Month: April 2016

7 Reasons Why Your Personal Budget Is Failing and How to Fix It

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7 Reasons Why Your Personal Budget Is Failing and How to Fix It

When it comes to budgeting, I am a serial budget-maker. The number-crunching, the spreadsheets, the organization – I’m absolutely addicted. I won’t buy something as small as a Jolly Rancher, if it is not in my budget. However, over the years, I’ve nursed a love-hate relationship with my budget. I love how it organizes my funds, but I hate actually having to adjust my spending to meet what a spreadsheet tells me.

So, what’s someone with the best intentions, who is serious about budgeting to do when a budget isn’t working? It’s usually human error that makes a budget fail, and by investigating for possible gaffes, you might find out where you’ve gone wrong. Don’t fear your budget – just be vigilant and triple-check it for accuracy to ensure it works with you, not against you. And always keep an eye out for the major reasons that most budgets fail And always keep an eye out for the major reasons that most budgets fail.

Reasons Why a Budget Fails

1. It’s Too Restrictive

If you really want to save money, you might be tempted to strip your spending down to the bare minimum and challenge yourself to live with it. If you succeed, you’re going to show a hefty surplus at the end of the month. Of course, when it comes to the actual execution of a restrictive budget, you may be tempting yourself to max out your allotted funds, go over your spending limits, and finally toss your budget in the garbage because it “didn’t work.”

Solution: Pad your budget a little, and be ambitious as well as realistic. Cut back in a few areas at a time, rather than trying to completely overhaul your lifestyle all at once. While having a big surplus at the end of the month looks great on paper, if you can’t pull it off in practice, it’s an exercise in futility.

2. You Don’t Set Goals

It always helps to keep your eyes on the prize, and setting a goal can certainly help keep you motivated to stick to your budget. However, while “getting rich” is definitely an admirable goal, it may be too broad to really keep you on track when the going gets tough. The same goes for paying off all of your debt, or building up a down payment for a house.

Solution: Determine to save or pay off specific amounts in a given time period, and make sure these are achievable goals. Set other mini-goals along the way to help you stay strong when your money is burning a hole in your pocket. Then, reward yourself – modestly – when you meet them.

3. You Haven’t Adjusted It Since Day One

The thing about budgeting is that it’s all guess-work until you put it into practice. When you first draw up a budget, you can use utility bills, credit card statements, and pay stubs to develop the most accurate spreadsheet possible, but that doesn’t mean it’s all going to run smoothly once you put it into play. You’re going to have to make adjustments month-to-month, and if you haven’t touched your budget since you first formulated it, it’s probably not working out very well.

Solution: Revisit your budget on a monthly basis. You don’t have to give it a thorough overhaul – just devote a few minutes to adjusting for an extra windfall, new commissions, fluctuating utility bills, or anything else you didn’t plan for in the month prior.

4. Your Spouse Isn’t On Board

If you’re determined to maintain your newfound self-discipline and financial responsibility and your spouse isn’t on board, your budget isn’t going to mean much – especially if your spouse happens to be the big spender in the relationship.

Solution: If you haven’t had the dreaded big money talk in your marriage, now is the time. Sit down and discuss your financial philosophy, and make sure that you have all your numbers handy. Point out that a budget isn’t necessarily restrictive. Instead, it simply acts as a road map for your finances. When your spouse sees you won’t have to drastically alter your lifestyle to gain the positive effects of a budget, you might find you’ve got a more willing partner than you initially thought.

5. You Didn’t Plan for Emergencies

A budget is well and good until your dog breaks his paw, your car needs a new transmission, or your toddler needs his tonsils removed. Emergency expenses can completely derail a carefully detailed budget if you don’t account for them. Before you know it, your monthly money is gone before you’ve even paid your bills.

Solution: Build up an emergency fund. Aim to have at least six month’s of living expenses saved, and shoot for more if possible. If you don’t already have the funds to create one, devote a line in your budget to establish it. Consider it a personally administered insurance policy, and take comfort in the fact that your premiums are still yours to keep, even if you never have to file a “claim.”

6. You Didn’t Give It Enough Time

Count me as one of those people who gets impatient with her budget. I’m so excited to see the fruits of my labor that you can find me obsessively checking my bank balance and wondering if I’m a millionaire yet. However, the truth is that budgets take time, patience, and a bit of trial and error before they really produce significant results.

