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/From War Refugee to Millionaire CEO: The Fearless Path of Helga Arminakhttp://www.dailyfinance.com/2013/06/11/helga-arminak-war-refugee-millionaire-ceo/http://www.dailyfinance.com/2013/06/11/helga-arminak-war-refugee-millionaire-ceo/http://www.dailyfinance.com/2013/06/11/helga-arminak-war-refugee-millionaire-ceo/#commentsFiled under: ,

refugee CEO Helga Arminak
Courtesy of Arminak & Associates CEO Helga Arminak
By Helga Arminak, as told to Michele Lerner

I was born into a war in Beirut, and I grew up in a war.

Every day there were bombs and gunshots, people being dragged in the streets off the back of cars, and just terrible sights. Sometimes we went to school and sometimes we didn't. Sometimes we went for weeks without any water or electricity.

Courtesy of Measurable Difference Cosmetics CEO Helga Arminak
Helga Arminak
My father owned a jewelry store, but it was destroyed during the war along with his entire inventory. Then a bomb hit our house, directly on my parent's bedroom. Our house was destroyed, but we weren't physically hurt.

We had some cousins in Los Angeles and so we were finally able to get a visa to come to the U.S. when I was 12. We stayed with them for a long time, but I was pretty miserable. We didn't have any money and I didn't speak any English, so I got bullied in school and I cried a lot.

By the time I was 16, I started working as much as I could. I sold Culligan bottled water over the phone, worked in a department store, and learned to be a makeup artist.

Most of what I made went to help my family because my father never really recovered from the war and hasn't worked since then.

$3,000 and a Vision

I was totally focused on work when I finished high school, but my mother told me to go to college. I worked full-time and went to school full-time and got my B.A. with a major in international business and a minor in economics. My first career job was at a global packaging company where I worked for nine years, opening up Asian and South American markets for them. I traveled and lived abroad a lot of the time.

Even though my professional experience was in the packaging business, my dream had always been to do something in the cosmetics field. So in 1999, I used $3,000 of my savings to start my own cosmetics packaging business.

Helga Arminak
Helga Arminak
It took about a year after I started the business to get my first order -- and even that order was a small one. My former employer didn't want me to compete with their business, so I had to fight off a lawsuit while I was trying to get my business going.

That entire time I was living off my savings. There were times I thought about giving up, but I didn't: My passion to create my own company helped me focus.

After three years, we were finally profitable. And today my company -- Arminak & Associates -- has about $80 million in annual sales. My family members are now all financially free because of my company.

Using Fear to Become Fearless

There were a lot of barriers to my success, but I think my experience as a child during the war and as a refugee actually helped me.

Fear holds people back. But that kind of experience makes you fearless. If you think about the worst that can happen, I already know. It already happened to me and to my family.

All I can say to anyone who wants to start a business is that they have to be completely focused on that business and not let anything distract them.

Making a Measurable Difference

I recently started my own cosmetics line called "Measurable Difference Cosmetics," an all-natural line made for women by women. We don't test the products on animals and they are drug- and paraben-free. We sell eyelash growth serum, lash-lengthening mascara, eyeliner, lip lotion, and cellulite cream, so women can do their own in-home treatments.

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But I also want to make a measurable difference in the world, too, so we started the "Look Good Feel Good" campaign. During the months of June, July, and August, my company is donating a portion of the proceeds from every mascara sold on our website or in a retail store to the Women's Refugee Commission. The commission helps improve the lives of women and children who -- like I once was -- are refugees around the world and in the U.S. It's not just refugees from war, but from a tornado or hurricane or anything that destroys a family's life.

Women like to look good and to feel good -- this campaign to support the Women's Refugee Commission is one way to fulfill both desires. I'm also starting an internship program with universities to help women succeed in business. The business world is a battlefield, but I think everyone who has the passion to start their own business can do it. Giving up is the easiest thing to do, but if you stay focused on winning and ignore all the daily distractions, you can achieve your goals.

