Category Archives: Financial Literacy

Outline for financial literacy course

Here is the outline I came up with on 2016-02-10 for my online course in development, Introduction to American Personal Financial Literacy.

NOTE: On 2016-10-29, Richard Thripp decided he will not be completing this course.

The course will allow “just-in-time” education by permitting learners to access modules in any order, thereby allowing them to create their own “teachable moments” where they can acquire specific strategies and information to address their current situations (Carlin & Robinson, 2012; Fernandes, Lynch, & Netemeyer, 2014).

The course will consist of a mix of lecture videos, text and picture-based modules, narrated presentations, and some external videos. Assessments will include quizzes and self-assessments, such as writing Twitter summaries (Bailey, Hendricks, & Applewhite, 2015) or evaluating one’s budget or net worth spreadsheet against a rubric. Assessments will primarily be unit based. Some modules will have exercises. This outline does not yet include assessments, exercises, instructional modalities, or citations to support the information presented in each module. I will be adding these items while developing the course.

Tentatively, the course will include 8 units containing 35 modules. Many of the standards of the Jump$tart Coalition for Personal Financial Literacy’s “National Standards in K–12 Personal Financial Education” (2015) will be met; these standards are widely used in financial literacy curricula and academic research. Although these standards lack outcome-based empirical support, this is unfortunately a pervasive problem in the entire field of financial literacy education (Fernandes et al., 2014). Other modules will focus on topics that academic authors have identified as problem areas. While not comprehensive, this course will address an impressive array of issues.

Unit 1: Why be financially literate?

Module 1.1: The disastrous consequences of financial illiteracy
Learn about the cycle of living paycheck to paycheck and consequences of making mistakes such as paying high interest rates or having bad credit, both short-term and long-term.

Module 1.2: Adopting the growth mindset
Do you believe that math skills are something you are “born with”? Perhaps you believe the same for personal finance skills? See the research that says these skills are like a muscle that can grow with diligent effort (Dweck, 2006).

Module 1.3: Avoiding payday loans and other schemes
Payday loans, rent-to-own stores, and pawn shops may help you make ends meet, but they do are incredibly disempowering in the long run (Karger, 2015). Learn about alternatives here.

Unit 2: Spending and Saving

Module 2.1: Crash course on banking, fees, and ChexSystems
Learn how checking and savings accounts work, how to avoid bank fees, and how a bad ChexSystems report can prevent you from opening new accounts or even prompt banks to close your existing accounts.

Module 2.2: Budgeting: Do you really need it?
Learn how to set up a budget, including your regular monthly expenses, surprise expenses and less-than-monthly expenses. Also: An alternative to budgeting—make every purchase a wise purchase.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 1. Develop a plan for spending and saving” (p. 12).

Module 2.3: Calculating your net worth
This module will teach you how to calculate your net worth. Let Microsoft Excel or Google Docs do the math for you. You will learn to realistically appraise your fixed assets, tally your liquid assets, and deduct your debts and liabilities.

Module 2.4: Consumer protection and payment methods
Learn about cash, debit cards, credit cards, Bitcoin, gift cards, coupons, return policies, and warranties. Learn that cash may be “king,” but it definitely does not offer the best consumer protections!
Competencies: Jump$tart Coalition (2015), Spending and Saving: “Standard 3. Describe how to use different payment methods” (p. 11); Credit and Debt, “Standard 4. Summarize major consumer credit laws” (p. 18).

Module 2.5: Goal-oriented saving
Learn how goal-oriented saving can motivate you and reduce your tax burden, including Health Savings Accounts and 529 qualified tuition plans.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 1. Develop a plan for spending and saving” (p. 12).

Module 2.6: Comparison shopping
Are you getting the best deal? Comparison shopping can be done from home, but there can be an overwhelming number of websites and similar products. Learn how to analyze anecdotal evidence (customer reviews) to determine if a product is right for you.
Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 4. Apply consumer skills to spending and saving decisions” (p. 12).

Unit 3: Credit and Debt

Module 3.1: The psychological toll of debt
Examine the psychological research on how being in debt may cause anxiety and dread. Explore several ways to motivate yourself to get out of debt.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 3. Apply strategies to avoid or correct debt management problems” (p. 17).

Module 3.2: All about credit cards and charge cards
Learn the technicalities of credit cards including interest rates, grace periods, late fees, penalty APRs, cashback and rewards, and cardholder benefits.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 1. Analyze the costs and benefits of various types of credit” (p. 15).

Module 3.3: The mystery of credit scores
Learn about the three credit bureaus, FICO vs. “FAKO” scores, how credit scores are calculated, the effects of credit inquiries, and a step-by-step plan to improve your credit score.
Competency: Jump$tart Coalition (2015), Credit and Debt: “Standard 2. Summarize a borrower’s rights and responsibilities related to credit reports” (p. 16).

Module 3.4: Student loans and alternatives
Learn about federal subsidized, federal unsubsidized, and private student loans, interest rates and deferments, and methods to reduce your loan burden such as grants, scholarships, and attending a less costly school.

Module 3.5: Mortgages
Learn about mortgages, tax benefits, how to get the best deal, and how to refinance an existing mortgage at a lower rate.

Module 3.6: Your car: A depreciating asset
Learn why your car is not a good investment, a better way to get a car loan, and how to negotiate the lowest price for a new or used car.

Unit 4: Employment Income

Module 4.1: Job interviews and promotions
Learn approaches that are supported by cognitive psychology for doing well in job interviews and successfully asking for a raise or promotion. Also, learn how to ace the psychological questionnaires that many job applications require—answer wrong and a human may never look at your application.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 1. Explore job and career options” (p. 21).

Module 4.2: Understanding your rights as a worker
Learn about equal opportunity laws, OSHA regulations, overtime pay, whistleblower protections, and how to compel an employer to relinquish your last paycheck.

Module 4.3: Understanding payroll deductions and income taxes
Learn how Social Security deductions, Medicare deductions, workers’ compensation insurance, and income tax work, including tax brackets and standard deductions. Figure out how to calculate your net hourly pay. Also: Learn how to increase your number of “allowances” to prevent giving Uncle Sam an interest-free loan out of your paychecks.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 3. Analyze factors that affect net income” (p. 23).

Module 4.4: Self-employment
Learn basic information about self-employment as a sole proprietor, including your increased tax burden, licensing, commercial auto insurance, deductions, legal liability, and how to figure out if your homeowners’ association prohibits home-based business activity, and whether such terms will be enforced.
Competency: Jump$tart Coalition (2015), Employment and Income: “Standard 2. Compare sources of personal income and compensation” (p. 22).

Unit 5: Investing

Module 5.1: Defining your investment goals and risk tolerance
Learn how to assess a sensible level of risk tolerance based on your current age and desired retirement age. Learn about safe investments like bonds and certificates of deposits, as well as riskier investments that may yield big payoffs or might lose everything.
Competency: Jump$tart Coalition (2015), Investing: “Standard 2. Evaluate investment alternatives” (p. 26).

