With more college graduates piling up debts, an increasingly popular program on campus is trying to help them stay out of trouble.
More than 600 colleges are now enrolled in the National Endowment for Financial Education’s (NEFE) online program, so they can offer free assistance to four-year and community college students. CashCourse is a sort of private-label personal finance program: each academic institution puts its logo and school colors on NEFE’s online package of cash- and debt-management tools, tips, and workshops.
The University of California, the University of Texas, Purdue University, and State University of New York are among the schools posting NEFE’s materials to their websites or customizing financial programs to meet their students’ unique needs.
“We want every school to figure out what works for them,” said Ted Beck, NEFE’s chief executive.
Leticia Gradington, program director for Kansas University’s program, said it’s not unusual for students to have $20,000 to $30,000 in college loans and credit card debts.
“You’ve got students every day who are worrying about how they’re going to pay their debt back,” she said. If students can learn just how expensive the debt is before they borrow, “They pay more attention to it.” …Learn More
The Journal of Marketing Research (JMR) will devote a special issue to interdisciplinary research on the hot topic of financial decision–making and behavior.
The issue is a smorgasbord of 15 articles on behavioral, marketing, economic, and psychological research on various financial activities, from borrowing money to establishing trust in financial transactions.
The November issue’s guest editor-in-chief, John G. Lynch, a psychologist who “wandered into marketing and consumer decision-making,” said the interdisciplinary approach advances everyone’s understanding of complex financial decisions.
“A given field understands a part of the answer. But we’re missing the larger whole,” he said. The special issue “would bring people together to read each other’s work and have an effect of causing more cross-fertilization.”
Squared Away plans to cover some JMR articles in a series of blog posts in coming weeks. Here’s a preview: …Learn More
I keep bumping into Tim Maurer’s videos – he’s an active tweeter – and decided to share the fun. This Baltimore financial planner’s clients include a lot of 30-somethings, so he produced a series of humorous 90-second videos that knock down the barriers to understanding the basics of various personal finance topics.
With many people either returning from or heading out on vacation this week, he suggests in this video how to eliminate the anxiety around spending money on trips.
The impact of today’s purchasing decisions on how much money you’ll have years from now, in retirement, can be abstract. Putnam Investments’ new iPhone app does the math for you.
This Putnam video uses the example of an HDTV that costs $1,738: save that money instead and earn an additional $44.18 per month in retirement. That’s enough for a dash to the grocery store or an evening at the movies.
Putnam’s senior Web executive, David Nguyen, called it a “smart app,” because it allows users to tailor the assumptions that drive the calculations. For example, the app takes into account the user’s age, and it assumes the money not spent will earn investment income until you’re 65 years old (that targeted retirement age can also be changed). The investment returns mirror the individual returns for each user’s asset allocation.
Phone apps are proliferating, and there are lots of cool new ones for every financial need and age group, including children. Putnam’s app is pretty popular. The Boston mutual fund company said about 1,000 people have downloaded its new PriceCheck&Save application from Apple’s iPhone store since its June 6 release.
Unfortunately, it’s available only to those whose 401(k)s are managed by Putnam, though the company is working on an unrestricted app.
If Putnam doesn’t, someone else surely will.Learn More
Susan Beacham’s company has sold nearly one million of its piggy bank with four slots – for spending, saving, donating, and investing. She has now developed an iPhone application based on the iconic pig.
Children who use the clear blue piggy bank like to watch their money clink to the bottom of one of the four separate sections in the pig’s innards. Beacham has developed an entire curriculum around the four choices. The Money Savvy Pig has been adopted as a teaching tool by more than 200 Chicago public schools and by school systems in Seattle, North Dakota, Europe, and elsewhere.
The idea behind the game app, called “Savings Spree,” is the same: to help children “strengthen the muscle of choice and, therefore, their self-regulation and self-control,” said Beacham, chief executive of Money Savvy Generation Inc., a small, mission-driven company employing four people. …
Americans have squirreled away some $7.1 trillion in their retirement accounts. But once they actually retire, they don’t seem to know what to do with their money.
The U.S. income retirement system is in the throes of a foundational shift from guaranteed employer pensions to a system that puts most of the burden onto employees to make sure they have enough retirement income. I’ve been hearing recently about the heated debate on how Americans who are retiring are handling their finances under the new system.
Some worry that retirees are using up their personal retirement account (PRA) assets too quickly, while others believe they aren’t using the funds as retirement income, as intended when they were working and saving the money. By not spending it, they may be unnecessarily lowering their standard of living. … Learn More
In a May 5 Squared Away blog post, I provided a list of financial planners’ five favorite tools for helping people control their spending. In this post, I’m providing their motivational suggestions.
Here are the five tips, based on my informal survey of planners. Each tip includes the psychological rationale behind it.
Find the “Aha! Moment.”
Some clients respond when they see, in detail, how much they’re spending and what they’re buying. Bonnie A. Hughes, a northern Virginia planner, is a big believer in mild shock therapy. She’s had great success by showing clients how much their income would fall if they were laid off, divorced, or dropped out of the workforce. Or she shows them just how much they’ll need in retirement, and it’s usually a big number.
Reason: The Aha! Moment provides the self-motivation that clients must possess and that planners can’t provide. …Learn More