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Bang for the Buck

My daupriusghter and her husband are extremely frugal. They have “delayed gratification” down to a science. A walk through their Military Base apartment early on AND their now, newly purchased home in rural Iowa reflects their desire to live green and unattached to STUFF.

Their first major purchase upon returning to the U.S.A., was a car. They purchased a USED Prius. In recent weeks, they have had to jump-start it four times. Most cars have a trickle-drain of power from the car battery…the clock is just one example. It appears, they are SO green in their driving (or lack of driving) habits, that they do not drive the car enough to keep a charge on their battery. Her husband put snow tires on his BIKE and peddles the 6-blocks to work every day. My daughter purchased a “flat-bed” trailer for her bike for the 3-block trip home with groceries. So, for the most part, their car leaves the garage only on Sundays for a 6-block drive to church.

Awareness of my daughter’s car issues got me to thinking about the complicated role VALUES play in the purchase of a vehicle.  On the one hand, hybrid cars save gas but, only if you drive it. In the case of my daughter who rarely drives their Prius, I wonder if they will own the car long enough to realize a financial savings. Will the gas savings surpass the additional cost of purchasing a more expensive hybrid car…regardless of the fact that it was used? Share your stories of how your personal values effect your shopping habits when considering a big-ticket item such as a car?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Thanksgiving

thanksgivingturkeyThanksgiving is an incredibly important holiday.

Many (or most?) of us go through life always focused on a long list of things we need to do, things we want to have, places we want to go, and so on.  We go through our days focused on meeting the needs or challenges ahead. Even if what we’re focused on is generous or happy (such as getting the children to piano lessons or calling a friend on his birthday), it is still something we want to check off our list.  It’s almost like we’re always dissatisfied…We’re always striving, seeking, reaching. 

Thanksgiving helps us stop and focus on the good things that are already present in our lives.

That’s important.  Everyone has good things present in their lives; taking time to pause, breathe, and enjoy those good things helps us to feel satisfaction.  Why does that matter?  Why would the MoneyTip$ blog bother to devote space to Thanksgiving?  Because there’s a constant risk that dis-satisfaction will govern our attitude. Scarcity is a fact of life that means everyone, even the richest person around, will always be able to think of something more they might want to have or to do.  That ever-present scarcity and dissatisfaction can lead us to give up on managing our money, our time, and our other resources.  We might ask ourselves, “What’s the point of even trying? I’ll never have everything I want.”

If you’re reading this, there’s a good chance you’re a person who tries to manage money well. In order to continue trying, you need to see that it does pay off. Your effort has led to good things in your life. Focusing on the positive is the best way to pave the way for more positive movement in the future.  This week, stop and be thankful – to yourself and to all the others who have contributed to what’s positive in your life. The goal of managing money is to bring satisfaction, so bask in that satisfaction for a while.

 

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Chores…Get’er Done!

Child holding moneyIn May of 2013, I talked about the creative way some parents manage chores and allowances, using technology and PayPal.  At that time, there was an age requirement in order to have an account; this eliminated the youngest kids from that kind of reward system.

Since then, two new virtual systems have arrived on the scene. Ourly.help allows kids to be assigned tasks with deadlines. Before and after photos prove the chore was completed to your standards and once you approve the job, the pre-determined dollar amount is transferred to your child’s Gift Card. The child can then use the gift card to purchase things. The free program has a one-time processing fee for uploading funds to your kid’s account. Plan upgrades (for a yearly fee) include a savings account for managing the earnings and teaching money management skills.

Chore Monster, a totally free program, allows parents to schedule chores with point values. When you approve the job-well-done, the child receives the points. Kids can then “purchase” predetermined rewards such as money, pizza party or camping trip.

Both apps allow kids to review the assigned chores, possible rewards and how much they need to save to “purchase” the reward.

It is always important to set kids up for success: assign age appropriate jobs, teach responsibility and follow through, and help them understand that pride in a job well done is more important than money. For more tips on managing chores and children, check out The Science of Parenting blog.   

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Volunteers Needed

1040What are you doing in February, March and April? If you don’t have plans to dip your toes in the warm sand of a tropical beach I have a suggestion for you.  Find a local VITA program and volunteer to help.

VITA is the Volunteer Income Tax Assistance program supported by the IRS. A volunteer prepares returns for clients who have incomes at or below $54,000. If you like solving puzzles, then you would also enjoy the challenge of figuring out how to complete a tax return. Each one is different and because families don’t always fall into the Mom, Pop, and two kids definition, it can be challenging. Rewards come in the “thank you’s” and hand shakes of clients who have additional tax refund dollars to pay for other life expenses.

