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Obama Administration Releases ‘Educator Toolkit’ for the 2011 National Financial Capability Challenge

The US Treasury just released the 2011 "toolkit" which is publicly available to educators to use in their classrooms.

Per the release notes,

Empowering students with the knowledge they need to make smart financial choices about saving, budgeting, and investing for the future is good for the long-term strength of our economy,” said Treasury Secretary Tim Geithner. “It will help ensure that young people have the skills they need to achieve financial security, and that will help us continue to build this recovery on a strong and sustainable foundation.

Our students need to graduate high school ready for college and career if they’re going to compete in a global economy,” said U.S. Education Secretary Arne Duncan.  “Incorporating financial literacy, through Treasury’s online educator toolkit or other significant learning materials, will encourage students to make smart long-term investments, such as preparing to pay for college.

The toolkit will cover the five core competencies the US Treasury believes to be crucial to financial ed.

  • earning
  • spending
  • borrowing
  • saving
  • protecting against risk

 

The online exam will be available to high school students beginning March 7th.  Of course, we'll be taking the exam here, and will report back as to what we think of the program overall.

This is a great resource for all of us dedicated to the financial education and independence that our students deserve.

 

Source- challenge.treas.gov/toolkit/

 

Christmas shopping is over and 2011 is coming! What does my Credit Report look like!?

There are at least a dozen different "Free Credit Report," sites out there to choose from. The one that I've always recommended for a guaranteed, no hassle credit report is www.annualcreditreport.com.

This site is not only sponsored by the 3 major credit reporting agencies: TransUnion, Equifax, and Experian; but it's also the only one that really is completely free. Of course, there are some "extras," they may offer you (like the actual score) - but no harassment afterwards, and no worry about 3rd parties accessing to your personal info.

Remember, having a clean report (as in payment histories on revolving credit) dictates your score, and these can be checked for free through www.annualcreditreport.com.

Also, pulling your credit report is more than just your score - it's your first line of defense in keeping up with identity theft or fraud.

College students should be checking their credit reports at least once a year, maybe more if your especially "liberal" in your credit lines.

Working adults should be checking just as often.  You can even check each report individually at different times of the year, to get throughout-the-year updates.

Happy New Year!

Shopping for Auto Insurance – there’s more to it than choosing the Gecko…

Auto Insurance is one of those things - we almost all use it, but most of us know little of the details.

It's also one of the first major expenses you'll deal with as an adult.  So, we decided to break down the basics and identify some online sources from which you can get more information about auto insurance.

One of the first things to remember when shopping for auto insurance is to do just that - shop.  Too many people, teens included, will settle or go with the easiest option.  Knowing what you're looking for and actually calling or going online to compare companies you are considering will give you much more honest information than just allowing an insurance company to "shop for you."  Later in life, there may be some bundling you can do, like many households do with television, telephone, and Internet.

First of all, let's define auto insurance - it's simply a way to protect yourself and your assets in case of an accident.  There may not be much to protect right now, but there certainly will be in the future.  Driving without auto insurance is simply not an option.  Nearly everyone will have some accident at some point in their life (probably sooner rather than later) and therefore knowing your coverage, and choosing a reputable company can make all the difference.

For every state there are at least 3 figures we'll need to pay attention to:

  1. How much coverage is required for an individual injured in an accident,
  2. How much coverage is required total for all those injured in an accident, and
  3. How much coverage is required for property damage in case of accident.

Some states are also requiring Personal Injury Protection (PIP), for oneself, or Underinsured/Uninsured Motorist Coverage.  This means that even though everyone should theoretically have auto insurance, some may be carrying too little or illegally operating a motor vehicle with no insurance at all.  This is added coverage that will protect the insured party, sometimes referred to by the term "Full Coverage."

Now, just because each state has a minimum (some even have no minimum) for coverage amounts required, those amounts may not be enough.  Again, this is protection for yourself and your assets - so if someone is seriously injured or property is severely damaged, those individuals involved could sue for more than what your insurance covers- which means you'll have to pay out of pocket.  So, the key is to find the right balance of protection and cost effectiveness.  Ideally, it  is safe to say that a driver would want to carry more than the minimum required state coverage.

www.Edmunds.com is a great place to research automotive related topics, insurance included.  They have a great list of each states minimum coverage requirements.