Solution: Consider your first few months a beta test for your budget. If they don’t go smoothly, simply make some adjustments and try again. It can take time for you to iron out the creases and for any real changes in your spending habits and financial management to take effect. Go easy on your budget – and yourself – and give it a chance.

7. You Really, Really Hate Budgets

Hey, a budget isn’t the be-all, end-all to financial management. If the sight of budgeting software makes you steam, explore other methods of managing your money without all the spreadsheets and columns.

Solution: Seek out alternative budgeting techniques that may work better with your lifestyle and income. Try withdrawing the cash you need for a week, two weeks, or a month at a time, and when it’s gone, it’s gone. If you stick to the rules, this kind of regimen can teach you pretty quickly how to conserve money. Research your options and test a few budget alternatives to find one that works for you.


If you stick to it, a budget is going to work. It can help you make smarter financial choices and give you a sense of control over where your money is going each month. However, budgeting is not an exact science. It takes work, tweaking, practice, and a lot of trial and error to make it effective in the real world. If yours is tanking, don’t ditch it. Just retool it and try again until you find the right balance.

Do you have trouble sticking to your budget? If so we can fix that. Book a consultation with me so we can get started.

Book with tracie


Do You Have A Saving Strategy?

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do you have a savings strategy

It’s never an easy question to answer. What should you save toward? Should you save only for retirement? Should you save for college first and then retirement? Should you save for college and retirement at the same time? Or should you adopt some other savings strategy? In a world where money may seem tight, picking and sticking with a savings strategy could be the difference between reaching your goals or not. But how should you prioritize your savings? Which savings strategy is best for you?

Most Americans have only certain resources —income and assets — to allocate to current needs and future goals. You should first sit down and think hard about your future goals, and be as specific as possible. What kind of retirement do you want? What type of college do you want your children to attend? You should have specific ideas of what you are saving for in light of available resources.

When thinking about those goals, analyze what would happen if one goal is funded but not the other. For example, I might first think that funding for my children’s college is my top priority. However, what would my retirement look like? Would I have enough time to save for my own retirement? Or, further, will I fund my child’s college only to find out that I will need to rely on them financially in the future because I hadn’t saved enough for my own support?

When thinking through your priorities, weigh the future issues that may arise from funding one goal but not the other or others. The fallback of retirement income is Social Security which may not meet your desired retirement lifestyle.  College, by contrast, can be financed through financial aid, loans, parent’s excess cash flow, children’s jobs, and the like.

As a rule of thumb, I suggest prioritizing in this order:

  • Save for your emergency fund;
  • Save in your 401(k) plan, or at least enough to get the full match from your employer;
  • Pay down your high-interest debt.

After that, funding your short- and intermediate-term goals and then any other goals, including retirement. Depending on your priorities, you might consider saving for your retirement goals before your short- and intermediate goals.

Deciding how you should prioritize your savings does require some number crunching so sit down and get started crunching.


Types Of Individual Retirement Accounts

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Yesterday we went over the basics of Individual Retirement Accounts, so today I want to tell you the types of IRA’s available to you.

Types of IRAs

When IRAs were first introduced, there was just one basic type, which was open to anyone with earned income. But since then, IRAs have evolved to include a number of variations:


There are two categories of tax-deferred traditional IRAs: deductible and nondeductible. If you qualify to deduct your contributions, you can subtract the amount you contribute when you file your tax return for the year, reducing the income tax you owe. If you don’t qualify to deduct, the contribution is made with after-tax income. The IRS website has resources to help you figure out whether, and to what extent, you can deduct your contributions.
Earnings on investments in a traditional IRA are tax-deferred for as long as they stay in your account. When you take money out—which you can do without penalty when you turn 59½, and are required to begin doing once you turn 70½,—your withdrawal is considered regular income so you’ll owe income tax on the earnings at your current rate. If you deducted your contribution, tax is due on your entire withdrawal. If you didn’t, tax is due only on the portion that comes from earnings.

You can’t contribute any additional amounts to a traditional IRA once you turn 70, even if you’re still working.