Module 5.2: Why picking stocks hardly ever works
Learn about index funds, diversification, and why actively-managed funds almost always under-perform index funds.
Competency: Jump$tart Coalition (2015), Investing: “Standard 3. Demonstrate how to buy and sell investments” (p. 27).

Module 5.3: Pros and cons of home ownership
Learn why renting or leasing might be better than buying, including information on property taxes and homeowners’ associations. Also: Lessons from the past on how to tell when real estate prices are in a “bubble.”

Module 5.4: How to retire in style
Learn to understand compound interest rates, retirement plans, 401(k) and Roth IRAs, employer matching, and the benefits of tax deferment. Learn how your Social Security benefits are calculated, and how to determine the best age to begin receiving them.
Competency: Jump$tart Coalition (2015), Investing: “Standard 1. Explain how investing may build wealth and help meet financial goals” (p. 25).

Unit 6: Risk and Insurance

Module 6.1: Understanding and avoiding identity theft
Learn the risks for identity theft and the methods thieves use. Learn how to proactively monitor your credit reports for free. Bonus: How to keep track of your account passwords without reusing the same password over and over.
Competency: Jump$tart Coalition (2015), Financial Decision Making: “Standard 7. Control personal information” (p. 41).

Module 6.2: When is insurance a good idea?
Learn about the fundamental purpose of insurance, and use this knowledge as a lens to judge the types of insurance that are must-haves and the types that are frivolous.
Competency: Jump$tart Coalition (2015), Risk Management and Insurance, “Standard 1. Identify common types of risks and basic risk management methods” (p. 31).

Module 6.3: How to lower your car insurance premiums
Learn how car insurance companies offer wildly different quotes through different channels. Learn how to make sure you are getting the discounts you deserve, and how making a “lump sum” semiannual payment can save you hundreds over monthly payments. Also: Learn about your Comprehensive Loss Underwriting Exchange (CLUE) report, how to request it for free from LexisNexis, and why even talking to an insurance agent about a potential claim can raise your rates.

Module 6.4: Navigating the Health Insurance Marketplace
Learn the fundamental differences between bronze, silver, gold, and platinum plans offered through Healthcare.gov, how Advance Premium Tax Credits are administered and calculated, when the penalty for not having health insurance is enforced, and when paying the penalty may be a cheaper option.
Competency: Jump$tart Coalition (2015), Risk Management and Insurance: “Standard 3. Justify reasons to use health, disability, long-term care and life insurance” (p. 33).

Unit 7: Financial Decision Making

Module 7.1: Every decision has financial consequences
If time is money, even the decision to watch TV costs you money! Learn to consider the financial consequences of day-to-day decisions; empower yourself financially and you will be able to focus on what is important to you in life.
Competencies: Jump$tart Coalition (2015), Financial Decision Making: “Standard 1. Recognize the responsibilities associated with personal financial decisions” (p. 35); Financial Decision Making: “Standard 4. Make criterion-based financial decisions by systematically considering alternatives and consequences” (p. 38).

Module 7.2: When college is not worth it
Learn about the opportunity cost and intangible benefits of a college education, how to avoid predatory for-profit institutions, and how to figure out if college education will improve your salability.

Module 7.3: Dealing with the financially reckless significant other
Learn strategies for reining in a financially reckless spouse or partner, and how to spot the warning signs early on.
Competency: Jump$tart Coalition (2015), Financial Decision Making: “Standard 5. Applying communication strategies when discussing financial issues” (p. 39).

Module 7.4: Having and raising children
Did you know that having your baby in December could save you thousands on your tax bill? Having children is the most costly and most rewarding decision many couples and individuals make—here, we will explore some of the financial ramifications, both common and obscure.

Module 7.5: Tax avoidance
Learn the differences between tax avoidance and tax evasion, why donations become more important at higher income levels, and when to itemize deductions.

Unit 8: Paying it Forward

Module 8.1: Charity and philanthropy
Learn how to give back to causes you love—often, without spending a dime.

Module 8.2: Be an agent for financial literacy
Learn to determine if others want your financial advice and how to provide it in a manner that minimizes your legal liability. (Only free advice-giving will be covered—not consulting or fee-based advice.)

Module 8.3: Reflection
Synthesize what you have learned in this course by writing a personal reflection.

 

References

Bruning, R. H., Schraw, G. J., & Norby, M. N. (2011). Cognitive psychology and instruction (5th ed.). Englewood Cliffs, NJ: Pearson Education.

Bailey, S., Hendricks, S., & Applewhite, S. (2015). Student perspectives of assessment strategies in online courses. Journal of Interactive Online Learning, 13(3), 112–125.

Bosshardt, W., & Walstad, W. B. (2014). National standards for financial literacy: Rationale and content. Journal of Economic Education, 45(1), 63–70.

Carlin, B. I., & Robinson, D. T. (2012). What does financial literacy training teach us? Journal of Economic Education, 43, 235–247. http://dx.doi.org/10.1080/00220485.2012.686385

Collins, J. M., & Holden, K. C. (2014). Measuring the impacts of financial literacy: Challenges for community-based financial education. New Directions for Adult and Continuing Education, 2014(141), 79–88. http://dx.doi.org/10.1002/ace.20087

Council for Economic Education. (2013). National standards for financial literacy. Retrieved February 10, 2016, from http://www.councilforeconed.org/wp/wp-content/uploads/2013/02/national-standards-for-financial-literacy.pdf

Dweck, C. S. (2006). Mindset: The new psychology of success. New York, NY: Random House.

Fernandes, D., Lynch, J. G., Jr., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60, 1861–1883. http://dx.doi.org/10.1287/mnsc.2013.1849

Gross, K., Ingham, J., & Matasar, R. (2005). Strong palliative, but not a panacea: Results of an experiment teaching students about financial literacy. Journal of Student Financial Aid, 35(2), 7–26.

Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89(7), 309–322.

Jordan, K. (2015). Massive open online course completion rates revisited: Assessment, length and attrition. International Review of Research in Open and Distributed Learning, 16(3), 341–358.

Jump$tart Coalition for Personal Financial Literacy. (2015). National standards in K–12 personal finance education, (4th ed.). Retrieved February 10, 2016, from http://www.jumpstart.org/assets/files/2015_NationalStandardsBook.pdf

Jump$tart Coalition for Personal Financial Literacy. (2016). 2016 national board of directors and officers. Retrieved February 10, 2016, from http://www.jumpstart.org/board-and-officers.html

Karger, H. (2015). Curbing the financial exploitation of the poor: Financial literacy and social work education. Journal of Social Work Education, 51(3), 425–438. http://dx.doi.org/10.1080/10437797.2015.1043194

Lindsey-Taliefero, D., Kelly, L., Brent, W., & Price, R. (2011). A review of Howard University’s financial literacy curriculum. American Journal of Business Education, 4(10), 73–84.

