Category Archives: Habits

Heart Disease Leading Cause of Death in the United States

Posted on by

“Do Your Part, Care for Your Heart”

There is a silent and deadly pandemic raging in America every year. That pandemic kills on average more than fifty thousand Americans each month. That silent pandemic is called Heart Disease.

Heart disease is the leading cause of death in the United States. More than 610,000 Americans die of heart disease each year according to the Centers for Disease Control and Prevention (CDC). That’s one in every four deaths in this country.

Almost 70 percent of Americans are afraid of dying of cardiovascular heart disease. Despite this, only 38 percent know or monitor their blood pressure, and just 18 percent know their body mass index (BMI), both of which are essential factors in overall heart health. So, it’s clear that more Americans need to know their numbers and keep their blood pressure, cholesterol and blood sugar at normal levels. They need to learn more about heart health and how they can manage their risks.

The term “heart disease” refers to several types of cardiovasculaheart conditions. The most common type is coronary artery disease, which can cause heart attack. Other kinds of heart disease may involve the valves in the heart, or the heart may not pump well and cause heart failure. Some people are born with heart disease.

Americans at Risk for Heart Disease

Heart disease occurs when a substance called plaque builds up in your arteries. As plaque builds up in the arteries of a person with heart disease, the inside of the arteries begins to narrow, which lessens or blocks the flow of blood to the heart. Plaque can also rupture (break open). When it does, a blood clot can form on the plaque, blocking the flow of blood.

Smoking, eating an unhealthy diet, and not getting enough exercise all increase your risk for having heart disease. High blood pressure, high blood cholesterol, diabetes, and smoking are key risk factors for heart disease. About half of Americans (47%) have at least one of these three risk factors.

Several other medical conditions and lifestyle choices can also put people at a higher risk for heart disease, including:

  • Diabetes
  • Overweight and obesity
  • Unhealthy diet
  • Physical inactivity
  • Excessive alcohol use

Heart disease is the leading cause of death for people of most racial and ethnic groups in the United States, including African American, American Indian, Alaska Native, Hispanic, and white men.

A healthy heart comes from lots of little lifestyle changes that become a habit. And, heart-healthy lifestyle changes can help lower your risk for complications. A heart-healthy lifestyle is all about listening to your heart and giving it what it needs to thrive (even if that means ignoring your stomach’s request for a second donut). A healthy heart is a reward that’s well worth some minor lifestyle changes.

Your doctor also may prescribe medication to treat the disease. Talk with your doctor about the best ways to reduce your heart disease risk.

Think fitness.

Spending time in natural environments can benefit health and well-being.

There’s plenty of science establishing the health benefits of exercise, particularly outdoors. A 2019 Scientific Reports study of nearly 20,000 Britons showed people who spent at least two hours per week in nature were far more likely to report good health and well-being than those who didn’t.

Think healthy eating.

The slogan…”healthy eating for a strong heart beating” is one to live by. You can lower your risk of heart disease by making several small changes at each meal and by choosing foods that are good for your heart. Eating a healthy diet of whole grains, high fiber and lean sources of protein, and exercising at least 30 minutes daily can help control or delay age-related health problems associated with aging, like high blood pressure, obesity, heart disease and diabetes.

Most standard American diets are based on foods you shouldn’t eat. Instead, Americans should focus on foods that are good for your heart. They should eat more vegetables, fruits, and whole grains. The fiber in these foods helps lower “bad” LDL cholesterol. They should eat more beans, legumes (like lentils), seeds, and nuts. Additionally, Americans should:

  • Put healthier fats to work for you.
  • Favor unsaturated fats, such as canola, olive, and peanut oils.
  • Eat fish that are high in omega-3 fatty acids, including albacore tuna, salmon, and sardines. Omega-3s seem to lower triglycerides, fight plaque in your arteries, lower blood pressure, and reduce your risk of abnormal heart rhythms.
  • Eat lean protein.
  • Make beans, nuts, fish, and chicken your mainstays, and keep portions in check.
  • The American Heart Association suggests you eat at least two 3.5-ounce servings of fish a week.