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]]>cosmeticsentrepreneurself-made millionaireWomens Refugee CommissionMichele LernerTue, 11 Jun 2013 05:00:00 EST'It's MY Money, Mom': What to Do When Kids Get Cash Giftshttp://www.dailyfinance.com/2013/06/05/kids-cash-gifts-financial-education/http://www.dailyfinance.com/2013/06/05/kids-cash-gifts-financial-education/http://www.dailyfinance.com/2013/06/05/kids-cash-gifts-financial-education/#commentsFiled under: , , , ,

Cash gift
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Did your new high school graduate just rake in a few hundred dollars from congratulatory friends and family? Birthdays, bar and bat mitzvahs, and confirmations can also be quite lucrative for kids.

Money gifts can be both a blessing and a curse depending on the age of the recipient and the money personalities of the parents and their offspring. While clearly an infant has no say in what happens to funds given in honor of her birth, older children may balk at having their gift cash controlled by their parents.

"Parents need to train their kids as they're growing up, giving them a chance to make mistakes as well as the tools to help them learn from those mistakes," says Ellen Miley Perry, a wealth management advisor with Wealthbridge Partners in Washington, D.C., and author of "A Wealth of Possibilities: Navigating Family, Money, and Legacy." "If you've controlled your kids too much and they get a cash gift when they're old enough to control it themselves, it's like handing your car keys to a kid who's never learned to drive."

Perry says more affluent parents have a tendency to bail their kids out rather than letting them take the natural consequences of making a mistake with their money. But parents in families without a lot of money have an even harder time letting their kids control their own cash.

She recommends making the effort to not place your own emotional baggage about money on your kids. "It's hard to step back and let your kids make mistakes, but if you don't, you're taking the ability to learn out of the equation," says Perry. She recommends "Raising Financially Fit Kids" by Joline Godfrey as an excellent guide to teaching your kids about money.

Of course, it's one thing to let your kid blow a hundred bucks and quite another to watch them fritter away thousands of dollars of bar mitzvah dough.

Teach Your Children Wealth

Guy Penn, principal of G.M. Penn Wealth Management in O'Fallon, Mo., says the true gift of a monetary windfall is the opportunity for a teaching moment. "The process of prioritizing and discussing the various options is a gift more powerful than the actual funds being given," he says.

Penn recommends that parents list various options for gift funds into "buckets" such as short-term saving for fun and long-term saving for a car or college and then craft a plan together on getting there.

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"Take the child into the bank and sit down with a banker to talk about various options such as savings accounts versus CDs," he says. "This process will help ensure your child develops a sense of trust and comfort with the banking system."

The exact age when a child is ready to participate in investment decisions depends on your offspring's money personality and skills. You need to bear in mind the financial maturity of the child.

Rich Arzaga, Founder and CEO of Cornerstone Wealth Management in San Ramon, Calif., says that up until a child is 10 years old, parents should make all the investment decisions, based on their goals, risk tolerance, and time horizons. "After age 10, parents have an opportunity to include their children in how their money is invested. This can even turn into a family meeting."

Arzaga says that you can demonstrate how different types of investments work. Parents can suggest using a few different mutual funds, such as a bond fund, a large company fund, a small- or medium-cap company fund, and an international fund.

"The goal here is to learn how these different accounts act under different market conditions," says Arzaga. "This will allow children, and their parents, to learn that to some extent they can choose risk and potential reward based on the type of fund they choose. After age 10, and certainly by age 14, children appreciate this discussion, and seeing their own money move up and down."

Arzaga says the key is to keep your cool as parents when responding to up or down markets. "The goal is to remove as much of the emotion out of the investment process as possible," he says.

Teaching Fiscal Responsibility

Parents are the guardians or custodians of the money in different types of accounts, and legally have full control over most types of accounts until the child comes of age, typically at 18 or 21, depending on the state. "In fact, parents should view this as a fiduciary responsibility," Arzaga says.

One important exception is 529 college savings accounts, where the adult owner has the control and the children are simply the beneficiaries, Arzaga says. While most 529 accounts are owned by parents, grandparents or other relatives may open them as well.

