepy to know someone's credit score before a date," says J., a Washington, D.C.-area single. "There could be many contributing factors to a poor credit score, and I wouldn't want to rule someone out. In fact, if someone had a poor credit score because he's in over his head for, say, helping out a family member, I may want to hear that story, not rule out the candidate. And what about the person who's working really hard to improve their credit score? They may be more appealing to me than someone who grew up with everything handed to him."

Four Ways to Pretty-Up Your Credit

If you think your poor credit score is holding you back on the relationship front, you should be aware that there are no quick fixes. However, with time and attention to these four crucial financial steps, your credit can improve.

1. Start paying your bills on time. Your payment history is extremely important to your FICO score. Your creditors want you to show up on time as much as your date does.

2. Reduce your credit card use to 30 percent or less on each line of credit. Your overall income and debt doesn't matter nearly as much as making sure each credit card shows that you handle credit responsibly and not max out your credit cards. New relationships need a little air, and so do your credit card limits.

3. Don't open new credit accounts unless absolutely necessary. Just like dating around indiscriminately can earn you a bad reputation, opening several accounts will lower your credit score and so will numerous credit inquiries.

4. Check your credit report for mistakes. Accurate negative information will linger on your credit report like the memory of your worst date, but if there are mistakes that are lowering your score you should take steps to fix them.

While there's no guarantee that taking these steps will get you a dinner date, they will improve your financial appeal.

Gallery: 10 Common Money Problems That Need Fixing Now

1. 401(k)s2. Annuities3. Consumer communications contracts4. Credit cards5. Health insurance

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]]>credit scorecredit score datingFICOpersonal financerelationshipsMichele LernerFri, 22 Mar 2013 05:00:00 ESTNew Study Finds Women More Likely to End Up Poor Than Menhttp://www.dailyfinance.com/2013/03/19/women-poor-savings-planning-saveup/http://www.dailyfinance.com/2013/03/19/women-poor-savings-planning-saveup/http://www.dailyfinance.com/2013/03/19/women-poor-savings-planning-saveup/#commentsFiled under: , , , , ,

Women make less money than men and have poorer job choices
Getty Images
When it comes to saving and spending, the news is not good for women.

SaveUp.com, an online financial rewards program for saving and paying down debt, recently analyzed a representative sample of more than 20,000 of their users' savings and debt balances. The results reveal a sobering reality: Women are more likely than men to be poor during their lifetimes.

If you're surprised, you wouldn't be alone -- the women who took the survey are right there with you. When asked which gender they think is better at saving, more than 73 percent of women said females were.

The SaveUp U.S. Consumer Savings and Debt Report, released on Tuesday, finds that the average man has more in their 401(k), IRA, taxable investment accounts and CDs:
Men Women
Avg. 401k $50,632 $39,320
Avg. IRA $8,456 $4,916
Avg. Taxable Investment $72,390 $55,668
Avg. Certificate of Deposit $30,374 $7,459
Avg. Money Market Investment $11,157 $13,225







Source: SaveUp.com


Not only are men saving more in general, but they are saving more aggressively for retirement-related goals.

Men in the survey have 28.8 percent more than women in their 401(k)s and 72 percent more in their IRAs. The only type of account in which women average a higher balance than men is in a money market account -- a conservative, low-growth investment.


What's Behind the Savings Gap?

The simple answer to the question is "income disparity." According to the American Council on Education, depending on their race and where they live, women make between $0.57 and $0.77 for every dollar men make. This not only makes it harder for women to save than men, but their retirement contributions through their employer will be substantially lower.
Also Read: The $849,000 Penalty for Being Born Female

Another thing that may be holding women back is student loan debt. Women with student loans in the SaveUp study carried somewhat more debt from higher education than men who had student loans ($41,405 versus $39,104 for men).

Even in planning for the future, women shortchange their goals. According to a 2010 Harris Interactive poll cited by Forbes, when women were asked to put a dollar figure on the amount they were trying to save for retirement, the median was $200,000 compared to the men's median goal of $400,000.

Closing the Gap

One area of money management where women are doing better is in managing what SaveUp calls "non-asset building debt," which includes credit card debt, car loans and lines of credit.

According to the study, the average debt-bearing woman owes $34,645 versus $42,842 owed by the average debt-bearing man. Digging deeper into the debt numbers reveals that men have nearly one-third more in car loan debt than women.