Think canine companionship.

Dog ownership is associated with decreased cardiovascular risk and with lower risk of death over the long term.

Many studies have linked dog ownership to health benefits, including more exercise, lower blood pressure, improved lipid profile, and reduced stress. A meta-analysis published in the American Heart Association journal Circulation in 2019 examined 10 studies over seven decades involving nearly 4 million people. It concluded dog owners had a 24% lower risk of death from any cause than their petless peers during the course of the studies.

Be heart smart.

Make smart choices and improve your heart health. It’s about individuals taking care of their own hearts every day. Everyone can benefit by following heart-healthy practices:

  1. Exercise regularly (at least 2.5 hours per week).
  2. Quit smoking.
  3. Lose weight.
  4. Know your BMI, blood pressure and A1C.
  5. Eat heart-friendly foods.
  6. Eat chocolate and drink wine (in moderation).
  7. Don’t overeat.
  8. Learn to manage stress.

The fight for heart health awareness truly is just that: a fight. Heart disease is a formidable foe that’s responsible for almost 25 percent of all deaths in the U.S., more than any other cause of death.

Our health-care system would not be so overwhelmed by COVID-19 right now if it was not already overwhelmed with preventable chronic illnesses. About 75 percent of the $2.2 trillion we spend on health care each year goes to treat chronic illness like heart disease, the Centers for Disease Control estimates. And, it is estimated that 40 to 70 percent of those illnesses could be prevented.

In 2018 the United States shelled out $329 billion to treat heart disease and strokes, the American Heart Association calculated. About 80 percent of those cases — $263 billion worth — were caused by poor diet, lack of exercise, alcohol use and obesity.

References:

  1. https://www.cdc.gov/heartdisease/facts.htm?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fdhdsp%2Fdata_statistics%2Ffact_sheets%2Ffs_heart_disease.htm
  2. https://www.cdc.gov/heartdisease/docs/ConsumerEd_HeartDisease.pdf
  3. https://www.heart.org/en/news/2020/06/10/instead-of-a-tie-think-about-healthy-gifts-and-gratitude-for-fathers-day
  4. https://www.ahajournals.org/doi/epub/10.1161/CIRCOUTCOMES.119.005554

Healthy Habits of Diet and Exercise

Posted on by

Good Choices Today for a Healthier Retirement Tomorrow

Lifestyle choices you make today can lead to a healthier future and retirement. Eating a healthy diet of whole grains, high fiber and lean sources of protein, and exercising at least 30 minutes daily can help control or delay age-related health problems associated with aging, like high blood pressure, obesity, heart disease and diabetes.

It is important to develop habits of healthy eating and regular exercising; and, it is important also to set short- and long-term goals to achieve and maintain a healthy diet and exercise routine.

Make these five tips a habit and priority every day:

  • Try to be physically active for at least 30 minutes on most or all days of the week.
  • Eat plenty of fruits and vegetables.
  • Choose foods that are low in added sugars, saturated fats, and sodium. Avoid or restrict foods that are fried, processed and consist of refined carbohydrates.
  • Pick whole grains and lean sources of protein and dairy products.
  • Practice all five types of exercise—aerobic, endurance, strength, balance, and flexibility.

7 Habits to Help Build Your Wealth | U.S. News and World Report

Posted on by
By Paulina Likos. — U.S.News & World Report May 18, 2020

Successful investors practice these habits to be one step ahead of the market.

Develop a routine of successful investing habits.

When you’re investing for your financial future, practicing successful habits is a fundamental step in constructing a resilient portfolio. It’s evident that in the world of investing, money management can get complex. That’s why having the right habits ingrained in your investment approaches is important in bringing clarity to your decision-making and confidence in your portfolio management. Here are seven habits that will help guide you through investing decisions during unprecedented market movements.

Read more: https://money.usnews.com/investing/portfolio-management/slideshows/habits-to-help-build-your-wealth

Periodically review your investment plan.