State
Liability limits (in thousands of dollars)
Uninsured/Underinsured motorist coverage required?
Alabama
25/50/25
No
Alaska
50/100/25
No
Arizona
15/30/10
No
Arkansas
25/50/25
No
California
15/30/5
No
Colorado
25/50/15
No
Connecticut
20/40/10
Yes
Delaware
15/30/10
No
D.C.
25/50/10
Yes
Florida
10/20/10
No
Georgia
25/50/25
No
Hawaii
20/40/10
No
Idaho
25/50/15
No
Illinois
20/40/15
Yes
Indiana
25/50/10
No
Iowa
20/40/15
No
Kansas
25/50/10
Yes
Kentucky
25/50/10
No
Louisiana
10/20/10
No
Maine
50/100/25
Yes
Maryland
20/40/15
Yes
Massachusetts
20/40/5
Yes
Michigan
20/40/10
No
Minnesota
30/60/10
Yes
Mississippi
25/50/25
No
Missouri
25/50/10
Yes
Montana
25/50/10
No
Nebraska
25/50/25
No
Nevada
15/30/10
No
New Hampshire
Not required 25/50/25
Yes
New Jersey
15/30/5
Yes
New Mexico
25/50/10
No
New York
25/50/10
Yes
North Carolina
30/60/25
Yes
North Dakota
25/50/25
Yes
Ohio
12.5/25/7.5
No
Oklahoma
25/50/25
No
Oregon
25/50/10
Yes
Pennsylvania
15/30/5
No
Rhode Island
25/50/25
Yes
South Carolina
25/50/25
Yes
South Dakota
25/50/25
Yes
Tennessee
25/50/10
No
Texas
25/50/25
No
Utah
25/65/15
No
Vermont
25/50/10
Yes
Virginia
25/50/20
Yes
Washington
25/50/10
No
West Virginia
20/40/10
Yes
Wisconsin
Not required 25/50/10
Yes
Wyoming
25/50/20
No

It is easy to see that each state will differ, and it's important to know what your state requires.  This list may change over time, so it's important to research at the time you will be purchasing.  Something that many consumers don't know is that each state has a Department of Insurance.  The Insurance Consumer Advocate Network (ICAN) keeps listings for each state, so this is a great place to learn about the latest updates to each states minimum coverage and laws regarding auto insurance coverage.

Also, keep in mind that just because you can afford a certain vehicle's monthly payment - insurance may be completely unaffordable based on that vehicle.  For instance, newer vehicles, sport/luxury, or even a vehicle that is considered easy to steal, all may dramatically affect insurance rates.

These are just the basics of auto insurance - there's a lot more that can be analyzed to find cost savings.  For example, it may be most cost effective to purchase insurance right from an agency directly as a young adult.  As one gets older, however, and starts to accumulate more assets like a house, or begins to start a family, an insurance agent can be a great tool to bundle policies and get a better level of service than when purchased directly from the company.  Still, more and more companies will sell insurance directly to an individual now; this is quite different than years ago when nearly all business was done through a local insurance agent.

More information can be found on Edmunds.com's Little-Known but Important Car Insurance Issues

Sources -www.Edmunds.com;

www.ican2000.com

Students! Are you ready? U.S. News & World Report hints that some high school students may not be.