Contributions to a Roth IRA are always made with after-tax income, but the earnings are tax-free if you follow the rules for withdrawals: You must be at least 59½ and your account must have been open at least five years. What’s more, with a Roth IRA you’re not required to withdraw your money at any age—you can pass the entire account on to your heirs if you choose. And you can continue to contribute to a Roth as long as you have earned income, no matter how old you are. Contribution levels for a Roth are the same as those for a traditional IRA. However, there are income restrictions associated with contributing to a Roth IRA. Both you and your spouse can each establish your own Roth IRA’s.


If you’re married to someone who doesn’t earn income (for example, if your spouse stays home with small children), you can contribute up to the annual limit in a separate spousal IRA in that person’s name as well as putting money into your own IRA. Your spouse owns the spousal IRA, chooses the investments and eventually makes the withdrawals. A spousal IRA can be a traditional deductible, traditional nondeductible or a Roth IRA, as long as you qualify for the type you select.

“Deemed” or Sidecar IRA’s:

In some cases, you can make contributions to an IRA through your employer by taking advantage of a deemed or “sidecar” IRA provision. In this case, your employer deducts your IRA contributions from your after-tax earnings. All the rules for this account—that is, for contribution limits, withdrawal rules and so forth—are the same as for any other IRA. If you qualify, you may be able to deduct your contribution when you file your tax return.

You might find a deemed IRA helps you to save. After all, contributions are automatic, so you don’t have to remember to write a separate check to your IRA custodian and you won’t be tempted to spend the money on something else. But you might also find that your choices of IRA investments are limited with this option, since they will depend on which financial services company your employer chooses as custodian or trustee of the account.

In addition, if you’re not keeping accurate records of your deemed IRA contributions, you might inadvertently go over the contribution limit, which remains the same no matter how many separate IRA accounts you have. That could mean incurring penalties.

Which Is Better: Traditional or Roth IRA?

The answer to this question will vary from person to person. Assuming you’re eligible to contribute to a deductible, traditional IRA or to a Roth IRA, here are some factors to consider:

  • Current- year tax benefits—Depending on your income and employment, contributions to a traditional IRA may be tax deductible, which reduces your taxable income each year you contribute. But if you don’t need that tax break now, a Roth IRA can give you more flexibility since you can withdraw your contributions at any time without paying taxes or fees—and you can withdraw your earnings tax-free if your account has been open at least five years and you are 59½ or older.
  • Likely future tax bracket—If you’re young and likely to be in a higher tax bracket when you retire, then a Roth IRA may make more sense. But if you’re likely to be in a lower tax bracket after you retire, a traditional IRA is usually the better choice. With a traditional IRA, however, you are subject to minimum required distributions when you reach age 70½.

Traditional Versus Roth IRA

 Traditional Roth
EligibilityMust have earned income of at least the amount contributed, except in cases of Spousal IRA.

No regular contributions allowed in the year you reach 70½ and older. The ability to take a deduction phases out if you earn more than $71,000 as a single taxpayer or $118,000 as a couple in 2016.

Rollover contributions allowed regardless of age.
Must have earned income of at least the amount contributed, except in cases of Spousal IRA.

May not contribute if you earn more than $132,000 as a single taxpayer or $194,000 as a couple in 2016.

IRA and rollover contributions allowed regardless of age.
ContributionsContributions may be made any time up to your tax filing date for that year (April 15 for most people).

For 2016, the contribution maximums are $5,500 if under age 50 and $6,500 if age 50 or older.

You may roll over (transfer) proceeds from a TSP or 401(k) plan into an IRA. (This does not affect contribution limits.)
Contributions may be made any time up to your tax filing date for that year (April 15 for most people).

For 2016, the contribution maximums are $5,500 if under age 50 and $6,500 if age 50 or older.

You may roll over (transfer) proceeds from a TSP or 401(k) plan into an IRA. (This does not affect contribution limits.)
WithdrawalsTurning 70½ years old triggers required minimum distributions from your traditional IRA.

A 10% tax penalty will apply to any withdrawal—of contributions, earnings or both—before you reach age 59½, unless you meet an exception set by the IRS.
You never have to take required minimum distributions from your Roth IRA.

Contributions can be withdrawn any time without taxes or penalty.