In addition to keeping debt under control women can also improve their balances by increasing the amount they save for retirement. On that note, the picture for women is improving. A study by MassMutual showed that women are gradually increasing their retirement savings. And while in the fourth quarter of 2012 the average account balance for a female was 38.25 percent of the average account balance of a male, that's actually an improvement of 5.6 percent compared to a similar MassMutual study in 2010.

To close the gap between men and women, SaveUp recommends that women:

1. Negotiate for increased wages.
2. Increase their monthly savings goals.
3. Keep unsecured debt low.
4. Invest in higher education and career growth.
5. Increase their exposure to market returns on their long-term savings.

Gallery: The $849,000 Penalty for Being Born Female

Life expectancy: $200,000.Time off work: $80,000.Higher insurance costs: $44,000.Lower pay: $400,000.Pricier long-term care coverage: $125,000.

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]]>401kAmerican Council on EducationFinancegender gapHealthIRAMassachusetts Mutual Life Insurance Companyretirement planningSaveUpstudent loan debtwage gapMichele LernerTue, 19 Mar 2013 08:00:00 ESTEveryone Gets an 'F' in Car Insurance 101http://www.dailyfinance.com/on/car-insurance-policy-understanding/http://www.dailyfinance.com/on/car-insurance-policy-understanding/http://www.dailyfinance.com/on/car-insurance-policy-understanding/#commentsFiled under:

(Alamy)
Think you know your car insurance coverage inside and out? You're probably fooling yourself. According to a recent survey by Insurance.com, consumers who said they had an "excellent" understanding of their policy actually scored the lowest when quizzed about their car coverage with an average score of 26 percent.

Not that the less-confident among us are doing that much better.

When divided into subgroups by age, gender, geographical region, or self-described expertise, no group scored higher than 39 percent on the Insurance.com quiz. Across all test takers, the average score of 32 percent earned the equivalent of an "F" for everyone.

Those weren't essay questions they had to answer, either: We're talking about 10 multiple-choice questions here.

Slicing and Dicing the Results

There were 500 drivers who answered the 10 multiple-choice questions.

So who scored the best on the quiz overall? It certainly wasn't those who said they read their entire policy. They actually scored a quite low 28 percent, on average.

The people who nailed the quiz -- relatively speaking, with a still unimpressive average of 35 percent -- were those who said they had never read their policy at all.

Here's how results shook out based on gender, age and geography:
  • The average score for women was 35 percent, compared to an average of 27 percent for men.
  • Drivers ages 40 to 70 scored the highest, at an average of 39 percent, compared to young drivers age 18 to 29, who only got 24 percent of the answers correct.
  • Drivers in the South scored highest with an average of 34 percent. Drivers in the Northeast scored the lowest with an average of 29 percent, while those in the West scored 32 percent and drivers in the Midwest averaged 31 percent.

Test Yourself

Just two percent of test-takers got this one right:

"What does comprehensive coverage pay for?" (Select all that apply)
  • Damage to my car if I crash it
  • Damage to my car if an object falls on it, like a tree
  • Damage to my car if I hit an animal, like a deer
  • Damage to my car from a flood
  • Property damage to others if I cause a crash
  • Injuries to passengers in my own car
  • Theft of my car

About half of those who took the quiz (55 percent) got this one:
"If your car is totaled, what does gap insurance pay for?" (Select One)
  • The difference between the "actual cash value" of the vehicle and the amount owed on a car loan
  • The difference between the "actual cash value" of the vehicle and the amount you paid for the car
  • The difference between the amount owed on a car loan and the amount your paid for the car

More people (71 percent) knew the answer to:
"If a friend borrows your car and crashes it, whose insurance pays?" (Select One)
  • Your friend's insurance
  • Your own insurance
Curious to see how you'd fare? Take the test yourself here to see how your score compares.

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]]>auto insurancecar accidentcar insurancecar insurance coveragecar insurance policycollisioninsurance factsInsurance.comMichele LernerFri, 15 Mar 2013 15:25:00 ESTLiving Without Credit Cards: She Made It Work, and You Can Toohttp://www.dailyfinance.com/2013/03/13/living-without-credit-cards-debt-free/http://www.dailyfinance.com/2013/03/13/living-without-credit-cards-debt-free/http://www.dailyfinance.com/2013/03/13/living-without-credit-cards-debt-free/#commentsFiled under: , , , , ,

living without credit cards
(Photo Courtesy Liz Smiley)
Every time you make a plane reservation or rent a car or pay for concert tickets, you're asked to provide a credit card number. Liz Smiley, a social worker in Florida, provides a debit card number instead.