Lucey, T. A. (2005). Assessing the reliability and validity of the Jump$tart survey of financial literacy. Journal of Family and Economic Issues, 26(2), 283–294. http://dx.doi.org/10.1007/s10834-005-3526-8

Lucey, T. A., & Maxwell, S. A. (2011). Teaching mathematical connections to financial literacy in grades K–8: Clarifying the issues. Investigations in Mathematics Learning, 3(3), 46–65.

Mandell, L., & Klein, L. S. (2007). Motivation and financial literacy. Financial Services Review, 16(2), 105–116.

McCormick, M. H. (2009). The effectiveness of youth financial education: A review of the literature. Journal of Financial Counseling and Planning, 20(1), 70–83.

Roszkowski, M. J., Glatzer, M., & Lombardo, R. (2015). An analysis of the nature of the relationship between SAT scores and financial literacy. Journal of Business & Finance Librarianship, 20, 66–94. http://dx.doi.org/10.1080/08963568.2015.978715

Scott, R. H., III (2010). Credit card ownership among American high school seniors: 1997–2008. Journal of Family and Economic Issues, 31, 151–160. http://dx.doi.org/10.1007/s10834-010-9182-7

Seyedian, M., & Yi, T. D. (2011). Improving financial literacy of college students: A cross-sectional analysis. College Student Journal, 45(1), 177–189.

Way, W. L., & Holden, K. C. (2009). 2009 outstanding AFCPE conference paper: Teachers’ background and capacity to teach personal finance: Results of a national study. Journal of Financial Counseling and Planning, 20(2), 64–78.

Learning objectives for financial literacy course

Here are the learning objectives I came up with on 2016-03-05 for my online course, Introduction to American Personal Financial Literacy.

NOTE: On 2016-10-29, Richard Thripp decided he will not be completing this course.

1. Ability to articulate the benefits of financial literacy

2. Knowledge of several financial schemes and pitfalls

3. Motivation to adopt financial habits and practices that result in wealth accumulation, including adoption of the growth mindset (incremental theory of intelligence)

4. Understanding of banking, saving, budgeting, net worth, and payment methods, including ChexSystems reports

5. Understanding of interest rates as well as several types of fees, financial pitfalls, and consumer protections

6. Achievement of a rudimentary understanding of credit cards, credit reports, and credit scores, including how to protect and improve one’s credit reports and credit scores

7. Knowledge of American federal and private student loans

8. Knowledge of potential best practices for financial management while in college, including selecting an institution and determining the financial value of a course of study

9. Ability to articulate the pros and cons of renting, leasing, mortgages, and home ownership

10. Understanding of the economics of owning, renting, and leasing cars

11. Development of a strategy for getting job interviews and succeeding in them

12. Understanding of several American worker rights including OSHA regulations, rights to overtime pay, rights regarding non-compete and non-disclosure agreements, and whistleblower protections

13. Understanding of American payroll deductions and federal income taxes

14. Knowledge of several challenges relating to American self-employment

15. Rudimentary understanding of investing, risk tolerance, and index funds

16. Understanding of Social Security and a mathematical approach to retirement planning

17. Ability to monitor for identity theft, minimize risk factors, and develop a plan to address potential identity theft

18. Rudimentary understanding of the purposes of insurance, including CLUE reports

19. Ability to implement strategies to lower car insurance premiums and/or improve coverage

20. Knowledge and basic understanding of the American Health Insurance Marketplace

21. Ability to articulate the financial consequences of various everyday decisions, including methods for quantifying the monetary value of time

22. Acquisition of strategies for dealing with a financially reckless significant other, including an understanding of the spendthrift–tightwad model of complementary attraction

23. Understanding of some of the basic financial challenges and considerations in having and raising children

24. Basic understanding of American personal and corporate tax avoidance strategies, including key differences between tax avoidance and tax evasion

25. Understanding of basic considerations regarding charity and philanthropy

26. Ability to perform targeted financial literacy interventions during “teachable moments” in the lives of friends and family, where appropriate

27. Ability to synthesize and reflect on one’s financial literacy journey

Financial Literacy Quiz, 1/26/2016

I would love feedback or testing from people on this financial literacy quiz I created today, 1/26/2016:

https://www.goconqr.com/en-US/p/4376400

It is only 10 questions, and covers the topics of credit scores, income tax, coupons, checking accounts, payday loans, and a couple others.

Unfortunately, Udemy does not have great quiz options. I spoke with Dr. Bobby Hoffman, who is advising me with the creation of my online course at University of Central Florida, and he said it is possible to create a Udemy course while directing students off the site for assessments. I am fairly impressed with GoConqr quizzes, since they offer multiple selections, explanations, randomization, public quizzes, and many other options for free.

My Capstone projects for the Applied Learning & Instruction M.A. program at University of Central Florida involve creating an online course called Introduction to American Personal Financial Literacy, and a companion paper.

I have not yet determined my course objectives and learning theories that will be used, but will obviously be doing this very soon, and will make sure future course materials are more informed by research. I created this quiz to get myself started with assessments and brainstorming.

Richard

QUESTIONS BELOW, but go to https://www.goconqr.com/en-US/p/4376400 to try the quiz (order of questions and choices will be randomized). On GoConqr, after you submit the quiz, review the questions to see my explanations regarding the correct answers.

TITLE: A fairly difficult American financial literacy quiz written by Richard Thripp on 1/26/2016

DESCRIPTION: A fairly difficult American financial literacy quiz written by Richard Thripp on 1/26/2016. 10 questions; all multiple choice including two with check boxes.

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1.) Which of the following is MOST detrimental to your credit score?

a.) A poor mix of account types (e.g., only having credit cards, but no auto loans, mortgages, student loans, etc.)
b.) Many recent credit inquiries
c.) A missed payment that was over 90 days late
d.) High credit utilization

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2.) You are exactly one week late paying your electric bill, and incur a 1.50% late fee for this. Converting this to an annual percentage, about how much effective APR did you pay?

a.) 0.03%
b.) 1.50%
c.) 18.00%
d.) 78.00%

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3.) When filing your federal income taxes, you take the standard personal deduction of $6300, but you could have deducted $8300 had you itemized your deductions. If the income that could have been reduced is entirely in the 25% tax bracket, how much additional federal income tax did you pay by taking the standard personal deduction?

a.) None
b.) $250
c.) $500
d.) $2000

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4.) Amanda wants to marry Fred. Fred has no savings or assets and receives $650 per month in SSI disability benefits. Amanda has $5000 in her savings account, $3000 in other assets, no disabilities, and minimal income. Based on 2016 federal law, what will happen when Amanda and Fred get married?

a.) Fred’s SSI benefits will continue to be $650 per month
b.) Because Fred is married, his benefits will increase
c.) Fred’s benefits will be reduced by about 50% due to his new spouse’s assets
d.) Fred will no longer receive any SSI benefits because he now has over $3000 in combined assets with his spouse

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5.) Stephanie is a single, self-employed entrepreneur with taxable income of $60,000 from her business after itemized deductions, cost of goods sold (COGS), and other deductions. If Stephanie was to increase her income to $70,000 in 2016, how much additional money would she wind up with? All of Stephanie’s additional income would be in the 25% tax bracket. Stephanie receives no income-based benefits and lives in Florida, so she does not have to pay state or local income tax. Stephanie is a sole proprietor, so she does not pay unemployment tax.