A 10% tax penalty will apply to any earnings you withdraw before you reach age 59½, unless you meet an exception set by the IRS. Also, a 10% tax penalty may apply if you take a distribution from a Roth IRA that has not been open for at least five years.
Tax DeductionsContributions may be tax deductible, depending on your income and whether you are covered by a retirement plan through your employer. Contributions are not tax deductible.
Other Tax BenefitsEarnings are tax deferred if withdrawn when you are 59½ or older. Earnings may be withdrawn tax free as long as the account has been open at least five years and you are 59½ or older.

Contributions can be withdrawn any time without taxes or penalty
Investment ChoicesDetermined by custodian or trustee holding your IRA.

Most custodians or trustees allow firm-approved stocks, bonds, mutual funds and CDs.
Custodians and trustees for self-directed IRAs may allow investments in assets such as real estate, private placement securities and some collectibles.
Determined by custodian or trustee holding your IRA.

Most custodians or trustees allow firm-approved stocks, bonds, mutual funds and CDs.
Custodians and trustees for self-directed IRAs may allow investments in assets such as real estate, private placement securities and some collectibles.

Taking Money Out

One important thing is true of all IRAs: Taking out money early is discouraged. In fact, you generally cannot make IRA withdrawals before age 59½ without paying an early withdrawal penalty. The penalty is 10 percent of the amount you withdraw. There are exceptions, however, if you take IRA money out to meet certain medical expenses, purchase your first home, pay college tuition bills or for certain other reasons listed in the federal tax laws. In any event, before you make any early IRA withdrawals, you should check with your tax or legal adviser to be sure you’re following the rules. Even if you do not face a penalty, you will have to pay income tax on any withdrawal you make. The only exception is that you can take up to $10,000 in earnings from your Roth IRA tax-free to buy a first home for yourself or a member of your immediate family, provided you have had the Roth for at least five years. There is a reason why withdrawing early from your IRA is made difficult. These savings vehicles are specifically designed to help you set aside money for retirement, not for other purposes. By imposing penalties for the early use of these funds, the government hopes that most people will leave their money alone. That way, the money will have time to compound, and will be available to support you in your retirement. You should be aware, too, that unlike certain employer plans, you’re not allowed to borrow against your IRA balance.

Required Withdrawals

Just as the IRA rules generally discourage you from taking your money out too early, other rules require that you begin withdrawing from a traditional IRA no later than April 1 of the year following the year in which you turn 70½. And once you do start taking money out, you must take at least your required minimum distribution, or RMD, every year. You’re always free to take more than the minimum, but you must take at least that amount, or risk paying a penalty. If you fail to keep up with your RMDs, you face a penalty that can be pretty steep: up to 50 percent of the amount you should have withdrawn but didn’t, plus the income taxes you would have owed on that amount. Don’t assume that if your IRA is invested in mutual funds, and you’re receiving distributions from those funds, that you’ve automatically satisfied your RMD. It could happen, but you can’t count on it. However, if your IRA is an individual retirement annuity, which you would set up with an annuity provider such as an insurance company, your annuity provider assumes the responsibility for ensuring that the income you receive from your annuity meets your RMD.


Individual Retirement Accounts

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IRA Basics

Individual retirement arrangements (or IRAs) provide a way for you to set aside money for your retirement—for living expenses and to pay for the things you want to do when you have the time to do them, such as traveling or learning new skills. Like other retirement plans, IRAs offer tax advantages—specifically, the potential for tax-deferred or tax-free growth. Tax-deferred means you postpone taxes until you withdraw money later on. Tax-free means you owe no tax on your investment earnings at all, provided you follow the rules for taking the money out of the account. But in exchange for these tax benefits, there are certain restrictions. Here’s what you need to know about IRAs.

What is an IRA?

An IRA may be either an individual retirement account you establish with a financial services company—such as a bank, brokerage firm or mutual fund company—or an individual retirement annuity that’s available through an insurance company. Certain retirement plans, including a simplified employee pension (SEP) and a SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) may be set up as IRAs, though they operate a little differently from those you set up yourself. There is information about these types of plans in IRS Publication 590.

How Does an IRA Work?