Know what your specific financial goals are and develop an investment policy statement. An IPS is a plan that outlines investment objectives and goals for a particular investor drafted by the portfolio manager and their client. This can be a helpful tool to guide portfolio managers on implementing strategies to grow or preserve a client’s investments. Experts advise that clients stick with the initial plan even when drastic market changes occur; however, certain benchmarks should be monitored from time to time. You should examine your risk tolerance and investment plan every six months to ensure you’re on track with your investments when a financial crisis hits. “Changes will likely need to be made in accordance with a well thought out plan that was put in place before the first punch is landed,” says Tim Bain, president of Spark Assessment Management Group.

Invest in what you know.

While experienced investors can try to evaluate the quality of a company, more often than not, it can be difficult to define its overall valuation and understand its trends. Taylor Kovar, CEO of Texas-based Kovar Capital Management, says, “Don’t invest in something you’ve never heard of just because someone online said it was going to make you a millionaire.” It’s best to focus on companies with products that you’re familiar with, that way it will be easier to predict and understand the ebbs and flows of a company and, most importantly, help in managing your portfolio effectively. “Look in your closet [and] kitchen cabinet, and invest in the brand of the products you see,” he says. “This will help you invest in companies you actually enjoy. It’s like you are paying yourself every time you buy their products.”

Stay away from the latest fads.

Investors seeking yield in a low interest rate environment should try to steer clear of fads. This short-term phenomenon is prevalent during market underperformance and tends to be pretty risky. “It is psychologically very difficult to remain true to your patient investing convictions when it seems investors speculating in the latest fad (think cannabis or tech ‘unicorns’) are being rewarded,” says Robert Johnson, professor of finance at Creighton University in Omaha, Nebraska. There are plenty of other ways to diversify your assets rather than putting your money at risk with fads. “One doesn’t need to chase the latest trend to have investment success. Quite the contrary, chasing investment trends can be hazardous to your wealth,” Johnson says.

Be honest with your risk tolerance.

At any stage of your investing journey, it’s important to know if you are a conservative or aggressive investor. Defining risk tolerance is a habit that directly aligns with your financial goals. But sometimes, it can be unclear on how to determine where you lie on the risk spectrum. “Many investors tend to overestimate their level of risk tolerance, which causes them to sell at the worst times,” says Jerry Verseput, president at Veripax Wealth Management in Folsom, California. Market sell-offs like the one in March are good opportunities for investors to assess their feelings honestly as they saw the value of their investments drop.

Keep educating yourself.

An expert tip: Keep reading about how the market is changing. With the pandemic in mind, think about how habits and behaviors are changing in the short term, how that will affect the long term and how future trends might evolve. “What is going to be long-lasting in work and personal life? Do you want to be [investing in] Kodak film or the person investing in digital cameras? Don’t believe what you hear as much as know-how and where to find the facts,” says Peter Creedon, CEO at Crystal Brook Advisors in New York City.

Save for retirement.

Keep investing in your future by adding into your retirement account each month — that’s the power of dollar-cost averaging. Even if some months are fewer than others, allocating some of your income to retirement savings consistently puts long-term investors in a better position toward meeting their future financial goals. You can measure how successful you are as a saver by monitoring your retirement score, an estimate of what your retirement income may look like according to the steps you are taking to save now. This estimation will predict whether you’re on target on meeting your retirement needs or if you need to boost your allocation. It will also give you an idea of how much you will need for retirement and what changes you need to make that happen.

Know when to seek assistance.

Many individual investors try to find “do it yourself” methods for investing. There’s a misconception that successful investors should be monitoring the markets constantly and hold a finance degree, but most experts say the biggest hurdle is knowing when to seek help and how to find the right financial advisor. One tip: Find out what kind of experience the advisor has and which investing strategies they often use. “Make sure in an interview that the advisor shares your investing values and has a well-defined process to develop an investment policy statement for you and your goals,” says Jamie Ebersole, founder and CEO of Ebersole Financial in Wellesley Hills, Massachusetts. “If you and your advisor are not aligned on these important issues, it will make for a very frustrating relationship.”

Setting yourself up for investing success.