Earnings in accounts under the Uniform Gift to Minors Act and the Uniform Trust to Minors Act are taxed to the minor, but up to $1,000 of the earnings are tax exempt. Up to $14,000 annually in gift transfers into these accounts and into 529 accounts are excluded from taxes.

Most banks offer special savings accounts for children with minimal deposit and balance requirements. You can also open joint accounts with your minor child, including a CD or checking account.

Become the Bank of Dad

Arzaga introduced his daughter to investing at an early age and matches her investments from what he calls "The Bank of Dad." He says that the out-of-pocket cost is a small price to pay to teach his daughter the long-term habit of savings.

Taking a collaborative approach rather than a controlling approach to financial gifts can set your child on a path to financial security.

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]]>529 plansfinancial literacyKids and MoneyMichele LernerWed, 05 Jun 2013 13:15:00 ESTDon't Let Money Fights Turn Your Honeymoon Into Divorce Courthttp://www.dailyfinance.com/2013/06/01/married-couples-money-fights/http://www.dailyfinance.com/2013/06/01/married-couples-money-fights/http://www.dailyfinance.com/2013/06/01/married-couples-money-fights/#commentsFiled under: , , ,

Divorce fighting
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It's June, which means that soon wedding bells will be ringing and cash registers ca-ching-ing -- elaborate celebrations have been planned and extravagant gifts have been purchased. But before you take your walk down the aisle, you should have a serious conversation with your mate about how you'll pay those reception bills.

Money is the No. 1 source of conflict for couples, says clinical psychologist Dr. Les Parrott. Couples fight more about financial issues than about their kids, their jobs, the housework, and their friends.
And those fights can be a sign of worse things to come. Parrott cites a study by the National Survey of Families and Households that found that couples who disagree about money once a week are roughly 30 percent more likely to divorce than couples who report fighting about finances a few times each month.

"It doesn't matter how much money you have, whether it's a little or a lot," says Parrott. "Money represents power in a relationship. It represents our dreams, our future, and our security, so it's no wonder that the fur flies around money."

The good fightParrott and his wife, Dr. Leslie Parrott, best-selling authors and founders of the Center for Relationship Development at Seattle Pacific University, recently published their new book "The Good Fight: How Conflict Can Bring You Closer" to show couples how to minimize conflicts over money.

Why Money Causes Fights

Studies show that couples argue because they have different opinions on needs versus wants. They argue about unexpected expenses, insufficient savings, overspending, and money lies.

But all those topics are simply what's on the surface, Parrott says. Dig deeper and you'll find that there's a complex tangle of emotions fueling money fights.

"When couples fight about money, they're really fighting about a perceived threat, such as feeling manipulated by their spouse," says Parrott. "They'll fight because one person tells the other that they can't buy an expensive brand of coffee, but underneath the argument is really about feeling threatened."

Feeling neglected is another trigger for money fights. For example, if a husband buys expensive golf clubs without consulting his wife, the wife may feel that her partner doesn't care about her feelings.

"If you can identify what you're really experiencing, you can become more articulate and help your partner understand what you're thinking," says Parrott. "The goal isn't to rid yourself of financial fights. Our goal is to teach people how to fight about money."

Dredging Up the Past

Parrott says that the first thing couples should do -- ideally before they get married -- is to discuss how money was handled in their homes when they were growing up.

"If you can see your partner in the context of their past and get a sense of the DNA of their money personality, you'll be able to develop empathy," he says. "One spouse may have grown up in a house where Dad handled all the money and no one talked about it, while the other may have been raised in a house with a stockbroker who talked about investing at every meal."

He recommends setting aside time for a monthly or weekly financial conference, even if it's just a 10-minute conversation about your savings and your goals.

For couples with severe money conflicts, Parrott suggests a role-reversal exercise. For example, if you love to shop and spend and your fiance is a saver, try going to a store and have your fiance decide to buy all three shirts he likes instead of just one, while you try to dissuade him. This can help both of you understand how your spouse-to-be feels about money.

Get to the CORE of Your Fights

The Parrotts have developed the "CORE" strategy that applies to all fights, including those about money. "If you can bring in one of the CORE elements into your fight, the other elements will follow," says Parrott.