Your IRA provider is the custodian for your account, investing the money as you direct and providing regular updates on your account value. Once your account is open, you can select any of the investments available through the custodian. So one key consideration in choosing a custodian is the type of investments you are planning to make.

To participate in an IRA, you must earn income, and you can contribute up to the annual limit that Congress sets. However, you can’t contribute more than you earn. So, for example, if your total earned income is only $2,500 for the year, that’s all you can put into an IRA, even though the contribution limit is higher.

If you’re divorced, you can count alimony as earned income. And there’s an exception to the earned income requirement for nonearning spouses, called a spousal IRA. This type of IRA also has contribution limits (see the Kay Bailey Hutchison Spousal IRA limit information in IRS Publication 590.)

You can put money into your IRA every year you’re eligible, even if you are also enrolled in another kind of retirement savings plan through your employer. If both you and your spouse earn income, each of you can contribute to your own IRA, up to the annual limit.

All IRA contributions for a calendar year must be made in full by the time you file your tax return for that year—typically April 15, unless that deadline falls on a weekend.

TIP: It may be smarter to spread out your contributions over the year, on a regular schedule. That way you don’t have to struggle to pull together the whole amount just before the deadline, or risk putting in less than you’re entitled to contribute. Another reason spreading out your contributions over the year may be smart is that it allows you to take advantage of dollar-cost averaging.

Join me tomorrow when I break down types of IRA’s


Managing Your 401(k)

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managing your 401k

Managing Your 401(k)

Managing your 401(k) takes work. Your administrator handles your portfolio’s actual transactions and the recordkeeping and reporting, but you decide when and how to reallocate and rebalance your assets.

Beyond keeping tabs on the performance of your portfolio, you will want to know your plan’s rules and procedures, and how much your plan and its investments are costing you. Take time to read your summary plan description (SPD), a document that lays out the rules, fees and procedures of your 401(k). Your employer should provide a copy of your individual benefit statement at least once every 12 month’s; though you may have to request it. You might want to review the document with your financial adviser or ask your plan administrator or human resources department about any details you would like clarified or explained in more detail. If you’re looking for guidance on the issues you should be concerned with, review the Department of Labor’s What You Should Know About Your Retirement Plan.

 Get a Handle on Fees

All 401(k) plans carry asset-based fees and expenses that have a direct impact on your investment return and your long-term financial security. The difficulty is that it can be hard to calculate what fees are costing you because you don’t pay them directly by writing a check. Rather, they are subtracted before your return is reported. Your account statement documents the amount of money you actually paid for various services and investments expenses, so be sure to check it out. In addition, most fees are explained in your summary plan document (SPD). You can also ask your human resources or personnel department for an explanation. You can access more information about 401(k) fees and charges from the US Department of Labor’s online publication, A Look at 401(k) Plan Fees for Employees.

 Monitor Performance

Although your fees cover the administrative services needed to manage your 401(k), it’s up to you to keep track of how your investments are doing. Refer to FINRA’s Evaluating Investment Performance section to learn more about different ways to measure performance, and how benchmarks such as key stock or bond indexes can serve as helpful reference points for assessing how well your portfolio is doing.

Read Account Statements

Another resource for managing your 401(k), and keeping tabs on how your investments are performing is your account statements. They contain details such as your account holdings, the change in value of your account from one period to the next, and other important account information.

Your employer must give you an account statement at least once every quarter. Many plan providers, however, send you statements on a monthly basis. You may also be able to access account information online.

The frequency with which you receive account reports might depend on how often your account is valued, or how often record keepers determine the total value of your account. Valuation also directly affects the flexibility with which you can reallocate your portfolio. If you decide to reallocate your assets, but your plan is valued quarterly, you may have to wait until the close of that period before your investments can be moved.

Don’t Forget to Rebalance
There’s a strong likelihood that over time your portfolio will get out of alignment. The investment allocation you started with (say 60 percent stocks and 40 percent bonds) will change—perhaps dramatically—and you will want to rebalance your asset mix. To learn more, including how target date funds can help you rebalance automatically, visit the Rebalancing Your Portfolio section of Key Investing Concepts.

Where To Look For Advice

You’re not alone when it comes to managing your 401(k). You’ll want to anticipate future returns as accurately as possible—and you may need the help of outside resources to do so. Luckily, there are a few places where you can look for advice.