  • Periodically review your investment plan.
  • Invest in what you know.
  • Stay away from the latest fads.
  • Be honest about your risk tolerance.
  • Keep educating yourself.
  • Save for retirement.
  • Know when to seek assistance.

Sources:

  1. https://www.entrepreneur.com/slideshow/307635
  2. https://money.usnews.com/investing/portfolio-management/slideshows/habits-to-help-build-your-wealth

Habits of the Wealthy Anyone Can Adopt

Posted on by

“The reason why someone is either rich or poor can be traced back to daily habits.” Tom Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals”

Replace bad habits and behaviors. 

Aristotle, the 4th Century B.C. Greek philosopher, was attributed as saying, “We are what we repeatedly do. Excellence then, is not an act, but a habit.”

It has been said that nature abhors a vacuum, and the same can be said about habits and behaviors; it’s hard to replace a bad habit or behavior with nothing.

Instead of ceasing a bad financial habit or behavior, investors need to replace them with positive and successful financial habits and behaviors.

Rather than liquidating an account, encourage a replacement behavior like rebalancing, tax-loss harvesting, making more incremental portfolio adjustments, or putting in “crash bids” for high-quality stocks that may be trading at a discount.

It’s easy for individuals to be disorganized, without vision, undirected and at the mercy of poor habits. Embracing good habits often takes ficus, effort and desire to improve. Here are eight rich habits:

Habit #1: Exercise.

Exercised an average of 30 minutes, four days a week.

Habit #2: Build relationships.

Keep a running list of positive influencers in your life and regularly connect with them.

Habit #3: Visualize your goals.

Look at your goals—each set with an expiration date and action plan—when you wakes up and before bed. Attack goals with intensity. Keep goals top of mind, and always in sight. This will yield big results.

Habit #4: Read. A lot.

Start reading two books a month—focusing on emotional well-being, leadership, personal finance, and health

Habit #5: Practice affirmations.

Positive mindset provides a huge influence on one’s quality of life. The more you like yourself, the higher your self-esteem and well-being. Practice daily affirmations related to the most important areas of your life, focusing on faith, family and professional career.

The key to successful affirmations is choosing a mantra that’s tied to a dream and a realistic goal that are specific, achievable and true: “I’m working 10 extra hours per week to make $100,000 by next year.”

Habit #6: Volunteer.

There are many reasons to volunteer; use the opportunity to expand your network of like-minded people. It is an opportunities to give back and to create relationships with high-level thinkers.

Habit #7: Confide in a mentor who’s been in your shoes.

The most successful people on earth value mentors who’ve walked in their shoes and made it to the other side.

Habit #8: Practice gratitude.

Meditate or focus for a few minutes each morning and evening on what your grateful: spouse, kids, job and friends, to name a few. This habit helps you pay more attention to what’s going great in your life, puts life in the correct perspective, and keeps you focused on always moving forward with the right attitude.

Henry David Thoreau once said, “The mass of men lead lives of quiet desperation.”

If you want to remain unrewarded, unfulfilled and ultimately unhappy, then continue to accept your habits which are not useful to fulfilling your aspirations, dreams and desires.

Bonus Habit:

“If you want to become really wealthy, you must have your money work for you. The amount you get paid for your personal effort is relatively small compared with the amount you can earn by having your money make money.” John D. Rockefeller

References:

  1. https://grow.acorns.com/7-daily-rich-habits-anyone-can-adopt/
  2. https://grow.acorns.com/money-mistakes-wealthy-people-dont-make/

Accumulating Wealth

Posted on by

The wealthy accumulate wealth by being frugal

Frugality – a commitment to saving, spending less, and sticking to a budget – is a key factor in accumulating wealth, according to DataPoints’ founder, Dr. Sarah Stanley Fallaw.  Dr. Fallaw is also the co-authored “The Next Millionaire Next Door: Enduring Strategies for Building Wealth“.

img_0788

In an University of Georgia’s financial planning performance lab research paper examining the topic of “what does it take to build wealth over time”, the key findings were that those who were successful at accumulating wealth frequently exhibited the following behaviors:

  • Spending less than they earned
  • Having a long-term outlook on their financial future
  • Maintaining sound financial records
  • Keeping up with financial markets
  • Saving regardless of income level

Essentially, her research shows that anyone can accumulate wealth if they know the right steps to take. And, if individuals possess a certain set of characteristics, they may be more likely to become wealthy, according to Dr. Fallaw, who is also director of research for the Affluent Market Institute.