C = Cooperation. A good fight is one that has two winners rather than a winner and a loser, says Parrott.
O = Ownership. Take ownership of your own role in the dispute.
R = Respect. The Parrotts say that money brings out our selfish sides. Money matters cause us to play the blame game and become disrespectful. "Once you have disrespect in a conflict, it goes off the rails," says Parrott.
E = Empathy. Empathy is the most important element of a good conflict, because if you have the capacity to understand each other you can keep the conversation focused on what matters most, says Parrott. "We wish we could give empathy to everyone as a wedding present," says Parrott.

Keep Talking

The Parrotts' book comes with a smartphone app called "Money Talks" that helps couples manage conflict when and where they need it. "The app helps you build the world's smallest social network, between the two of you," he says.

For engaged couples, the newly married, or long-term partners, Parrott says a professional consultation with a financial advisor is beneficial. "Depending on where you are financially, an advisor can help you set up your financial home together," he says. "It's important to get everything out on the table so there are no surprises, and a professional can help you with that."

If you can learn to handle your inevitable financial conflicts with empathy and calm, your chance of a lasting partnership can multiply faster than your investments.

GALLERY: 10 Money Lies That Could Wreck Your Marriage
Money lies


Photo Credit: Alamy

The Effect of Marriage on Your Money and Credit Rating

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]]>divorcefamily moneyfinancial literacymarriagemoney and happinesspowerofplanningsavingsexperimentMichele LernerSat, 01 Jun 2013 05:00:00 ESTMoney Management for Artists: How to Do Well Without Selling Outhttp://www.dailyfinance.com/2013/05/30/money-management-artists-musicians/http://www.dailyfinance.com/2013/05/30/money-management-artists-musicians/http://www.dailyfinance.com/2013/05/30/money-management-artists-musicians/#commentsFiled under: , , , ,

Artist finances
Alamy
Elaine Grogan Luttrull has spent a lot of time with artists during her stints at The Julliard School and the Columbus College of Art and Design.

She herself is an artist. She's also a Certified Public Accountant. As such, she does not accept the prevailing attitude among artists that commercial success equals "selling out."

In fact, by brushing off the financial side of a career in the arts, she says, artists are practically ensuring that they will be unfulfilled personally, professionally, and financially.

Luttrull now helps creative people incorporate financial smarts into their pursuit of the arts. She is the founding owner of Minerva Financial Arts, where she works at increasing financial literacy among artists and arts organizations through tax services, budgeting support, business planning, and education. And she is the author of the just-released "Arts & Numbers: A Financial Guide for Artists, Writers, Performers, and Other Members of the Creative Class."

Elaine Grogan Luttrull
Elaine Grogan Luttrull
Pipe Dreams and No Plans

Artists can be resistant to the idea of setting financial goals in their artistic careers. In fact, they practically celebrate their financial ignorance, Luttrull says.

"It has become socially acceptable to be numerically illiterate, even while actual illiteracy appalls. What's worse is that numerical illiteracy seems almost to boost the esteem of artists. They can't be bothered with numbers because they are too creative," she writes in her book.

As an example, she tells of working as a financial advisor to a musician who hid behind a common complaint of artistic types: Commercial success means you're selling out.

The musician wanted to spend his time playing his own cutting-edge music in smoky clubs, but instead spent every Saturday night playing Pachelbel's "Canon in D" and "Celebrate" at weddings.

The money was good, but he was miserable. He had to take the wedding gigs in order to pay the bills, and assumed it would always be that way because he'd never be able to support himself with just his own music.

The smoky-club lifestyle would have remained a pipe dream if Luttrull hadn't convinced the musician to formulate a formal financial plan.

She helped him develop a budget and build up a cash reserve. Eventually he was financially stable enough to stop playing weddings and to pursue a more creative music career. And now that he's a successful musician, when he's asked to play a wedding, he quotes an astronomical fee -- the kind of money that will really make it worth his while to abandon the pursuit of his own music for that weekend. And oftentimes he gets it, but not at the expense of his creative fulfillment.

