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HSFPP Weekly Update # 152—Do You Control Your Own Destiny?

Message from Bob: The latest ACNielsen Online Consumer Confidence Study, conducted twice a year, showed that 22 percent of Americans had no spare cash after paying for essential living expenses. This does not surprise me, as we are the No. 1 consuming country in the world. However, based on other findings from the study, I believe we are seeing a change. It looks like Americans are beginning to save more. Once you have covered essential living expenses, how do you spend your spare cash? In October of 2004, 23 percent put money in savings; and 35 percent did according to the latest poll. Also in 2004, 5 percent invested in stocks and mutual funds, and the latest poll showed 12 percent. I would like to believe that the National Endowment for Financial Education, the Cooperative Extension Service, and others are helping to make this difference. However, we still have a long way to go and, by working together, we can make a difference.

To better prepare you for this endeavor, I will once again teach the FAM 759 course during UK’s Second Summer Session. The class will meet for eight weeks, Tuesday and Thursday evenings, from 5:00 - 7:30 pm. It will be available across the state and in Lexington live via compressed video. For more details, look at Pg. 77 of UK’s summer catalog or call me at (859) 257-7758. I look forward to preparing you to make an even greater difference in young people’s lives by presenting them with the financial information they need!

Message from Chris: The Web Site Pick of the Week, http://ntrbonline.org/, has great material related to this week’s update. Click on “The Cost of Life: A Survey.” This page describes a study to determine the average living expenses of recent high school graduates. By performing their own survey along these lines, high school students can find out how much money it really takes to live on one’s own, the importance of a good saving and spending plan, and get some sense of what type of job will support them.

 

Related Updates:

Update #146 - How to Build Wealth - 23 January 2006
Update #144 - Shopping Smart During the Holidays - 12 December 2005
Update #135 - Saving Strategies - 3 October 2005
Update #131 - What is your Shopping IQ? - 19 August 2005
Update #116 - Saving and Investing - 7 February 2005
Update #111 - Lottery Winners and Financial Personality Types - 20 December 2004
Update #108 - Start Saving Now! - 29 November 2004

 

Web Site Pick of the Week:

http://ntrbonline.org/

The NEFE Teen Resource Bureau Web site provides excellent financial information for teenagers. The information changes approximately every four months. Topics vary, but usually are interrelated with the six units of the HSFPP. It includes wonderful ideas for financial management learning projects that involve service to the community.

 

Discussion Questions:

1.) How much have you saved from your last five paychecks?

 

2.) When you’ve saved money, did you put it into a savings account or a similar savings plan, or is the money still in your checking account or wallet, ready for you to spend?

 

3.) When you see something for sale that you want, what do you do? (Do you immediately buy it regardless of the cost, do you think about it, check your budget to see if you have the money for it, save money for it, etc.?)

 

4.) How can you manage your money better (i.e., spending, saving, etc.)?

 

Follow-up Activity:

Math/Social Studies Class: Form groups of 5-7 students to conduct a survey similar to the one described in The Cost of Life: A Survey link on http://ntrbonline.org/. After you complete the project, share your results with other users of the NTRB by using the link on that Web page.

 

In the New$... Do You Control Your Own Destiny?

By Chris Hart, Senior in Telecommunications, University of Kentucky

Teenagers are an important market for many companies’ products because teens spend so much of their own money, as well as their parents’ money. Recent surveys show that many Americans don’t have much money after paying expenses and are living from paycheck to paycheck. But we live in a consumer culture and, unless you consume, you apparently cannot expect to be loved, to be accepted by your peers, or to be happy, at least if you take advertisements to heart and believe their message. But, if you understand that the message advertisers are selling serves their interests and not yours, you will see that your happiness and success depends largely upon you!

As good consumers, we see the latest cell phone or other item and have to have it, when the one we already have is sufficient for our needs. We think the latest gadgetry will make a difference to us, and it might; but not necessarily. Americans also believe a strong economy is dependent upon consumer spending. It is, in part, but what about saving and investment? Although Americans are becoming more concerned with paying off debt, no-one should be in a situation where their primary financial concern is paying off debt. By making intelligent choices as a consumer, you can avoid debt and instead have a nice amount of extra cash. Too many people do not have a plan for spending and saving. When you don’t know where your money goes, it is hard to analyze how to save it. Look at http://www.nefe.org/hsfppportal/includes/main/home.asp?page=11000 for help in setting financial goals and creating a plan. Keep track of, and analyze, your spending. You will no doubt find purchases you made that were not necessary, money you could have saved and invested for the future.

When you get paid from a part-time job, pay yourself first by setting aside some money to save and invest. This way, you can establish the habit of saving all your life. Wouldn’t it be nice to be able to go on vacations or retire early and still have the money to do what you want? If you don’t establish the habit of saving and investing, you will join the other 22 percent of Americans (the highest percentage in 42 world markets, according to the latest ACNielsen Online Consumer Confidence Study) who have no spare cash once they cover essential living expenses, or the 42 percent of consumers with spare cash whose first priority is paying off their debt.

But note this: I’m not suggesting that you never have any fun and never spend your money on a date, to see a movie, to buy a book, a CD or DVD, or to buy a stereo. Money isn’t everything, but we all need to ask ourselves if living from paycheck to paycheck is our idea of a good life. Too many of us do this just to impress our peers or by trying to keep up with them. We all should keep one eye on our budget at all times, even when having fun, or we might end up like the man in the commercial, standing at the barbecue grill entertaining friends, saying, “I’m in debt up to my eyeballs ... Somebody help me!” Don’t look for someone else to help you with your finances if you can still help yourself. Do have fun, but save money, too.

Source: Survey data from ACNielson Online Consumer Confidence Study, 01-24-06. http://us.acnielsen.com/news/20060124.shtml

 

Kentucky High School Financial Planning Program

http://www.ca.uky.edu/fcs/hsfp

The purpose of the HSFPP weekly financial updates and Web site is to assist county Extension agents, credit union educators, high school teachers, and parents who home school their teenagers so that they may improve the economic well-being of our teenagers; and also to show educators how the HSFPP and the weekly updates meet Kentucky core concepts. The Web site and weekly updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators. The list of core concepts and order form for free program materials including the student guide and instructors manual can be found on the Kentucky HSFPP home page.