In her research, she found that six behaviours, which she called “wealth factors,” are related to net worth potential, regardless of age or income:

  • Frugality, or a commitment to saving, spending less, and sticking to a budget
  • Confidence in financial management, investing, and household leadership
  • Responsibility, which involves accepting your role in financial outcomes and believing that luck plays little role
  • Planning, or setting goals for your financial future
  • Focus on seeing tasks through to their completion without being distracted
  • Social indifference, or not succumbing to social pressure to buy the latest thing

In order to accumulate wealth, it is imperative for investors to understand that their underlying financial behavior and habits matter significantly. DataPoints research supports the notion that, “…individuals who successfully accumulate wealth often engage in basic and identifiable productive financial management behaviors.” And, they are often “socially indifferent” to the latest “must haves” and they resist the “lifestyle creep,” which is the tendency to spend more whenever they earn more.

To properly build wealth, financial experts recommend saving 20% of your income and living off the remaining 80%. Many wealthy individuals, who religiously follow this principle, espoused the freedom that comes with spending and living below their means.

Reference

  1. Grable, J. E., Kruger, M., & Fallaw, S. S. (2017). An Assessment of Wealth Accumulation Tasks and Behaviors. Journal of Financial Service Professionals, 71(1), 55-70.
  2. https://www.datapoints.com/2017/04/06/tasks-of-wealth-accumulators/
  3. https://apple.news/A4YIQ2ahsSKqzUG3rh1PmTQ

Conspicuous Spending and Skyrocketing Debt

Posted on by

“The hard truth is: the amount of money we earn is not always directly proportional to the amount of money we save because, more often than not, the more money we make, the more we spend.” David Bach, author “The Automatic Millionaire”

Let’s face financial reality and an inconvenient truth. Whether on Main Street, Wall Street or Pennsylvania Avenue, Americans continue to have and have long had a spending problem. Government statistics and other studies show that Americans’ spending has generally risen in the years since the 2008 – 2009 Great Recession. This trend is reflected in Americans’ general pattern of consumer spending and reflected in the rising levels of consumer, corporate and public debt which has topped a whopping $75.3 trillion in 2019 according to the stats coming out of the Federal Reserve.

Moreover, Gallup found in an April 2018 poll that people “…want see themselves as fiscally responsible, to some degree.” Even Americans who admit that they are spending more than they earn over the past several months are more likely to claim this is only temporary, rather than their normal. Those who say they are spending less believe it is permanent, despite what the numbers reveal.

And Americans’ have a predilection to say that they enjoy saving more than spending, which rose dramatically between the period before and the period just after the recession, has remained in place, even as the economy has improved.

Positive Cash Flow

Asked about their spending habits, Gallup results show that Americans are as likely to say they are spending the same amount as they used to (35%) as to say they are spending less (35%). Slightly fewer, 30%, report spending more. The takeaway is that Americans’ conspicuous spending habits will not change unless they first acknowledge it as a problem.

On the other hand, most wealthy people understand and stress the importance of spending much less than their means. Spending less gives them financial freedom which then translates into various opportunities such as career mobility, flexibility to venture into activities outside of work, and of course the ability to increase their wealth.

On the other hand, if Americans are spending more than what they earn, then even with a big six-figure income, they will be excessively reliant on each of their paycheck. It is very important that they are financially independent before the time comes when they decide to become self-employed or to retire. So it’s important to start saving, investing and accumulating wealth.

Simply spending less than we earn, eliminating bad debt, managing taxes and fees, paying ourselves first, starting to save early, automatically saving and investing for the long-term, and developing smart financial habits and positive financial mindset will result in huge results over a long period of time.