Opening Creative Minds to Money

Artists need to stop seeing managing their finances as a bothersome chore and instead view it as a tool to help them more quickly and efficiently achieve their creative dreams, Luttrull says.

While everyone needs money management skills, the approach to achieving financial security can be different for creative types. Since they're not working at a typical 9-to-5 job with benefits, people who work in the arts should be particularly mindful of the necessity to stay on top of the money side of their creative ledger.

3 Ways to Paint a Prettier Financial Picture

Luttrull's book includes worksheets and concrete suggestions for goal-setting, budgets, and business plans. We asked her to share some tips to help creative types overcome their aversion to commonsense financial advice. Here are her tips:

1. Think of your emergency fund as a "freedom fund." Like everyone, you need an emergency fund to cover the lean times and to free you from the stress of worrying about how you'll handle a crisis.
For you, though, an emergency fund represents a different kind of freedom: the freedom not to take jobs that sap your creativity.

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"It's important to realize that taking care of your finances isn't just doing homework, it's connected to meeting your goals," says Luttrull. "You have to realize that having cash reserves isn't just a good thing financially; it also means you don't have to accept some job that you don't want to do. You're serving your ultimate goal by developing a budget."

Keep in mind that you may need a larger emergency fund than someone with a more traditional career path, because your path is likely to be winding.

2. Develop a three-tiered career portfolio. Luttrull recommends creating a diversified career portfolio, especially when you are unable to support yourself with your art.

Your career portfolio consists of focusing part of your time on your main creative pursuit and supplementing that pursuit with related paid or volunteer work. The third part of this portfolio should be flexible, part-time, or temporary work to help pay the bills.

Luttrull calls these three types of work:
  • Starring role: the one passion you have, such as to become a playwright, an actress, a choreographer or sculptor
  • Supporting cast: a job or volunteer pursuit that relates to your passion such as teaching music, reviewing plays, or working at a gallery or theater
  • Production assistance: a paying job that helps you pay your bills, preferably one that's flexible. It is not necessarily related to your passion, such as bartending or temp work in an office.

The combination of these three types of work can support you financially as well as spiritually and give you the opportunity to grow your chosen career.

3. Kick-start your endeavors with a clear project plan. "When I was teaching a financial planning class for people pursuing creative professions, one of my students was completely skeptical about the value of the class," says Luttrull. "About six weeks into the semester, he came up to me and said 'I get it.' It was a turning point for him when he realized that I was giving him tools that he could personalize and use to create the life he wanted."

That student opened a business account and developed a business plan to use on Kickstarter, a crowdfunding site. His project was eventually fully funded.

"Another client was working at a 9-to-5 job but was also an artist," says Luttrull. "She needed a business plan to get funding to work full-time on her projects, but she was using some text from her personal website instead of a real plan with numbers. I worked with her to develop a budget, to keep good financial records, and to articulate a business plan. Now she's left her full-time job, launched her business, and has three sources of funding."

Money Doesn't Hinder Authenticity

Achieving financial stability doesn't make anyone less of an artist or performer, says Luttrull. Ultimately, financial freedom makes it easier for artists to choose the projects that interest them most, which in turn fulfills them creatively.

Rather than sticking to their aversion to money, creative entrepreneurs can learn to control their money so it works for them. After all, "Money and creative success are not mutually exclusive."

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]]>artistsCreative classemergency fundEntertainmentFinancial Plannerfinancial planningJuilliard Schoolmusicianssecond jobselling outMichele LernerThu, 30 May 2013 10:36:00 ESTHow We Got Rid of $136,000 in Debt in 21 Monthshttp://www.dailyfinance.com/2013/05/29/paying-down-debt-136000-dollars-extreme-techniques/http://www.dailyfinance.com/2013/05/29/paying-down-debt-136000-dollars-extreme-techniques/http://www.dailyfinance.com/2013/05/29/paying-down-debt-136000-dollars-extreme-techniques/#commentsFiled under: , , , ,

getting out of debt
Courtesy Levi Ennis
By Levi Ennis, as told to Michele Lerner

When my wife, Jennifer, and I got married in March 2010, we thought we were OK financially, kind of like everyone else.