a.) $5970.00
b.) $6161.25
c.) $7500.00
d.) $10,000.00

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6.) Kaley offers Samantha $5.00 to drive her from Daytona Beach to Orlando, a trip that takes 1 hour and is a distance of 50 miles. Since gas is $1.999 per gallon and Samantha has a Toyota Prius that uses one gallon of gas per 50 miles driven, Kaley says this is fair. Samantha does not enjoy Kaley’s company, has no secondary reason to go to Orlando, and does not particularly enjoy driving. Samantha values her time at $8.00 per hour. Which of these options best characterizes the cost to Samantha?

a.) + $1.00: Samantha got $1.00 more than it cost her in gas to drive 100 miles round-trip.
b.) – $15.00: Samantha got $1.00 more than her gas cost, but wasted 2 hours of her time, which she values at $16.00.
c.) – $30.00: Samantha lost $15.00 after time and gas. Samantha paid $30,000 for her Toyota Prius and expects to get 200,000 miles out of it, meaning that her cost of vehicle ownership is $0.15 per mile, which is $15.00 to drive 100 miles.
d.) – $50.00: Samantha lost $30.00 after time, gas, and vehicle depreciation. However, Samantha also pays for her auto insurance, oil changes, tires, and other maintenance, which she estimates at $0.10 per mile, which is $10.00 to drive 100 miles. Also, since drivers on I-4 are horrifying, Samantha believes she should be compensated at least $10.00 for the risk of bodily harm that she exposes herself to when driving to and from Orlando.

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7.) Steve overdraws his checking account by $0.12 when buying a soda with his debit card. Steve’s account offers overdraft protection, but charges a $37.00 fee for each overdraft. Instead of paying the $37.12, or requesting a courtesy fee waiver, Steve abandons his account. It goes on to accumulate $50 in additional fees, but is not referred to collections; a black mark is left on Steve’s ChexSystems report, but not his credit report. Eight months later, Steve wishes to open a new checking account at a different bank. Will he be able to?

a.) Yes, because more than six months have passed.
b.) Possibly, but only at banks that do not use ChexSystems.
c.) No, because derogatory ChexSystems data persists for 5 years, and all banks use ChexSystems.
d.) No, because anyone who is delinquent on a checking or savings account is permanently barred from opening a new account at any U.S. bank until the debt is resolved, as provided for in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

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8.) Which of the following are true about payday loans? (Check all that apply)

a.) Payday loans should be used as a last resort
b.) Payday loans have extraordinarily high interest rates
c.) Under no circumstances is there ever a reason than anyone should take a payday loan
d.) People who use payday loans tend to be middle-class professionals who manage their money poorly

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9.) Kristen, a poor college student, receives $100 cash from her aunt for her 19th birthday. She decides to buy a new pair of shoes with this money, a “splurge” purchase for herself that she would never buy with her own money. She believes this is acceptable because the money was a gift. What is the most important flaw in this reasoning?

a.) Kristen should be making “splurge” purchases for herself more often and with her own money, not just with money given as gifts. This will allow her to be more psychologically healthy.
b.) Money is money; the money Kristen received as a gift is no less valuable than the money she works for. It does not make sense to treat money from one source differently than money from another source, except for taxation or accounting purposes which generally don’t apply to poor college students.
c.) It will be difficult for Kristen to find a pair of shoes that costs exactly $100, especially with sales tax. Therefore, she should buy a U.S. savings bond.
d.) Since it’s Kristen’s 19th birthday, a “splurge” purchase is unwarranted, because this is not a milestone year like the 16th, 18th, 21st, or 25th birthday. Therefore, Kristen should treat her 19th birthday like any other day.

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10.) Which of the following is true about manufacturers’ coupons? (Check all that apply)

a.) If the item is taxable, the amount of the coupon is subject to sales tax.
b.) The amount of the coupon must be declared as income.
c.) Manufacturers’ coupons can never be combined with store coupons.
d.) While manufacturers’ coupons can reduce the price of an item, most retailers will not allow the price paid by the customer to be reduced below their wholesale cost.
e.) The Internet is a valid source for manufacturers’ coupons.
f.) Manufacturers’ coupons function as a sort of reverse mail-in rebate; stores must transmit or mail in the coupons to receive reimbursement from the manufacturer.
g.) Manufacturers’ coupons are an effective way to save money, but one should be careful not to make unwise purchases just because they have a coupon.

Ten Bad Habits of Personal Finance

The following list is in no particular order! It was written by me during three sessions on 2016-01-03, 2016-01-14, and 2016-01-16. These are issues salient to me. There are certainly other and perhaps more important issues such as salary negotiation, failing to itemize deductions, and poor estate planning. However, such issues are not my areas of expertise, nor are they current areas of interest for me.

Not getting what you deserve

I have met community-college students who literally did not know about the FAFSA. Their parents were low-income and they could have been getting over $2500 in federal Pell grant money per semester, but were instead getting nothing because they didn’t even apply.

This habit can be related to not researching or trying hard enough. For example, many consumers think they have no recourse when a price goes down after they purchase an item, while in fact, even if the lower price is being offered at another retailer, their credit card probably offers price protection if they would just take the time and effort to file a claim. Unfortunately, such individuals probably didn’t even read about their card benefits or think of this possibility.

This habit can also be related to being a push-over. I always choose the performance goal-orientation when it comes to matters of customer service or contract breakage: what are OTHER customers getting that I’m not, because they are standing up for themselves and demanding results? A VERY common example of this is bank fees. The typical consumer incurs bank fees without a whimper, yet these fees may not even be legitimate—or if they are, will probably be waived as a one-time courtesy if you ask nicely.

Not getting what you deserve is a HUGE problem. It relates to education, mindset, self-esteem, and many other issues. Most of us do not have an advocate when it comes to personal finance; we must do our own Google searches and take action to save ourselves money. Unfortunately, too many Americans would choose to put in extra hours at a low-paying job over using this time to become financially literate and earn or save many more dollars per hour.

Finally, consider that money saved is typically NOT taxable income. Pell grants, price-protection refunds, and courtesy waiver of bank fees are not subjected to payroll deductions or income taxes, yet if you DON’T pursue them, you have to earn anywhere from 15 to 50% more income to compensate for the opportunities you missed.

Paying for poison

When you buy alcoholic drinks, tobacco products, candy, soft drinks, or energy drinks you are literally PAYING to poison yourself. Not only do these products have no nutritional value; they actively damage your liver, lungs, and other organs, reduce your quality of life, and if chronically consumed, make you feel powerless and unhappy.

While soft drinks are expensive in 20-oz. bottles from the retail cooler, often running upward of $1.50, they are even more expensive at sit-down restaurants, often costing over $3.00 with tax and 20% tip. Just say no. If anyone judges you negatively for ordering water, you should probably find better dates or friends.