  • Your Employer and Plan Administrator. Your employer and the 401(k) plan administrator may offer resources to help you with your financial planning. Many provide educational material and seminars about retirement planning and saving. They also may provide access to investment advice for retirement online or through a financial professional. Most of these services are available at little or no cost to you.
  • Online Resources. There are many websites that specialize in 401(k) advice. Most likely, these sites will ask you to provide information about yourself, such as the investments you own, your contribution rate, your financial goals, the age you would like to retire and the level of risk you’re comfortable taking.Online resources can offer a quick overview of your 401(k) portfolio. Just keep in mind that some of these resources will charge you for more personalized recommendations. And some sites sell their own investments, so you should weigh their recommendations against the profit they stand to make from your investment decisions.
  • Investment Professionals. You also may want to consult an investment professional for advice. Ask any potential broker or adviser about his or her background and how they earned their credentials. Also ask for an explanation of their fees. Most importantly, check their backgrounds. FINRA BrokerCheck tracks the credentials of licensed brokers and investment adviser representatives.

The SEC’s Investment Adviser Public Disclosure website also allows you to search for information about investment adviser firms registered with the SEC or state regulators. You also can view an adviser’s Form ADV on the SEC’s website or by contacting your state securities regulator.




How Children Develop Money Habits

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Most people get their money habits and skills from their parents and caregivers.  That’s why it’s important that parents and caregivers  have some background in how children develop, financially.

Ultimately, most adults seek financial well-being. Research shows that people feel they have financial well-being when they:

  • Have control over day-to-day, month-to-month finances;
  • Have the capacity to absorb a financial shock;
  • Are on track to meet their financial goals; and
  • Have the financial freedom to make the choices that allow them to enjoy life

By helping your children develop important behaviors, knowledge, skills, and personal traits – when they are developmentally ready – you can help put them on a path to financial well-being in adulthood.

Keep in mind that you’re teaching about money, on purpose or not

Your children are constantly watching and listening, so they might absorb more than you think. When you shop for a bargain, or splurge on a treat, or plan a special occasion, you’re showing your kids how you think about money.

Don’t worry too much about things you don’t know

Don’t feel confident about money matters? You’re in good company. Most people don’t. And that’s okay. Every day, you excel at something your children need to learn – whether it’s managing your time between work and home, saving money when you shop, or planning for a future event. Use these as teaching moments and you will be surprised at just how much your child learns, no matter what their age.

This year’s theme for National Financial Literacy Month is Envision a Financially Literate Future. That is why it is imperative that we teach our youth to be financially literate. During Financial Literacy Month let’s focus on the financial education of our nation’s youth. Comment below and tell us what you are doing to promote financial literacy during this month, and how will you keep promoting financial literacy once this month is over.


Today Is Financial Literacy Hill Day

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Today Is Financial Literacy Hill Day

‘Hill Day’ History

Financial Literacy Day on the Hill was introduced in 2003 by the Council for Economic Education, Junior Achievement and the Jump$tart Coalition, with the office of U.S. Senator Daniel K. Akaka serving as the original honorary host. Over the years, “Hill Day” as it’s come to be known, has evolved from a small gathering to a public event that attracts hundreds of participants. The location of the event alternates, each year, between an office location on the House of Representatives side and the Senate side of “the Hill.” This year, it’s in Hart Room 902 of the Senate Office Building.

U.S. Representative Rubén Hinojosa (D-TX-15) has served as honorary co-host on the House side since 2005, along with Representative Judy Biggert (R-IL-13). In 2013 Representative, Steve Stivers (R-OH-15) took over for Rep. Biggert following her departure from Congress.  U.S. Senators Daniel K. Akaka (D-HI) and Michael Enzi (R-WY) served as honorary co-hosts on the Senate side until Senator Akaka’s retirement.  U.S. Senator Jack Reed (D-RI) joined Senator Enzi as honorary co-host in 2014. The event features a free buffet lunch and the financial literacy exhibits from more than 60 non-profit, for-profit, and government entities.

Laura Levine, president and CEO of the Jump$tart Coalition, has served as the event emcee each year since 2004, representing the many coalition partners that participate.