Jennifer was working two jobs, and I was working at one part-time job and looking for work. While Jennifer came into our marriage with a $20,000 car loan, I was the one who brought along a lot of debt: $20,000 for a car, $70,000 in student loans and $26,000 on a vehicle that I had co-signed on for my brother.

Yet even though we owed $136,000, we really weren't that concerned about our debt because it seemed normal to us to have car payments and student loans.

The Wake-Up Call

At our church, we signed up for a four-week mini introduction to Dave Ramsey's "Financial Peace University." At the first session we were asked to write down our total debt on a piece of paper.

There were five couples in the room, and the total debt for all of us was $300,000. We were pretty shocked that one-third of the debt in the room was ours.

I'd always been told that student loan debt was "good debt" and Jennifer thought that having a car loan was normal, but after this session we decided to get serious about paying it off.

The Plan

The first thing we did was write down a budget. We created two spreadsheets: one for our income and expenses and the other for our debt snowball. The snowball works by paying down one debt and then applying that payment to the next debt and so on until you're debt-free.

At first it looked like it would take us five to seven years to pay off our debts, but we decided to focus intently on it and eliminate it faster.

In the end, it took 21 months to pay off everything. That's because we devoted 70 percent of our income to paying off our bills.

First, we traded in both of our cars for one car. We carpooled for six months until we could save enough cash for me to buy a used car. Trading in those cars eliminated $21,000 in debt right away. That was a tough sacrifice for both of us because Jennifer loved her SUV and I loved my pickup truck, but it also got us off to a really big start.

Courtesy Levi Ennis
Courtesy Levi Ennis
Boosting Income

Jennifer and I have worked anywhere from two to six jobs at a time to bring in more money.

Jennifer works in human resources full-time and also serves tables at a restaurant for extra income. When we got married, I was driving a Zamboni machine, and then I got a full-time job in purchasing. I also teach private ice hockey lessons on the weekends to supplement my income, and coach a high school ice hockey team.

One of the more unusual things I did to bring in extra cash was to respond to ads on Craigslist looking for models. I was paid to be a "test dummy" so that techs could practice giving ultrasound tests.

We also started selling things that we didn't need, like a second computer, small appliances, and even my Xbox.

When we ran out of stuff to sell I started doing something a little more creative: dumpster diving for things we could sell. I would go around on trash pickup day and grab stuff that people had thrown out, like old TVs and a barbecue grill, and sell them on Craigslist to bring in extra cash.

Cutting Costs, But Not Fun

We made a pact to keep our expenses to less than 30 percent of our income, which meant we had to give up some luxuries.

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We didn't have cable TV or smartphones. We quit going to the movies and started borrowing them from the library. For entertainment, we'd go to parks, hike, go to the zoo on free admission days, and search for half-off deals.

We limited ourselves to $200 a month for spending money and $350 a month for food, including both groceries and eating out. Jennifer became an expert at clipping coupons and watching for buy-one-get-one-free deals.

I traded private ice hockey lessons in exchange for hotel points and airline miles. One parent didn't have the cash for the lessons, but he had millions of miles from his work travel. We were able to go to Seattle for our first wedding anniversary using those miles and go on another trip to visit Jennifer's family in Minnesota. We also went to Missouri for a long weekend by agreeing to take a time-share tour. We got a free hotel room and meal vouchers, and only had to spend an hour touring the time share.

The Payoff

Since April 2012 we've been debt-free. Once we were debt-free, and with God's favor and blessings, we kept up with our discipline and put that income into savings.

Now we have a contract on a house that's being built and we project that we'll have $80,000 in savings for the down payment and an emergency fund by the time it's ready in November. We're amazed that we're living debt-free and that we can buy a house when we're only 28 and 29.

Even more important to us, though, is how good it feels to have the security of money in the bank to tide us over if anything bad happens.

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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]]>CraigslistDave Ramseydebt advicefamily budgetFinancial Peace Universityfrugalitypaying down debtMichele LernerWed, 29 May 2013 05:00:00 ESTBad 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
Alamy
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
Alamy
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
Alamy
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
Alamy
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 EST