Financial needs expanding to match or exceed the amount of money available to you

Like many bad financial habits, this is more common with people who have achieved less formal education, e.g., high-school dropouts. If you have $10.00 in your pocket, this does NOT mean you need to spend $9.92 at the gas station on a 20-oz. bottle of Sprite, Monster energy drink, candy bar, and pack of cigarettes. YES, spending the $10.00 does prevent it from being stolen, and relieves you of the threat of it being “borrowed” (through peer pressure or coercion) by family or friends. However, it cuts off all future opportunities for the money and leaves you with no degrees of freedom to adapt to circumstances or opportunities.

Earning more money does not mean your lifestyle should immediately become more costly. In the Millionaire Next Door, people who invest wisely and increase their income, while continuing to drive an older car and live in a modest home, are called “prodigious wealth accumulators.” While this predilection for accumulation may seem empty if the wealth is never “enjoyed,” consider that these millionaires often enjoy the process of wealth accumulation itself, and the freedom it affords them. They typically are not preoccupied with spending. While “you only live once” is a comforting saying for the financially obtuse, heavy saving rather than heavy spending may lead to greater satisfaction and happiness, particularly when you have dependents to care for.

Obviously, this habit gets much worse when debt is involved. It is most certainly NOT in your best interests to pay 25.24% annual interest on these frivolous purchases.

Picking the wrong partners and friends

If you are dating or become married to someone who spends frivolously, it is very possible that they will not change. In fact, nagging and complaining may push them to become even more decadent and foolish in their financial habits. An analogous example is the devoutly religious family who raises a child who immediately announces his or her atheism at 18. Instead of seeing your partner as who you wish they would become in the future, a more realistic outlook may involve projecting their past behavior into the future; that is, assuming their financially unsound habits will only continue or become proportionally worse as they have access to increased income and lines of credit. If you accept these low expectations, you will probably have a truer understanding of the financial handicap (or even financial ruination) that being committed to this person will entail. In many cases this can be a deal-breaking issue.

Similarly, your choice of friends can hurt your finances quite a bit. Friends may use peer pressure to get you to buy things or go to events that are costly and not among your desires or in your best interests. Also, their bad financial habits can influence you, and they may become dismissive or jealous when you start working to improve your financial situation. Albeit, choosing good friends is a general issue that impacts many other areas of life. It may not seem that you have many choices in friends, but assuming you are an intro- or “ambi”-vert, consider that jettisoning toxic friends from your life may be a good choice, if they have proved unwilling to change.

Having or raising children

We often see the figure of $250,000 being bandied about as the cost of raising a child from birth to 18 years of age. While this may seem astronomical to some, to any middle-class American, the idea of a child costing $14,000 a year should seem quite modest. Of course, there are economies of scale to be considered when having multiple children, as well as many incentives and subsidies from the State. However, when considering how child-rearing transforms your life, it clearly costs far more than $250,000 per child in opportunity cost (particularly for mothers), and more importantly, time. Having a bigger house with additional bedrooms and bathrooms is very expensive. There is also so much time and energy to be sacrificed, and American children are prone to rebellion against even the best of parents. For example, at a young age, your child could take up drinking or some other dangerous pastime and wind up dead, completely destroying your investment.

One of the prime reasons people have children is to pass their genes on. When you die without having children, particularly if you are an only child, your lineage terminates. While raising the children of others (whether through adoption or committing to a single parent) is better for limiting the rate of increase of the human population, it does nothing for continuing your bloodline. When considering the astronomical toll that having or raising children imposes on your life, both financially and temporally, you should consciously consider how valuable continuing your bloodline is to you, particularly if you believe you are special and that your specialness is heritable.

Of course, it is well known that having children at an early age is predictive of poverty, and less formal education is predictive of, or at least correlated with, both. This cycle is perpetuated among children who grow up with low socioeconomic status (SES). Given that picking a financially reckless partner can have profound negative impacts on your SES, such a choice may function as a generational curse against your bloodline, especially if such recklessness is inherited, whether genetically or environmentally.

Obliviousness to basic arithmetic

With the recent Powerball lottery drawing on 2016-01-13, we saw that Americans are incapable of understanding odds. See, even with a $1.5 billion jackpot, your odds of winning still require a $584 million net payoff to be in your favor. The $2.00 you spend to buy the ticket are certainly net funds, since you have already paid FICA taxes, income taxes, etc. on them. Therefore, it is completely incorrect to focus on the gross amount of the jackpot. Further, the $2.00 spent on each ticket are funds spent now. Money is always more valuable in the present (among modern fiat currencies). The jackpot amount is based on a 30-year annuity, and is a figure based on the total gross amount you will receive without any downward adjustments for projected future inflation. The after-tax lump some payment was somewhere around $584 million, but with so much fascination with the jackpot, it ended up being split 3 ways. Therefore, the actual odds-based ticket value was probably somewhere around 80¢, after figuring in consolation prizes. That’s as good as it gets for the Powerball. An immediate 60% loss. Typically, jackpots are far lower, and even considering the recent 67% increase in odds from 1 in 175 million to 1 in 292 million, we see that this was still the best cost–benefit ratio for Powerball; the 2nd largest jackpot was much less than half the 2016-01-13 jackpot. Obviously, your (averaged) odds of dying in a car accident today are better than 1 in 292 million.

Insurance is arguably the inverse of lotteries; you pay a relatively small premium to avoid rare yet potentially catastrophic costs. With lotteries, you play a small entrance fee for a minuscule chance at a fantastic upside. While no competent financial planner advocates reckless lottery spending, being well-insured is something that experts and empirical evidence supports. However, without understanding of arithmetic, fractions, percentages, interest, compounding, odds, risk, insurance laws and procedures, etc., you could easily get suckered. This education is sorely lacking from K–12 schooling and many people find it tedious and uninteresting to acquire, despite its importance.

Obliviousness to basic arithmetic leads to being screwed over. You’ll buy the wrong things, be fooled by psychological tricks, and misunderstand every financial decision you make.

Eating out and throwing away food

I understand that some people do not have the appetite for large portion sizes that I have. Nevertheless, excluding salads, ice cream, and frozen yogurt, you can easily take home most foods to be eaten as leftovers. I can’t understand throwing away food prepared at home or purchased while dining. Even at a buffet, I rarely through out food. As someone who has worked in restaurants and in the stockroom of a grocery store, I know that conservation often seems pointless after seeing firsthand how much these businesses waste. However, it typically reduces your costs, improving your financial situation. Instead of getting a soda for $2.99 and eating part of your plate, drink water and eat all of (the food on) your plate. The calorie count will probably be the same, and you’ll be getting better nutrients.

Failing to understand the cost–time relationship

If time is money, money is time. You can buy other, foolish people’s time with your money! Therefore, while money cannot increase the amount of time you have (except with respect to extended lifespan due to better diet, medicine, etc.), it can allow you to accomplish more by using other people’s time, without slavery or duress. This is an amazing characteristic of money.