References:

  1. https://www.federalreserve.gov/releases/z1/20190307/z1.pdf
  2. https://usdebtclock.org
  3. https://news.gallup.com/poll/209432/americans-say-saving-spending.aspx
  4. https://www.bea.gov/news/glance

10 Money Lessons He Wished Heard — or Listened to — When Younger | MarketWatch

Posted on by

Updated: February 23, 2020

Jonathan Clements, author of “From Here to Financial Happiness” and “How to Think About Money,” and editor of HumbleDollar.com., is the former personal-finance columnist for The Wall Street Journal. He has devoted his entire adult life to learning about money.

That might sound like cruel-and-unusual punishment, but he has mostly enjoyed it. For more than three decades, he has spent his days perusing the business pages, reading finance books, scanning academic studies and talking to countless folks about their finances.

Yet, despite this intense financial education, it took him a decade or more to learn many of life’s most important money lessons and, indeed, some key insights have only come to him in recent years.

Here are 10 things he wished he’d been told in his 20s—or told more loudly, so he actually listened:

— Read on www.marketwatch.com/story/10-money-lessons-i-wish-id-listened-to-when-i-was-younger-2020-02-12

1. A small home is the key to a big portfolio. Financially, it turned out to be one of the smartest things he had ever done, because it allowed him to save great gobs of money. That’s clear to him in retrospect. But he wished he’d known it was a smart move at the time, because he wouldn’t have wasted so many hours wondering whether he should have bought a larger place.

2. Debts are negative bonds. From his first month as a homeowner, he sent in extra money with his mortgage payment, so he could pay off the loan more quickly. But it was only later that he came to view his mortgage as a negative bond—one that was costing him dearly. Indeed, paying off debt almost always garners a higher after-tax return than you can earn by investing in high-quality bonds.

3. Watching the market and your portfolio doesn’t improve performance. This has been another huge time waster. It’s a bad habit he belatedly trying to break.

4. Thirty years from now, you’ll wish you’d invested more in stocks. Yes, over five or even 10 years, there’s some chance you’ll lose money in the stock market. But over 30 years? It’s highly likely you’ll notch handsome gains, especially if you’re broadly diversified and regularly adding new money to your portfolio in good times and bad.

5. Nobody knows squat about short-term investment performance. One of the downsides of following the financial news is that you hear all kinds of smart, articulate experts offering eloquent predictions of plummeting share prices and skyrocketing interest rates that—needless to say—turn out to be hopelessly, pathetically wrong. In his early days as an investor, this was, alas, the sort of garbage that would give him pause.

6. Put retirement first. Buying a house or sending your kids to college shouldn’t be your top goal. Instead, retirement should be. It’s so expensive to retire that, if you don’t save at least a modest sum in your 20s, the math quickly becomes awfully tough—and you’ll need a huge savings rate to amass the nest egg you need.

7. You’ll end up treasuring almost nothing you buy. Over the years, he had had fleeting desires for all kinds of material goods. Most of the stuff he purchased has since been thrown away. This is an area where millennials seem far wiser than us baby boomers. They’re much more focused on experiences than possessions—a wise use of money, says happiness research.

8. Work is so much more enjoyable when you work for yourself. These days, he earn just a fraction of what he made during my six years on Wall Street, but he is having so much more fun. No meetings to attend. No employee reviews. No worries about getting to the office on time or leaving too early. he is working harder today than he ever have. But it doesn’t feel like work—because it’s his choice and it’s work he is passionate about.

9. Will our future self approve? As we make decisions today, he think this is a hugely powerful question to ask—and yet it’s only in recent years that he had learned to ask it.

When we opt not to save today, we’re expecting our future self to make up the shortfall. When we take on debt, we’re expecting our future self to repay the money borrowed. When we buy things today of lasting value, we’re expecting our future self to like what we purchase.

Pondering our future self doesn’t just improve financial decisions. It can also help us to make smarter choices about eating, drinking, exercising and more.

10. Relax, things will work out. As he watch his son, daughter and son-in-law wrestle with early adult life, he glimpse some of the anxiety that he suffered in my 20s and 30s.