Smiley has lived without a credit card for more than four years, and she doesn't miss it a bit.

"I got my first credit card when I turned 18, and I just got used to using credit to pay for things," says Smiley, a single parent who was also the caretaker for her mother when she decided it was time to eliminate her debt.

Smiley had accumulated about $38,000 in credit card debt and was tired of spending all her income on credit card payments. She arranged a debt management plan through CredAbility, a credit counseling service in West Palm Beach, Fla., and repaid her debt in four years.

As part of her debt management plan, all of her credit card accounts were immediately closed. "I have to admit it was hell in the beginning, like going from eating lobster and caviar to a starvation diet," says Smiley. "It was really hard to say that I couldn't afford something and that I had to save for it."

Not Accepted Everywhere

Smiley got around the need for a credit card for flights and online shopping by using her debit card. But it wasn't always easy.

Some retailers won't accept a debit card unless it has a Visa or MasterCard logo. And many hotels and rental car companies only accept credit cards, or will place a hold for hundreds of dollars on a debit card until the customer vacates the room or returns the car.

That means you need to make sure you have enough money in your bank account to cover the bill. "I always had to make sure I had at least $150 or more extra in my checking account when I rented a car," says Smiley.

In spite of her $970 per month payments on her debt management plan, Smiley managed to save an emergency fund of $3,000 that she uses as a back-up to her checking account.

How to Make It Work

If you decide to live without a credit card, you'll need to develop plans to pay for everything beyond your normal expenditures, such as vacations, gifts, car repairs and unexpected health care needs.

First, establish your emergency fund with three to six months of living expenses. Most financial experts suggest that you have a set amount transferred from each paycheck to build up your savings painlessly.

For health care costs, Smiley set up a health savings account at work where she saves pre-tax money for out-of-pocket health care spending. "I needed a root canal and I had to tell my dentist that I didn't have a credit card and I didn't have enough in my HSA to pay him," says Smiley. "He let me make a down payment and then make payments slowly until I accumulated enough in my HSA to pay him in full."

Next, try some other tried-and-true methods like putting your change in a jar or putting cash in envelopes labeled for each savings goal. You can open a holiday or vacation savings account at a bank or just open an online savings account and give it a nickname so you know the purpose of the account.

You'll also need to figure out how to pay for things without a credit card, such as:
  • Layaway. Many stores allow you to hold an item and make payments until the item is paid in full.
  • Debit card. Make sure you read your debit card terms and conditions so you know if you are protected from unauthorized charges. In addition, you'll need to keep careful track of your bank balance or have a savings account tied to your checking account for overdraft protection.
  • Cash. Be careful not to carry too much. And remember to track your cash spending.
  • Checks. As long as you have identification, most retailers still let you write a check.
  • PayPal. Most online retailers, including many airlines, accept PayPal. You can tie your account directly to your checking account.
  • Pre-paid cards. You can load funds onto a pre-paid card and use it like a debit card. Check to be sure you don't have to pay high fees to use the card.
What About Your Credit Score?

If you don't have a credit card because you have bad credit or because you have an aversion to borrowing money, you should check your free credit reports at annualcreditreport.com and pay to get your credit score.

Your credit score is based on a history of credit repayment, so a lack of a credit history could hurt your chances of a mortgage loan approval or car financing.

If you plan to live on cash forever, this is not a problem, but if you think you'll be applying for a loan in the future, you may need to obtain a credit card and use it occasionally to establish a positive credit history.

Gallery: Heidemarie Schwermer - Living Without Money


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]]>can we make online credit cardcanwemakeonlinecreditcardcashcredit cardsdebitDebit Cardsemergency fundFinancelayawayliving without credit cardsloan without creditloanwithoutcreditpaying bills with credit cardpaying cashpayingbillswithcreditcardPayPalpowerofplanningSaving for a rainy daySavingsMichele LernerWed, 13 Mar 2013 05:00:00 EST