One example of where people vastly overvalue cost (and undervalue time) is in selecting a gas station. Basically, going out of your way at all to save a few cents per gallon is not worth the time, inconvenience, or effort, because you are probably only buying fewer than 20 gallons of gas anyway and would be saving less than a dollar or two. Yet, people often driver further, plan their routes, and devote considerable mental energy to such tiny savings on gas prices, while overlooking other huge financial blunders such as $100+ monthly cell phone bills.

Your time is valuable, and becomes obviously more valuable as you age. However, realizing the value of your time in youth is preferable; you are not likely not burdened by failing health and waning energy in your youth. Of course, the value of your time in dollars is probably related to your income and accumulated wealth; if you have no savings, you are going to have to make some very time-inefficient decisions just to survive. Becoming financially literate will help you avoid being homeless or without savings in the future, however.

If you live to 80, you have 62 adult years, or 22,645 days. How many of these days will be spent dying, sick, or in the service of others? Perhaps 5000? If you work in an awful career or live with a toxic spouse long enough, perhaps 10,000? You might only have 15,000 or fewer good days. Even a long human life is very short in many respects. You should not only value and guard your time, but you should also actively and thoughtfully evaluate its use and optimization. Since money is a vector for time, allowing you to free up time or employ the time of others, it should likewise be guarded.

Using credit cards really badly

There have been so many articles written about responsible credit card use that it is difficult to broach this subject without being trite. I will simply present this short vignette I typed up:

SMART:
Racking up charges on items that are cash-equivalents or are essential to earning money, on a credit card with a 12- to 24-month 0.00% promotional APR rate, while you have savings or low-risk investments that earn a solid return during this period. While the level of risk of your investments should always be such that it is very unlikely you would have to pay credit card interest rates, the potential for profit here is large: consider that if you max out a credit card with a $20,000 credit line for 12 months and invest the money in something such as an S&P 500 index fund, which earned about 8% annually on average over the past 10 years, you could make over $1500 gross in just one year. The savvy credit user also knows that the negative impact of high credit utilization effectively vanishes in less than a month after paying off the balance; as long as you aren’t taking out a mortgage or car loan during the 12-month period, it will be of no practical significance. (Caveat: Credit scores are being used for more things and I am not sure how detrimental this may be to your car insurance rates, health insurance rates, seeking an apartment, or seeking a job. If your overall utilization is below 30% across all your credit cards, the negative impact to your credit score will be lessened).

NOT SMART:
Racking up tuition charges on the above credit card at a 2% convenience fee, because you believe you “probably” can pay them back at the end of the year and avoid student loan fees and interest. Then, “probably” becomes “no way in hell” and you end up paying 22.99% APR on debt you could have been paying 3.4% APR on.

REALLY NOT SMART:
Racking up charges on the above credit card without understanding that the 0.00% APR does NOT mean no payment is due each month. Then, missing the monthly minimum payment and being immediately subject to the 29.99% penalty APR, with no way to pay off the debt.

Buying a house

Buying a house used to be a completely sane decision. As of January 2016, however, American housing prices are quite high; they are above historical averages when compared to wages, and perhaps entering another bubble. Very few people even think of making the standard 20% down payment on a house, let alone buying one entirely with accumulated savings. While cash sales are on the rise, these buyers are part of an elusive rentier class that epitomizes the startling stratification of wealth in America; many are banks themselves, and others are foreigners (try buying real estate in Mexico or another country as a foreigner, and you will see that America is unusual). While housing is historically an appreciating investment, and interest rates are quite low with good credit, maintaining a house costs a boatload of money, which may approach or even exceed the costs of renting or leasing. While accumulated equity is a salient rallying cry, a house can also be an albatross; it can tie you to a geographic area, preventing nationwide or even statewide job searches.

I have no fewer than three friends in their early to mid-twenties who are looking to buy houses, but without (in my opinion) any compelling reasons to do so. Paying rent every month is hard, and having a house is the holy grail of the American dream because it allows you to accumulate lots of stuff, but by renting and keeping your belongings to a reasonable minimum, you are much more flexible and mobile.

Picturing a fairytale future

I am amazed by how many women who are otherwise progressive feminists, yet still yearn for the “rich husband” who will wipe out their student loans and finance their unsustainable lifestyles. This is a profoundly demeaning and patriarchal idea, and yet, for many, it remains more appealing than self-discipline and personal responsibility!

Of course, it would not be fair to criticize young women without also criticizing young men who are aimless and adrift, not working toward a prosperous career nor even pursuits that provide meaningful personal fulfillment. In either case, descending into “magical thinking,” where one relies for hope on some black swan, external event such as winning the lottery or receiving an incredible job offer, becomes far too common. Self-discipline is a bitter pill to swallow, and is something that probably must come about by an internal impetus for meaningful change, rather than external pressures. It may also be disconcerting to recognize that self-discipline is a cumulative process, because it requires admitting that years or decades have basically been frittered away. However, our mortality coupled with the unidirectional nature of time indicts the present day as perennially the best and soonest feasible time to initiate meaningful change. While you may have to lower your fairytale expectations if advanced age, a criminal record, or enormous debts or obligations are present in your life, this does not mean you should give up. Further, the process of applying self-discipline may be enjoyable in itself (indeed, if it is not, persistence is difficult).

Conclusion

In encouraging personal financial literacy, as with any other educational ambition, criticizing and denigrating people for their ignorance, bad choices, and ridiculous beliefs often pushes them away. “Sneaking in” belief change in small, measured quantities, without labeling it as such, may be more efficacious. Moreover, maintaining an encouraging, forward-looking attitude that recognizes individual needs and individual levels of understanding is almost unarguably superior to belittlement. It is my hope that my online course on the Udemy platform, Introduction to American Personal Financial Literacy, currently under development and slated for completion in April 2016, partially fulfilling the requirements of my Master of Arts degree in Applied Learning & Instruction at University of Central Florida, will recognize these individual needs and encourage meaningful learning and change, without overwhelming or belittling students, encouraging a growth mindset throughout.

Personal Finance

There are many opportunities and techniques with personal spending and promotional offers that can allow you to save or receive credit or money. I am always surprised at how many people do not take advantage of these opportunities despite having sufficient free time and technical ability. One of the most obvious is buying gift cards at a discount from personal resellers or intermediaries. While there are varying degrees of risk doing this, if you use a credit card you can always request a chargeback, and for discounts of over 10% at stores you were going to shop at anyway, they are often worthwhile. For example, Gift Card Mall on eBay used to commonly offer OfficeMax gift cards at 20% off (a $50.00 card for $40.00), which I purchased and used at OfficeMax to buy U.S. postage “forever” stamps at 46¢ each, just days before the increase to 49¢. With the 20% gift card discount, I was effectively saving 25% and the stamps were costing me about 37¢ each.

