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Why Financial Literacy?

So here I sit, enjoying a tall cup of Joe as Financial Literacy Month comes to a close. Financial Literacy is my M.O. It’s what I live for!

If you read through my posts, you should already know the answer to this question:

Why should you be Financially Literate?

A study by the financial services company TIAA-CREF show that people with high financial literacy skills have double the wealth of those who do not. Also, those with low financial literacy skills pay a lot more for things.

So which would you rather be? The person who has more $$$ in their pocket, or the one who get’s the bum’s rush with their pockets empty?

http://business.time.com/2012/04/09/op-ed-improving-financial-literacy-is-essential-to-our-nations-economic-health/

Financial Literacy doesn’t need to make you fried! Listen up Ace, it just takes a little effort to really understand what you need to know!

Want to keep up with your financial literacy skills? Visit our website, where we post financial literacy tips regularly. Follow us on Facebook and Twitter! And stay tuned form my videos where all the pieces of the financial literacy puzzle falls into place.

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I’m Frank Money – Your very effective money detective.

Did you know that YOU are a MILLIONAIRE!

No really, you are. And so is most everyone you know?

How you ask? Well I’ve cracked this case wide open and this Talkin’ Money video explains it!

Through your lifetime, you will most likely earn a million dollars, and probably much more! Here’s a chart showing the Median Lifetime Earnings by College Majors. Just look at the return of a high school degree, versus an Associate’s College Degree and All Majors – it’s pretty amazing!

There was more to the caper than I bargained for – How are you gonna manage your money? It takes responsibility, and, being financially literate!

April is National Financial Literacy Month, Detective Frank Money’s favorite month, and there’s just a few days remaining! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Car Costs

OK, you need to get around. You need some wheels. But you don’t have a lot of Simoleons…er, Bucks…

A car is in order right? Well ask yourself – What is the real cost of owning an automobile?

I’m Frank Money, and I want to help you investigate everything about money – This Talkin’ Money video tells the story of one car owner who realized after the fact how much a car really costs.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Education ROI

OK Frank Money here, your very effective money detective – Listen up! We need to know the R-O-I of that higher education your pursuing?

What’s ROI you ask? That’s RETURN ON INVESTMENT.

Whether it be college, trade or vocational schools you INVEST your time as well as money to get an education. The end result is a career you hopefully will love with yearly earnings being the RETURN.

It’s important to ask yourself – what is the payoff for all your blood, sweat and tears…and cost. It’s time to do the math.

QUESTION 1 – What is the cost of your higher education.

QUESTION 2 – What is the average starting salary of a job in your area of study?

The blog fivethirtyeight.com has a great chart of understanding what the average median earning is for your degree and future job.

http://fivethirtyeight.com/features/the-economic-guide-to-picking-a-college-major/

QUESTION 3 – Now look the first two questions – how many years will you have to work to equal the cost of higher education. In other words, how many years of working will it take you to break even in paying back that cost of education.

That’s your ROI.

Life is about pursuing interests that you love, but it’s equally important to consider the path you take and whether the return will be worth it.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Savings Is Good For You!

I’m Frank Money, and I wanna help you investigate everything about money! For example, let’s investigate savings. It doesn’t take much detective work to understand that savings is good for you!

And here’s the good news for millennials – you are saving at a rate greater than any generation before you. Fidelity Investments found that 20 somethings are saving on average 7.5% of their income compared to 5.8% in 2013.

We’ve talked about retirement savings, and how important it is to start as soon as you can, along with the benefits of deferring taxes and saving on how much income tax you pay when you invest in a 401k, IRA, etc.

But what about non-retirement savings?

One strategy to employ is to set a goal of savings out of each pay check, and to make that ‘payment’ to you savings account, just like you pay your rent, phone and electric bill. Over time, you grow your savings account and let your money work for you.

What’s the amount you should save? well, it varies from person to person, but a good rule of thumb is to save 10-15% of your gross income (the amount you make BEFORE taxes are deducted) and use that for both your retirement accounts as well as non-retirement accounts.

It takes discipline, but getting used to a regular savings plan is something all millennials need to consider. It doesn’t take much detective work to understand  – SAVINGS IS GOOD FOR YOU!

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Dollar Cost Averaging

Frank Money here – the one you wanna know, to understand your dough!

Dollar cost averaging is an investment technique where you regularly buy a fixed dollar amount of a particular investment, on a regular schedule, regardless of its price.

Dollar cost averaging can be employed in purchasing just about any investment, though it is commonly used in purchasing stocks and mutual funds. It is also called Constant Dollar Plan.

We all know that the stock market goes up, and the stock market goes down. When to ‘jump in’ can be a difficult guess. A lot of people lose sleep over crazy market gyrations. This is why dollar cost averaging makes sense.

Let’s say you make regular monthly payments into your retirement plan. Or make monthly payments to yourself, in the form of savings. If you are investing in mutual funds for example, purchasing that fund at a monthly interval is cost averaging. Regardless of what the stock market is doing, you will buy more shares if the market is low and less shares if the market is high. Over time, you are buying an average, and this helps smooth out the fluctuations of the market.