When you’re starting out, there’s so much uncertainty — what sort of career you’ll have, how financial markets will perform, what misfortunes will befall you. And there will be misfortunes. he’d had my fair share.

But if you regularly take the right steps—work hard, save part of every paycheck, resist the siren song of get-rich-quick schemes—good things should happen. It isn’t guaranteed. But it’s highly likely. So, for goodness’ sake, fret less about the distant future, and focus more on doing the right things each and every day.

You can follow Jonathan Clements on Twitter @ClementsMoney and on Facebook at Jonathan Clements Money Guide.

Ideas for Frugal Living | Three Life Lessons | Fidelity

Posted on by

“The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully”

Three (3) lasting lessons from my frugal parent

Frugal living can help separate the important financial expenses from the not so important. Learn helpful lessons and ideas on frugal living here.

BY JEANNE THOMPSON FROM FIDELITY – 06/07/2019

I’ll never forget my first “real” vacation.

Most of our family vacations were camping trips where we slept together in a tent or a pop-up trailer and my mom cooked for my 4 siblings and me at the campsite. But the summer after fifth grade, my father decided to take me, my mom, and my 2 older sisters with him on a business trip to California.

That trip really stood out. I remember relaxing by the pool in sunny San Diego, sipping Shirley Temples with my sisters. We were fascinated by the elevators in our big hotel and rode them up and down until we were sternly told to stop. Simply put, it was paradise.

This trip was an unusual extravagance for my parents, too. You can’t raise 5 children on a limited income without being very frugal. And my parents, who were both first-generation Americans, were used to getting by on very little. Excess was not an option. At Christmas, my mom would save nice wrapping paper and reuse it; boxes were also recycled for many holidays to come. Folding a little piece of wrapping paper in half, writing a note inside, and taping it to a gift worked just as well as buying a greeting card. She reused everything from tin foil to plastic baggies. Her approach to money and possessions was pretty consistent: “Make do with what you have.”

These habits and quirks used to make us laugh. Today, I appreciate the example my parents set. I resist spending money on big-ticket items. My car, for instance, is a 2010 model and has 150,000 miles on it. And most of the furniture in our house is at least a decade old (if not a few decades). I’m not about spending a lot on furniture —with a teenage son, our couch becomes a dumping ground for lacrosse equipment more often than not. I even save nice wrapping paper from time to time, much to the amusement of my kids. And because of the warm memories from that long-ago California trip, I’d much rather spend money on experiences my family can enjoy, like vacations, than on stuff.

Maybe it’s wishful thinking, but I like to believe that my parents’ mindful approach to spending lives on in my kids, who seem to appreciate the value of a dollar on some days at least. My college-age daughter takes pride in her 5-star rating on a ride-hailing app because it entitles her to discounts and coupons. My son, a high school senior, is already savvy about mutual funds and 401(k)s—thanks to conversations he tunes into at home and an intro to business class he takes at school. Both kids know that they need to budget for indulgences beyond the basics and that they’ll have to pay for them with money earned from their jobs.

Both of my parents are gone now, but their frugal approach to working diligently and saving money allowed them to raise kids. And not only that: They put enough away to build a nest egg that funded some retirement travel to Europe, Russia, and Alaska in their golden years. By then my father came around to reasoning: “You can’t take it with you.”

They still managed to leave something behind. The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully—are with all of us. And those occasional splurges they encouraged us to enjoy are as sweet as those long-ago Shirley Temples under the warm California sun.

— Read on www.fidelity.com/mymoney/frugal-living-ideas-and-life-lessons

Solving the Financial Literacy Problem

Posted on by

“A compelling body of evidence demonstrates a strong association between financial literacy and household well-being. Survey after survey shows that households that demonstrate low levels of financial literacy are those that tend not to plan for retirement, borrow at high interest rates, and acquire fewer assets.” Shawn Cole

Numerous reports show that a majority of American adults lack basic financial knowledge, behaviors, habits or skills to make good decisions about managing their money. Poor money management habits and a lack of financial literacy continue to be significant concerns for Americans and might pose a future a threat to the continued prosperity of America, since we cannot expect government to run huge fiscal deficits to provide essential needs of its citizens.