Using cash is anathema to me. Besides avoiding being tracked, there are no hard advantages to using cash for the buyer. The buyer is at the mercy of the seller’s refund policy if sold a defective item, yet is usually paying the same amount that a credit card user who is receiving 1-2% or more cashback, buyer protection, extended warranties and insurance, and an interest-free loan from the lender. Except in the cases of receiving cash discounts, avoiding credit surcharges, or haggling, any benefits the buyer receives by using cash where credit is accepted are purely psychological—such as spending less and avoiding high interest rates due to poor repayment habits. People who are able to pay their statement balances in full before the due date 100% of the time are better off using credit. Of course, with a typical interest rate of 18%, carrying a balance even one month costs 1.5% of the principal, which immediately negates the cashback earned. Every month after that is a loss.

Many credit cards and bank accounts offer financial incentives for opening accounts and using them. These are primarily one-time bonuses but there are also some continuing bonuses that you can receive every month or quarter. For example, the Chase Sapphire Preferred credit card typically offers a waived annual fee and 40,000 point bonus after spending $2000.00 in the first three months, and the points can be worth $400.00 cash or up to about $600.00 if transferred to Southwest Airlines, United Airlines, Amtrak, etc. for traveling. $2000.00 in spending can be “manufactured” by loading money to your American Express Serve account, sending money to your spouse or a family member using Amazon Payments, or it can simply be reached by buying things you would have bought anyway. [2014-09-11 Update: Amazon Payments is ending person-to-person payments on 2014-10-13.] In March 2014, First Niagara bank of Buffalo, NY was offering a $250.00 bonus to new checking account holders after they received $250.00 in direct deposits, made five bill payments, and used their debit cards 10 times. These were easy requirements to meet even for people who are unemployed and not receiving pensions or social security, because transfers from PayPal or other services and banks were counted as direct deposits. Accounts can be opened by customers residing anywhere in the United States through correspondence—which requires providing information online and mailing a copy of your signature. While Bank of America, Wells Fargo, and U.S. Bank typically offer modest bonuses that require jumping through more hoops, Chase Bank and Citibank commonly offer a $200.00 bonus for opening a checking account with easy requirements, albeit redeeming the Citibank reward points at face value requires redeeming them for a check to your mortgage or student loan issuer (they send the check to you, written to the lender, but do not verify the existence of the loan—so you can deposit the check to your account with the institution it is written to, such as another bank).

Examples of continuing bonuses on credit cards include the Bank of America Better Balance card and Discover It card. The BoA BB card pays you $30.00 every quarter provided you have a statement balance greater than $0.00 every month and pay more than the minimum payment each month (or only the minimum payment if the statement balance is below ~$25.00 and is equal to the minimum payment). I have had this card over a year and have received $120.00 in bonuses. While this pales in comparison to many credit cards which offer $500.00 or more, hopefully the Better Balance card will continue for years, and the card has the added bonus of typically coming with a 0.00% promotional interest rate for 12 months. The Discover It card offers 5% cashback on up to $1500.00 in purchases in rotating categories each quarter. The current quarter offers 5% back on purchases at gas stations, and I was able to find a gas station that allowed me to buy $500.00 OneVanilla Visa prepaid cards using credit. These prepaid cards have only a $4.95 fee and can be used to purchase money orders at Walmart or Winn-Dixie, or loaded to an American Express Bluebird account and used to pay bills such as credit cards and mortgage payments, thus reducing their opportunity cost. Thus you can make $60.15, or more if redeeming your Discover cashback for gift cards that offer a 20% redemption discount (i.e. a $25.00 Staples gift card for $20.00 in Discover cashback rewards). ShopDiscover also offers cashback for online purchases at participating retailers that is often higher than other cashback sites, such as 5% at Target.com, TigerDirect.com, and Staples.com.

Examples of continuing bonuses on bank accounts include the Extra20 Checking account by Santander Bank of Boston, MA (formerly Sovereign Bank) and the Discover Bank Cashback Checking account. The former bank offers a $20.00 monthly bonus when you have both a checking and savings account with them, receive $1500.00 or more in direct deposits to the checking account per statement cycle, and pay two or more bills per statement. The bonus is deposited to your savings account each month. Accounts can be opened through correspondence (mail/web) nationwide and Santander is liberal in what they count as direct deposits (transfers from PayPal, Amazon Payments, and other banks currently work). As with the bill payment requirement for the First Niagara bonus, the bill payments could just be a couple dollars toward your credit card bills—you do not have to pay an entire bill. The Discover Cashback Checking account offers 10¢ back on every debit card purchase, bill payment, and check written per month, up to a maximum of 100 items ($10.00 back), though prior to July 1, 2014, the bonus was unlimited. Before August 1, 2013, the Chase Freedom credit card offered 10 extra points back on every purchase, which was then eliminated. The Discover offering is a suitable (though less potent) replacement, and I typically use it for purchases below $7.00 that would only earn 1 point per dollar on my credit cards. You can also pay a couple dollars to all of your credit cards several times per month to get closer to the $10.00 monthly maximum.

There are many offers which I would like to take advantage of but don’t have the equipment for or am unable to be approved for. Isis Mobile Wallet (which is soon to be renamed) offers $1.00 back on up to 50 purchases of $1.00 or more per month and many other significant offers that can be used to make hundreds of dollars, but is not compatible with my smartphone or carrier (Metro PCS). I would love to get the Fidelity Investment Rewards American Express credit card which offers 2% cashback on all purchases, but it is too difficult to get approved for. The Chase Ink Plus and Ink Bold credit and charge cards offer opening bonuses of $700.00 and $500.00 with $5000.00 spending and 5% back on utility bills and office stores, but I have had no luck being approved for them by claiming my photography or reselling hobbies as businesses. There are also many bank account bonuses that are regional and unavailable to Florida residents.

While bank account bonuses in the United States are considered income by the Internal Revenue Service and you will usually receive a 1099-INT or 1099-MISC form in the mail in January of the following year, credit card rewards and bonuses typically require spending a certain amount. Thus, the IRS considers them a discount on purchases made, which is not income. Thus, no income tax must be paid on most credit card bonuses.

Credit card and bank account bonuses require successfully opening the accounts you are applying for. Many bonuses are unavailable to people who have poor credit or banking histories, because credit card issuers and banks will not even allow such individuals to open the accounts the bonuses are offered on, if any accounts at all. Obviously, many damaged credit histories and permanently overdrawn bank accounts result from poor decisions and negligence by the account holders, institutional errors, and disgust with penalty APRs and cascading overdraft fees which result in borrowers giving up completely. It is best to avoid these issues completely by never missing a payment or overdrawing a bank account. However, you should also regularly check your Experian, TransUnion, Equifax, ChexSystems, and Early Warning Services reports for incorrect data, and even correct negative information can sometimes be disputed. The burden of proof may be on the institution rather than you, and the negative information could be removed if your creditor fails to produce supporting documentation. This is particularly true with fraudulent medical bills (hospitals are notorious for over- and double-billing).