For example, say if you make a $100 per month investment in a mutual fund. In January, the share price was $25, so you were able to buy 4 shares. In February, the share price was $33, so you were able to buy 3 shares. Then in March, the share price was $20, allowing you to buy 5 shares. Over the three months, you purchased a total of 12 shares for an average price of $25 each.

There is an old adage, that you can never time the stock market – in other words, the hope that you buy when market is low and sell when the market is high. Dollar cost averaging is a great strategy that helps your investment grow without having to worry about market timing.

Want to read more? http://www.dummies.com/how-to/content/how-to-use-the-dollarcost-averaging-formula-on-the.html

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Student Loan Debt

Student loan debt is a big issue. It is the most common way of funding your college and graduate school education – but doing so has become a ‘Game of Loans’. And since money is my game, you’ll also note it’s my name…. Frank Money that is!…See what I did there?

Before you start to think that getting a student loan is like an alliance with the House Lannister, understanding what you are getting into is an important first step.

In the U.S., the total outstanding student loan debt is around $1.2 trillion dollars with the average student debt for a grad being around $33.000 (2014 figures).

Come off of graduation day with $33,000 in debt that begins to require monthly payments shortly thereafter can definitely take the wind out of your sails – and prevent you from being able to purchase other things you might want, like a car or home.

Perhaps the biggest question you need to ask yourself is what is the return on my investment for the education you are financing. Will the degree you earned ‘pay off’ in giving you enough income over your working life to afford paying off the loan  it required -and- prove you with enough remaining $$$ to actually live the life you want?

As a general rule – try to avoid student loans as much as possible. Look for other monies, some of which is available for little cost to you in scholarships.

It’s sometimes daunting to understand all the facets of the ‘Game of Loans’ – but taking steps to investigate the rules of the game will prevent you from ending up with the dragons.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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What To Do About
Excessive Debt

Frank Money here – your very effective money detective….

If you have excessive debt, you should take a deep breath and realize you do have options.

Millennials in general have the lowest credit score and most problems managing their debt, compared to prior generations. But the good news is you have the lowest number of credit cards and lowest debt total compared to other generations.

However, the bad news is that you use credit cards a lot, and make a lot of late payments. Late payments mean lower credit scores.

Additionally, millennials tend to use costly alternative financial services, such as auto title loans, payday loans, pawnshops, rent-to-own loans and tax-refund advances.

Here are some steps you can do to help you get control of excessive debt:


1 – For credit cards, get a lower credit card interest rate as soon as you can – Call up your credit card company and ask for a lower rate.

2 – If you can’t make the minimum payments on time, call your credit card company and work out a payment plan.

3 – Allocate a larger portion of your income to reduce debt. This will be painful, but over time it will work.

4 – Limit your spending. If you don;t have a budget plan in place, now is the time. Limit your spending to only the essentials, and make paying off your debt the number one priority.

5 – Motivate yourself. Reach out to friends or relatives who have been through similar problems. This is a process, and it helps to have support during those low times.

Need more help? Then why not reach out to the NFCC (National  Foundation for Credit Counseling – the nations largest and longest-serving non-profit financial counseling organization.

http://www.nfcc.org/

So don’t fret the debt – instead take some steps to help yourself and sleep easier.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Good Consumer Skills

You really should apply good consumer skills to your purchase decisions. How so you say?

Just like my bloodhound ‘Shamus’ would do, it really just takes an analytical, systematic approach to decision making. In fact, you can apply this to lots of things in life.

Well think about it, do you really want to go through life spending more than you have to for things you buy? Or what about paying higher fees for things people get for a lot less, or even for free?

Here’s a step-by-step approach that really helps:

1 – Consider the item, thing or service you want.

2 – Look at several options for each – Let’s say three different ones.

3 – Consider to alternatives and consequences of each option.

4 – Make your decision…go ahead, pick one!

5 – Analyze the results of your choice. Did it turn out the way you wanted? What could your of done differently for a better result?

Congratulations! Now that’s applying good consumer skills. It applies to buying a car, renting a house, purchasing a smart phone, even buying an ice cream cone! In the end, if you think carefully about each purchase, you could save yourself big bucks!

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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Play Budget Mania!

Frank Money here – I find that Money is never around when you need it…and you never need it when it’s around. Understanding your spending and savings with a budget is the best way to get control of your money!

It’s time for Budget-Mania! Where everyone can learn about keeping a budget for their spending and saving. After all, if you don’t have a plan then good-bye budget and hello chaos!

Click here and download this PDF form to be on your way to your first budget!

As you can see by this form it’s really quite simple, but like everything else in life, you got to stick with it in order to succeed. It’s a game of pluses and minuses. Income, such as your take home pay from your job, is a plus. Your parents give you money for your birthday, plus. As for the minuses, that’s all of your expenses from car repairs to your monthly rent, from paying your health insurance to shopping for groceries.

Add up all of your expenses and subtract it from your income and you are well on your way to winning at Budget-Mania! That’s because you have a plan and that information will help keep you out of spiraling debt.

As my old friend Ben Franklin always said, “An investment in knowledge pays the best interest”.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

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