How To Become Financially Literate (Revised)

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how to become financially literate

In honor of National Financial Literacy month, I decided to revise this list of things that you can do become financially literate. It is never too early or too late to become financially literate. NOW is the time to take control of your finances and put yourself on the road to financial security and freedom. Being financially literate allows you to earn more, spend less and obtain the things you really want.

Financial literacy is just another way to say you are financially fit. When you are financially fit, you are able to make informed choices about your finances, and you understand how those choices will impact your wallet and your life. Financially literate people plan for their future and can manage financial surprises, because they have trained for these situations by saving and planning. To enjoy the benefits of financial literacy, you have to train. You must obtain, information, knowledge and skills and apply them in order to make good choices in how you treat your money.

Do you ever think about how you treat your money? Do you save it, or spend it all the dame day you get it? Do you pay all of your bills first and hope that you have enough left over for your basic needs? No matter what you answered to these questions or what your relationship is with money, or what your level of financial literacy is, you can start right now to improve your financial situation and become more financially literate. Here are 10 things you can do to become more financially literate.

  1. Become familiar with your household finances.

    Know exactly how much money you have coming in and exactly how much you have going out. Review your online bank statements daily or weekly. Make sure to have a paper copy of that bank statement as well. Find out how much of your money goes in the bank and for what, other than your normal monthly bills, it comes out. Go through your monthly bills so you know exactly whom you pay each month for what and how much.

  2. Set a financial goal

    A while back, I wrote a post on setting financial goals. If you missed it, you can review it here. Setting a financial goal or goals, makes being financially responsible much easier. Decide on what your goal or goals may be and make sure that it is something that you want that you have to save for.

  3. Develop a budget and stick to it

    I cannot stress this enough. Once you know how much is coming in and going out and you have a financial goal, you will need to develop a budget that you can stick with.

  4. Watch television programs offering financial advice

    Some television channels that offer sage financial advice and planning are: CNBC TV, BLOOMBERG TV, Nightly Business Report, CNN, Fox Business News

  5. Read newspapers and magazines

    Read newspapers and magazines that are geared toward money matters. Some great publications are: The Wall Street Journal, Financial Times, The Kiplinger Letter, Barons, Fortune, Forbes and Money

  6. Use government resources 

    Uncle Sam, is making a marked effort to see that U.S. citizens have ample opportunities to learn about personal finance. Check out these websites for more information on financial literacy., here you can order up to 5 packets to start managing your finances like a pro. Financial literacy and education commission is affiliated with the U.S. Treasury Department, and its mission is to improve financial literacy by coordinating efforts between the public and the private is a website dedicated to teaching the basics about financial education. You can find assistance with things, such as, balancing a check book, investing in a 401(k), or purchasing a home.

  7. Set up a wealth building system

    Once you have set your financial goals, transfer money to accounts to automatically begin saving for those goals.

  8. Purchase Financial Tools

    Buy a financial calculator from HP, Texas Instruments, Sharp, Casio, or Canon. A financial calculator performs functions such as calculating loan payments, interest rates, percentages, amortization schedules, and cash flow. They also solve time-value-of-money calculations such as annuities, mortgages, leases, and savings.

    Invest in a financial dictionary, such as:

    • Dictionary of Finance and Investment Terms (Barron’s Financial Guides)
    • Standard & Poor’s Dictionary of Financial Terms
    • Webster’s New World Finance and Investment Dictionary
    • Wall Street Lingo: Thousands of Investment Terms Explained Simply
  9. Help Your Children learn

    Open a savings account and teach your kids how to save. Starting to learn about money management when young is key to improving financial literacy as an adult. Organizations likeJump $tart Coalition for Personal Financial Literacy, a national coalition of organizations, tries to improve the financial literacy of K-12 and college students through advocacy, research, standards, and educational resources.

  10. Start Now

    It is never too late to improve your knowledge about financial matters. Increase your knowledge about investing, estate planning, social security, how credit cards work, credit scores, saving for the future, social security, real estate, insurance, retirement, and taxes. Tackle one topic at a time. Start with the one you are most interested in learning and begin to build a solid foundation of financial know-how.

Becoming financially literate does not happen overnight, nor is it accomplished by reading just one book. It happens through education, practical experience, and life lessons.