Training is available to help you certify. The IRS grants you exemption from liability for omissions or errors as long as you prepare returns within the scope of your certification. You can and should recommend a client take their return to a paid professional when it’s out of scope!

Volunteers also serve as greeters who schedule appointments and make sure the necessary tax documents and identification have been brought to the site.

A tropical island would be fun in the cold days of February, but you can generate a warm feeling inside by helping others.  To volunteer visit this IRS site: https://www.research.net/r/vitatcesignup

Joyce

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Pokémon Go free

Pokemon GoTwice this week, the topic of conducting a time study was discussed. The first was a friend needing to provide proof to her employer that addition help needed to be hired. The second was to decide whether the time and energy spent on a specific enterprise yielded enough return for the dollar spent, to justify continuing that activity.

During a recent youth event, I was amazed at the amount of time the kids spent on their smart phone.  As I looked through the photos of the event, I was disappointed to see nothing but the tops of their heads…they were all looking down at their phones. The planners of this event spent a lot of time and consideration into ensuring the actives were engaging and thought stimulating and until all the phones were collected and stored for the evening, there was no stimulating dialog occurring among the group.

Often times, the thing that annoys me most in others, is the exact thing that I am guilty of. This made me stop and think about the value I put on my time. When Pokémon Go first came out, it was a novelty that I admit to wasting some time on. Now, I only play that game when I am getting my daily walk. It occurred to me that prior to Pokémon Go, I listened to music or just enjoyed nature as I walked. Besides helping with weight management, my daily walk is a stress reliever. I can feel my blood pressure drop and my muscles relax as I walk taking in the sunrise or listening to my favorite instrumental music. During my last walk I tried to pay attention to those same physical conditions as I played Pokémon Go during my walk. The walk may have been entertaining but it was NOT relaxing or stress relieving. I think the best use of my time when walking is to be unplugged…Pokémon free.  

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Maybe After A Million Words

words“Maybe after a million words.” That’s a quote from Anne Sullivan in the movie, The Miracle Worker. The movie is about Helen Keller and the governess, Anne Sullivan, who helped Helen learn to communicate through sign language. In the scene Anne Sullivan is explaining to Helen’s mother that signing is like “baby gibberish” and that children do not understand language in the beginning but somehow learn it if they hear it often enough. Anne Sullivan predicted that Helen would be able to communicate, “…. maybe after a million words.”

That’s a lot of words!

I mention this because I believe financial literacy is like any other language and like any other language we need to hear it often to understand it. Young children learn best by observing and mimicking adults. Our children may not understand the concept of credit, money, or savings but they are very good observers and they learn from us. This process is called financial socialization and research by the Consumer Financial Protection Bureau indicates that children form personal financial habits as early as preschool and these attitudes often carry into adulthood.

So how can we help our children learn appropriate financial behaviors?

Parents are often the biggest and most positive influence of the financial socialization of their children. They can help their children by providing opportunities to learn and interact with money. Have children create shopping lists and help them to comparison shop and select grocery items. Include children in family financial decisions, planning, and saving for goals such as vacation and college education. You don’t have to have a lot of money, in fact children often learn best when choices are limited and they can observe the difference between needs and wants.

Consider reading to your child about money topics. Some good choices are; The Berenstain Bears’ Trouble With Money, (Stan & Jan Berenstain), or A Bargain for Frances, (Russell Hoban)

mary w kayak

A great resource for families and libraries is the Money as You Grow Book Club guide which provides several family activities and more reading suggestions. Also, childcare providers can learn about hands on lessons and receive Childcare training credit by joining us for “Munchkins & Moolah: Teaching Preschoolers to Share, Save and Spend” classes.

Mary M. Weinand is a Human Sciences Family Finance specialist who works with individuals to help strengthen their ability to make informed judgments and make effective decisions regarding the use and management of money.

Mary likes to save for rainy days but carries an inflatable kayak in the trunk of her car for the sunny ones!

 

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Everyone Can Save Money – You Can Too!

financial-fitness

Millennials are known for having huge student debt as they leave college. They have proven they can save money too.

According to a recent survey by Bankrate.com – 62 percent of those ages 18-29 are saving more than 5 percent of their income. Establishing the habit of saving is how this process gets started.  Gwen Cunningham from CFPB shared recently, “Don’t underestimate the power of savings.”

Reasons for saving include: rising health care costs, longer lifespans, and the uncertain future of Social Security.

Pay Yourself First just as if it is a bill you must pay; save money each pay period.  Direct deposit into a separate account is the easiest way to make that happen.  While you are doing that, establish your emergency fund and then build upon it.