Additionally, it is one problem that has caused many Americans to be left behind despite ten years of economic expansion and a roaring bull stock market over that same timeframe. The economic good times have benefited high income and high net worth Americans; and it has led to an ever widening income gap, wealth gap and retirement gap within the United States.

Lack of Financial Literacy

“The number one problem in today’s generation and economy is the lack of financial literacy.” Alan Greenspan, Former Chairman, Federal Reserve

Forty-seven percent of college students surveyed said they do not feel prepared to manage their money. Managing money remains the most daunting challenge for college students for the fourth year in a row.

A recent survey, by financial firm AIG and education training company EVERFI of more than 25,000 college students, revealed that students struggle with even basic financial literacy about things like student loans, credit cards and investing.

When asked six personal finance questions, the survey revealed that more than one in 10 college students answered none of questions correctly, and another 20% got just one question right. Still, more than half got just two or fewer questions correct — even incorrectly answering simple questions about net worth and savings.

Furthermore, fewer than 1% of college students taking the test got them all right.

This survey reveals a widespread problem inside America. It reveals that there is a Financial literacy problem in America and one that we must solve.

This is a major issue because of the financial realities facing college students and all Americans. For example, according to Sallie US:SLM data revealed that 83% of college grads have a credit card, though only about six in 10 say they pay the balance on time and in full each month.

Not Taught in High School

“You can come from humble beginnings, live frugally, invest as much as you can, save 10% to 20% of your paycheck, invest in low-cost ETFs, and become a millionaire.’—Dan LaSalle, Olney Charter School’s assistant principal

Why the shortfall in financial literacy? The reason is because not many students in the U.S. learn about personal finance in school, regardless of the income-level where they live. According to the nonprofit Next Gen Personal Finance, only five states require high-school students to take a personal-finance class: Virginia, Alabama, Utah, Missouri and Tennessee.

In other states, personal finance classes are often offered as an elective. (https://www.marketwatch.com/story/how-one-high-school-is-teaching-hundreds-of-students-to-become-millionaires-2019-05-03). As a result, we have a nation where a vast majority do not understand or even the basics of smart money management habits and behaviors.

“The single biggest difference between financial success and financial failure is how well you manage your money. It’s simple: to master money, you must manage money.” T. Harv Eker, author Millionaire Mind

Financial Literacy is one solution

Financial literacy is about knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. These decisions include how to generate, invest, spend, and save money.

This concept is applicable to both individuals and organizations. Individuals must be able to balance a checkbook, comprehend personal income taxes, and understand the concept of budgeting in order to make wise decisions with money. These skills are vitally important; yet, many individuals lack this basic knowledge and consequently are unable to meet their daily expenses.

References:

  1. https://everfi.com/insights/white-papers/2019-money-matters-report/
  2. https://www.marketwatch.com/story/solving-americas-financial-literacy-crisis-starts-with-teachers-not-laws-2019-11-19
  3. https://www.marketwatch.com/story/more-than-half-of-college-students-fail-this-6-question-money-quiz-would-you-2019-06-05
  4. https://www.marketwatch.com/story/how-one-high-school-is-teaching-hundreds-of-students-to-become-millionaires-2019-05-03

The Power of Habit: Why We Do What We Do in Life and Business

Posted on by

Habits are choices that you continue doing repeatedly without actually thinking about them.

The Power of Habit, written by New York Times business reporter Charles Duhigg, explains why habits exist and how they can be changed. According to Duhigg, if people can understand how behaviors became habits, they can restructure those patterns in more constructive ways.

Additionally, understanding and changing habits is one of the most important thing in developing good personal financial behaviors or eliminating bad personal financial behaviors.

Source:

  1. https://charlesduhigg.com/books/the-power-of-habit/
  2. https://www.shortform.com/summary/the-power-of-habit-summary-charles-duhigg
  3. https://fastertomaster.com/the-power-of-habit-by-charles-duhigg/