Financial Literacy - Iowa FCS Educators · Warren Buffet. Win Big Lose Small Education Home...

Financial Literacy

Financial Literacy

Our Observations

� Conscious participation

� Living on the Edge (not in a good way)

� Cozy with debt

� Technology – a tool, not a solution

� Investing – I have plenty of time

Financial Literacy

Paris HiltonTerrell OwensOr other relevant celebrity who is or was broke

Warren BuffetWhere am I?

Win Big Lose Small� Education

� Home Purchase

� Insurance

� Career Path

� Saving

� Impulse purchase

� Starbucks

� Net flicks

� Eating Out

� 0% Interest “Deal”

Financial Literacy – Conscious participation

Good Bad

� Option Arm

� Annuity

� Lease

� High deductible

� Permanent life insurance

� Timeshare

� Fixed rate

� “No Load” funds

� Buy

� Low deductible

� Term insurance

Conscious participation - Have a Plan

Theo’s Holiday - I’m Going To Be A Model!

"To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework." - Warren Buffet

“Aim Small, Miss Small” – The Patriot

Conscious Participation

� Substitution

� Sleep on it

� Talk to a trusted advisor

� Is bigger better

� Cost vs. cash flow

Conscious Participation� “that phone would cost you $700 to replace at retail”

� Insurance: $10/month

� Deductible: $200

� Total Cost: $440

Consider Instead:

- Manufacture warranty

- Buy used

Living on The Edge� Having A Plan B

I got a job at a Fortune 500 company!

I got a promotion!!!

I found out what RIF means

I don’t have any benefits

New job at a small company!!!

I’m having twins!

I can’t afford twins!

Living on The Edge

�Insurance – Play What If?

�Rainy Day – Small is better than none

�Save the first dollar, spend the last� The news

� 38% Live paycheck to paycheck

� Over half are behind on retirement savings

� 43% don’t have enough to weather a financial emergencyHuffington Post 07/25/2012

Debt allows us a lifestyle we otherwise couldn’t afford

Cozy with Debt

Cozy with Debt - College

“I wish someone would have told me……”

The Facts:- We have more kids in student loan debt than then the number of

people living in Canada (Huffpost.com 1/22/2014)- Student loans delay purchases, household formation, and Range

Rovers- More Than Half of Student Loans are in deferral or

delinquent(Forbes.com 02/01/2013)

Technology – A Tool Not a Solution

A world without tip calculators, what do you do?

Investing Basics- Costs matter, but only if you are investing.- Save with a goal in mind, not “just to get started”- Starting early with little > starting late with a lot- Compound interest and the snowball effect

Time -------------------�

“You want me to buy a sock?” Grace Fober - future bookie

Conclusion- Back to the future (share your successes and your failures)- Junior Achievement - Yes You Can Raise Financially Aware Kids Curriculum

- yesyoucanonline.info