Once the savings habit is established, you can start working on your retirement fund. Some experts suggest you save up to 18% of your income for retirement.  Over time, with compounding returns and employer matches you can accumulate substantial retirement savings.  In addition to employer plans, consider using other tax-advantaged options for retirement savings such as the individual retirement account IRA or Roth IRA to build your fund.  If you don’t have a retirement plan at work and don’t know where to start, a MyRA (offered through the U.S. Treasury Department) may be an option.  See our earlier post on the MyRA.

Keep up the saving to stay on the upside of your financial future.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Do Oral Contracts Work?

Oral contracts can be as binding as written contracts. However, the contract may be hard to prove without a written record. If your deal goes south, you may feel like you are the cartoon coyote chasing the road runner. Make it easy on yourself and write up an agreement.Business Meeting

Often, parties enter into agreements that are half-oral and written, based on a handshake and a few letters that may indicate some parts of the agreement without actually being contracts. In this case, the agreement is contained partly in the oral agreement and partly in the letters. It’s best to put all of the information relating to your agreement in one place — a single, clear, and complete written contract.

Some types of oral contracts are always unenforceable. The following four types of contracts, which involve a high risk of fraud, must be in writing by law:

  • Contracts for the sale or purchase of land
  • Contracts for the sale or purchase of goods priced at $500 or more
  • Marital settlement contracts (a promise to do something in exchange for a promise to marry, such as a father promising the groom a job after the groom marries his daughter), including prenuptial contracts
  • Contracts that can’t be performed within one year of the time the contract is made.

Attack of the killer handshake

A written agreement is not final until signed – unless you indicate your agreement to the deal otherwise: say, with a handshake. Do not let an oral agreement sneak up on you by saying that you agree to a deal before you are actually ready to sign it.

Message to take home: Even attorneys can have trouble understanding what they are doing without a written, signed contract.

‘Nuff said – Get it in writing.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Delayed Gratification

abbyThe author for the Dear Abby column once shared a quote from her mom, “This is maturity: To be able to stick with a job until it is finished; to do one’s duty without being supervised; to be able to carry money without spending it; and to be able to bear an injustice without wanting to get even.

For more than a year now, my 4 year old granddaughter has saved a portion of her favorite treat, Skittles, “for emergencies”. Her Halloween candy lasted a good long time as she allowed herself one piece per day. Yesterday, at a picnic with friends, she took 2 drink boxes. Before her mom could object, she informed her mom that she saving one for an emergency. My daughter recently found a jar with half eaten tootsie rolls, re-wrapped and stored for later. One could think that her ability to delay gratification was a sign of maturity, BUT, when it comes to the candy Pez, her equally favorite treat…they are all gone within minutes of receiving them. I wonder if the fun in eating a Pez from its cute dispenser makes it more difficult for her to delay gratification.

When I visit with individuals who are struggling with credit card debt, we talk about ways to set themselves up for success. If you cannot resist buying fabric despite the fact you have a whole room-full waiting to be sewn into quilts…then don’t allow yourself to enter a fabric store. If the home shopping network entices you to buy things you don’t need, won’t use and can’t afford…then don’t watch it. If you are the weak link in your family finances, then put your spouse in charge of the money. The trick is to put barriers in places where you are at your weakest.

I wonder if my granddaughter would be better able to save her Pez if they were not kept in the fun dispenser. If the fun of shopping and the convenience of a credit card is the cause of personal debt, then maybe only cash should be used? Take an honest look at spending habits and be mindful about spending.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Hustle On The Side

talentA talented young man who is home for the summer, sent a letter to the area churches, looking for opportunities to earn some money as a substitute musician. As the only organist for my church, I quickly called and booked him for 3 weekends in June that I plan to be away for a wedding and two family reunions.

A neighbor is an amazing baker. Every Saturday during the summer, she holds a bake sale on her screened in front porch. People line up at 8 AM to get first dibs on her cinnamon rolls, pies and cakes. Special orders for graduation cakes and holiday pies keep her busy and her checkbook full year round.

The son of a coworker tutors math and chemistry as a way to pay for his room and board at college. He earns between $20 – $50 per session and finds it helps him keep his own knowledge sharp.

As a child, listening to adult conversations, I perceived the term “Hustle on the Side” as a derogatory comment; meaning you were making money in a way that may not be totally honest. Today, having a Side Hustle is seen as having an entrepreneurial spirit. Depending on your skill set, “hustling” can be quite lucrative.

If you are having difficulties making ends meet or want to up your saving or investing in the future, you have 3 choices: earn more money, spend less money or do both. Maybe a “hustle on the side” can help you achieve that goal. What marketable skills and talents do you have?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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