The September 2010 issue of U.S. News & World Report takes a heavy focus on college in 2010. Let’s be honest- this is not the best time in our Nation’s history to be attending college; budget cuts and unemployment aren’t helping, and students are going to be the ones to suffer. What may be even more disturbing than the budget cuts to our major universities, however, is the quality of student attempting to attend. Students are not coming in with the preparation and analytical ability they once had. Carol Frey writes in her article “Crash Course in Preparedness,” Many students are arriving on campus with few tools to succeed. Of the high school students in the class of 2009 who took the ACT test, for example, fewer than one quarter met each of the benchmarks for college readiness in math, science, English, and reading. Just over a quarter met none of them. The cause? This is a harder one to determine. Frey suspects it is from a lack of quality reading: books that give an analytical approach, essentially taking the reader through the motions of forming an argument and actually seeing it through. More and more often, students are citing Wikipedia instead of scholarly journals- a possible sign that all this fast access to information may be moving students to be poorer thinkers than in previous years of entering freshman. The internet is an amazing resource, but that doesn’t mean students don’t need the classics that parents and older siblings were exposed to. Furthermore, some students are needing full refresher courses in the core classes such as math, reading, and even science. It is suggested that students begin brushing up on these topics during the summer before their freshmen year of college, so they enter their undergraduate studies at the level they’re supposed to. With more and more colleges turning away perfectly good students, it will be important for all those applying to be prepared- and we’re not talking about cool laptops and tons of ramen noodles! Read article: A Crash Course in College Preparedness via U.S. News & World

Financial Aid Anyone?

I really like the publication put out by Charles Schwab called, On Investing. The Fall 2010 edition had a great resource for parents and students alike – regarding Financial Aid. Although there is quite a bit of detail in the article regarding specific strategies available to parents, the highlight of the article is Mark Kantrowitz and his project. Kantrowitz founded a Financial Aid information website called FinAid.org. This site is an awesome resource for anyone – teacher, parent, or student – looking for information and direction with the various processes when applying for Financial Aid. I’ve checked it out, and it seems like the site is straightforward and organized, something helpful to everyone, I’m sure. Hopefully Andson will be able to provide more information and resources regarding relevant Financial Aid information in the future thanks to individuals and ideas like this. I’m still looking for a link to Schwab’s, On Investing publication, but it doesn’t look like it appears online- I’m checking on this. Check it out at www.FinAid.org. Source: Charles Schwab On Investing publication (Fall 2010)

PASS by American Express – A new way to give teens their allowance…

It is a wonderful feeling to be able to give your kids an allowance or spending money. It’s a little less wonderful trying to figure out how they spend your hard earned cash. PASS by American Express is trying to help both parents and teens by providing a reloadable credit card/atm card that you can give to your teens.

This card is a wonderful idea!  One, it allows both parents and teens to track spending habits, and gets them into an adult mentality of handling their money: balancing their account, being more aware of their spending, amongst others.  For parents, it provides all the safety that an American Express credit card gives, such as fraud prevention and 24 hour a day customer service; better than that- kids cannot overspend.  No more worries about sending a teen away to college with the family credit card- now you can give them a limit that cannot be exceeded.  Parents can fund the card by linking their bank account, and only they can authorize more funds to be added.

The card is also hip.  It may seem silly, but kids like a tailored experience when they go online – it keeps them engaged.  American Express has done an awesome job of trying to keep the site and the card very much about teens.  Teens will have their own login, and can monitor spending and balances- much like the typical online banking experience.  The card comes in a variety of colors and you can even add your own images to the card for free.

Now for some of the Cons.  The card, like most other credit card products, does come with fees.  It costs $3.95 per month to use the card (though those fees are waived for a year if you sign up now) as well as $1.50 per atm transaction (the bank may also charge a fee for using their atm).  Now although the costs are minimal in comparison to ever having an over-the-limit fee on a credit card, they still are monthly fees amounting to nearly $50 per year- similar to the annual cost of a credit card.  It seems like the card is also better suited for an emergency atm card, or the occasional withdrawal, versus using it as many use bank-issued atm cards – those fees can add up!

There are also a few states that the card cannot be issued in:

The PASS Card is not available for sale in Arkansas, New Hampshire and Vermont. The PASS Card is also not available in California at this time. Cards purchased by residents in other states cannot be shipped to these four states. In addition, American Express does not sell or ship the Card outside the United States.

 

More information is supplied in the PASS FAQ section of the site

Overall, I feel that if parents can afford the fees, the PASS by American Express could be a great learning tool to get kids to care about their finances in a more responsible manner rather than simply giving them cash each week.

Source: PASS by American Express PASS by American Express FAQ