Money Lessons For Kids

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Money Lessons for kids

Our youth have a deep lack of understanding when it comes to properly managing finances. I know my two older grandchildren want to run to the store every time they receive money. It has been a monumental uphill battle to train them how to manage their money. Statistics have generated a national movement to incorporate financial literacy into our education system and encourage parents to teach money management lessons at home.

Currently, only 17 states require a course in personal finance in order to graduate high school. It is imperative that young Americans learn financial literacy at home. Teaching kids how to appropriately manage their finances is essential so they have the necessary tools to become financially responsible adults. In honor of financial literacy month, I decided I would give you some tips on how I taught my children and how I currently teach my grandchildren about personal finance and money management.

1. Use Cash

While it’s true that credit and debit cards are more convenient, children are paying attention to how you manage your money. Using plastic doesn’t allow them to see the actual exchange of money for purchases. When you use cash,children will see the transaction take place, and witness the exchange of cash for goods or services. It drives home the point that in order to make a purchase you have to hand over your hard-earned cash

2. Bank/ATM Visits

A visit to the bank or the ATM is a great way to explain where money comes from. Children can see that the bank doesn’t just give out money; it’s a place to store the money you’ve earned, as well as the place where you can go if you need to take out a loan. Many local banks will be happy to provide a quick tour of their location, which will show your child how money is stored and transacted.

3. Grocery Shopping

If you are like me, you hate to take your children to the grocery store, because they want and beg for everything they see. Although I hate to take them, a trip to the grocery store is a great opportunity to begin building basic money management habits. Parents can show children the benefits of comparison shopping and how to stretch a dollar as far as it can go. While shopping together, parents can talk to their children about the price of each item and explain how using coupons can add up to huge savings. At the checkout counter, parents can have children count out the money needed for their purchases, as well as take part in the transaction.

4. Needs vs. Wants

This is a place where my grandchildren struggle. They feel that every want is a need. I have to constantly explain to them that just because they want something does not mean that they need it. One of the basis for good money management skills is the ability to distinguish between wants and needs. For example, people need food to survive, but children want a new toy or video game. This will build the foundation for appropriately managing finances as an adult and help kids learn to appreciate saving money for items they want.

5. Build A Budget

Explaining the difference between wants and needs to children can be tough. To help with this, have your child sit down with you as you create your monthly budget. Explain the purpose of accounting for all your monthly expenses and financial responsibilities first, and then see how much money is left over to save or to make the purchases you want. Parents can also help their kids create their own budget. Even though they don’t have many expenses, it is good practice for the future and allows them to see where their money goes as they spend it.

We all want our children to do well in life, and part of that hinges on them being able to effectively and appropriately manage money. If you aren’t teaching your kids about personal finance, now would be a great time to start.



Five Steps Toward Financial Wellness

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5 steps to financial wellness

 As noted yesterday, April is National Financial Literacy Month, and it couldn’t have come at a better time. Consumers are feeling more pinched each week with rapidly increasing gas and food prices and sluggish economic growth.  According to a recent survey by Career Builder, 77 percent of American consumers are living paycheck to paycheck.

Financial Literacy Month is the perfect opportunity for individuals and families to change their financial situation by learning about important financial matters, such as, creating and managing a budget, paying down debt while saving for emergencies, and creating achievable financial goals.  Here at, we care about your financial future. We are committed to bringing you the financial education you need to reach your financial goals.    

The following five steps will help you on the path toward financial wellness:

  1. Make a commitment.  Changing your relationship with money is not an easy task; it takes hard work and a strong commitment. Visit and take the pledge to start on the path toward financial security.
  2. Assess your financial situation – A simple quiz can help you understand your current financial position.  Knowing where you are today will help you determine the best path toward meeting your financial goals.
  3. Get organized – Getting your financial house organized is a great way to begin on a clear path toward financial wellness.
  4. Set priorities – Understanding the difference between needs and wants will help you establish financial priorities and set realistic goals.
  5. Live on a budget – Spending less than you earn is easier said than done, but a solid budget is the most important element of any successful financial plan.

Changing your financial habits and your relationship with money can be hard work, but the payoff is priceless. The important thing to remember while on your journey to financial freedom is to stay flexible. Revisit your financial plan often and make changes as needed.”



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