Next month, I am becoming a graduate student at University of Central Florida and am taking some face-to-face classes which will require me to drive from the Daytona Beach, FL area to the Orlando campus approximately 25 times next semester. This will require 2800 miles of driving, and I drive a van which only gets 18 miles per gallon of gas on the highway. This means I will use about 156 gallons of gas to commute next semester, at a cost of about $545 at $3.50 per gallon. Even a used, modestly-priced, fuel-efficient car would probably use half as much fuel at best, which would save me only $272.50 on gas for my classes next semester. I considered buying a car, and some friends say they would to avoid wasting so much gas, but it would actually be more expensive to replace the van with a car, especially considering the van has low mileage, has been very reliable, and lacks resale value due to nonfunctional air conditioning and cosmetic problems. Plus, I am safer in a van and can carry up to eight passengers or 1536 lbs. of cargo if needed. It would be financially unwise to replace the van, but many people would make this decision with a flawed mathematical analysis, or none at all. Basic arithmetic skills are essential to effective personal finance.

I am using a service called Savings2Go which provides gift cards at 20% off for Home Depot, Target, Best Buy, Applebee’s, and other stores and restaurants. You can buy up to $75.00 in gift cards per store per quarter, and they offer a $15.00 rebate on grocery purchases each quarter, for a $14.95 monthly fee. When I called to cancel after the end of my 30-day trial, they offered to reduce the fee to $29.95 per year and to increase the grocery rebate to $25.00 per quarter. Having agreed, I have already received $50.00 in checks which exceeds the $29.95 fee I paid. I enjoy using the Applebee’s gift cards to eat out with friends, and have bought other gift cards for personal use or to share at-cost with family and friends. Another service called LeisurePlus, also administered by Stonebridge Benefit Services, offers 20% off on restaurant gift cards and gas gift cards for BP, Shell, and ExxonMobil, for up to $75.00 in gift cards per store per quarter. They charge $9.95 per month and have a 30-day money-back guarantee, so I signed up in mid-June and bought a total of $450.00 of gas gift cards in June (2nd quarter) and early July (3rd quarter), paying only $360.00. Then, I canceled before the 30 days ended and got my $9.95 monthly fee back. I found out about these services through telemarketing calls, and while there was a class action lawsuit against Stonebridge in 2011 and there are numerous complaints against them, I have only saved money with them. I am also in a trial period with Everyday Bargains to get 20% off on up to $75.00 of Walmart, Publix, and Winn-Dixie gift cards. However, I cannot recommend Savings Galore, Advantage Plus Legal, Family Saver, or Magazine Rewards Plus, since they never sent the membership packets or gifts and I ended up having to complain or request chargebacks against them with my credit card issuer.

One cool fact about credit cards is they can actually be leveraged to provide an indefinite, interest-free loan to the cardholder. Consider that Amazon Payments allows anyone to send $1000.00 per month to another person on credit with no fees—and the recipient can be a spouse, significant other, family member, or friend who could remit the balance and also send $1000.00 with his or her credit card, or even as an authorized user on the initiator’s credit card. [2014-09-11 Update: Amazon Payments is ending person-to-person payments on 2014-10-13.] The “Serve” prepaid card by American Express also allows anyone to load up to $1000.00 per month from a credit card to their Serve card (as $200.00 per day) and immediately withdraw it to their bank account, with no fees. Credit cards provide grace periods of at least 21 days after the statement ends to pay the statement balance without incurring interest, and to avoid interest, only the balance accrued during the previous statement must be paid before the due date. For example, if your statement ends on July 18 and payment is due on August 12, you could have charged $4000.00 from June 19 to July 17, and subsequently charge $3000.00 more between July 18 and August 12, yet only pay $4000.00 before August 12. In this example, the $3000.00 charged between July 18 and August 12 would post to the August 18 statement and not have to be paid until September 12. Thus, you could always owe $2000.00 or more yet never pay interest, and additionally be earning 1-2% in cashback every time you borrow more. Some new credit cards offer a 0.00% promotional APR for up to 24 months, so you can just max them out and make the minimum payment every month until the promotional rate ends, while leveraging the interest-free credit line into low-risk investments or no-risk certificates of deposit and Kasasa checking and savings accounts. While this practice may increase your credit utilization above 30% and negatively impact your credit score, the impact is far less than a delinquent account and disappears when you pay the balance.

I definitely recommend the “Hot Deals” forums on Slickdeals.net and FatWallet.com for finding good deals on many items. They are particularly good for electronics. There are other forums for finance, coupons, and drugstores which can also be helpful. It is easy to end up buying things you don’t need, so it is important to only search for things you actually need, but it is also important to recognize opportunities that are too good to pass up, and to get in on them before they expire. Make sure to use cashback sites such as Ebates, FatWallet, BeFrugal, Mr. Rebates, Plink, ShopDiscover, Chase Ultimate Rewards Mall, BankAmeriDeals, and American Express Offers to “click-through” and get money back, but also be careful to read the terms and confirm the items you are buying are not excluded. Also, many cashback sites have minimum thresholds to reach before you can cash out, and inactivity fees if you forget about your cashback balance. You should probably use LastPass, KeePass, or another password manager to keep track of all the email addresses, usernames, and passwords you are using for various websites.

If you do a lot of printing at home, one really basic thing you can do to improve your finances is to buy a Brother HL-2140 or HL-2240 black and white laser printer (which go on sale for $49.99 commonly). Particularly if you print a lot of documents that don’t require color, using re-manufactured toner cartridges in these printers can cost as little as $10.00 to print 2500 pages. When I see friends spending $50.00+ on ink cartridges that cost them upwards of 15¢ per page, I always try to convince them to make the switch.

Usually, banks and big businesses rape consumers with fees, high margins, and shady tactics. However, they use some of this money for marketing campaigns and loss leaders that you can actually make money on. It is very satisfying to be part of the small percentage of smart consumers who cost these institutions money through offers and mechanisms that they freely advertise.

While there are many avenues I did not touch on in this post, I find banks and credit cards exciting because they provide large rewards with less time and effort than more intensive practices such as rebates and coupons. However, that is not to say this should be an “either/or” proposition. Depending on the value of your time and what you like to do with it, it is possible for you to pursue all these avenues and more. Sometimes, you can even get back more than you paid for an item with a mail-in rebate. If an item is offered for free after rebate at Newegg or Staples, and you have a 10% or 20% off coupon, you can get back 10% or 20% more than you paid. Usually, even rebates that say “rebate value must not exceed purchase price” do not enforce this stipulation. There is always a difference between the terms in writing and in practice, which can be more lenient rather than strict. You can always argue against interpretations that are overly strict, while quietly accepting grace periods, courtesy offers, and other gifts without complaint. If this bothers you, just think of all the other people who have no issue with it.

Financial literacy is barely taught in grade-school or college, yet people who lack it have a lower quality of life and squander much of their labors. The unidirectional nature of time means you cannot give advice to your younger self or modify the past in any way. Like any area of life, if you want to improve your finances, accepting and making peace with your prior mistakes and ignorance is an unavoidable step. It is always better to make a positive change now than later or never. There are many notions, beliefs, and myths you will have to dispel, replace, and overcome on this path. I can promise you it will be worth it.