“ Start with a Budget! Write it down on real paper with a real pen.”
"Save until you can start investing!"
]]>“Have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”- Steve Jobs
Did you know April is the Financial Awareness month? It is also Mathematical & Statistical Awareness month. But mostly we remember April as a tax month.
We know money is an integral part of our life, but not many people feel comfortable let alone are confident when it comes to dealing with numbers. Even Einstein, the mathematics genius didn’t understand Taxes. He once said, "The hardest thing in the world to understand is the income tax." He found it more perplexing than theoretical physics.
People stumble when it comes to managing personal finance. Higher education doesn’t guarantee financial literacy in both men and women. The latter is even more vulnerable. According to the U.S. Department of Education, over 3.8 million American women have third-graders’ skills on financial literacy and there are only 22.5% of the women who were able to answer the basic financial literacy questions (Mitchell & Lusardi, 2014). It is fundamental for women to be financially competent.
Addressing the dire need of financial literacy, we come across three kinds of people in our surroundings; the first ones are those who like to exaggerate problems, the second ones are to complain about it and play a victim role, but the last one is- she who sees the problem, acknowledge it, and take an action to solve it.
Ashley Clark, the founder and CEO of Sense to Cents is that inspiring Hero, who took an action to transform a problem into a possibility. Here is an excerpt of an interview, where Ashley shares an inspiring story behind the birth of Sense 2 Cents, which is celebrating its 3rd birthday on 15th of April.
“I had a member at our bank come in because he was upset that we were taking “dividends” from his account. I had to explain that process and that was frustrating. I figured instead of being mad about it. I should do something about it. I started teaching my kids some of the terms we got questions about frequently and the Internet saw it and asked for more info on it.”
Every time I hear this story, it inspires me thinking how easy it was for her to get frustrated over the client’s ignorance. She could have dismissed the topic, but she took an initiative to educate not only her own kids but also impacting hundreds of families across USA.
When asked what was one thing she wished to have known ten years ago, Ashley answered, “I wished I knew to believe in myself more and to not let outsiders affect my way of thinking.”
Indeed, we all come across this situation in our daily lives, when we are full of doubts, what if’s, and I am not ready yet kind of excuses.
It takes massive effort and conscious decision-making to bring the desired outcome we want to see in our life.
Not only that, we need to put our thoughts into real action, iterated Ashley; who shared two unfailing tips towards desired financial success:
“ Start with a Budget! Write it down on real paper with a real pen.”
"Save until you can start investing!"
When asked about the fun facts about this wonderful difference maker; she beamed with full glow, “I love sneakers, especially colorful ones.”
Yes, keep adding colors of confidence in many families through your meaningful initiatives Ashley! Keep shining! Keep inspiring!
]]>FINANCIAL EDUCATION IS FOR EVERYONE
Are you a mother or a daughter?, a bread-winner or a housewife?, an entrepreneur or an employee? Regardless your role and identity, you can’t escape dealing with money and finances in your everyday life.
Whether it is for grocery shopping, buying daily needs for kids and family, making big purchases like cars, furniture, and home renovations, planning for kids’ education and what not, women are equally and more accountable on all area of managing finance.
On the contrary, women are financially less competent when it comes to financial decision-making. According to the U.S. Department of Education, over 3.8 million American adult women have third-graders’ skills on financial literacy (Mitchell & Lusardi, 2014).
Can you imagine, only 22.5% of the women were able to answer these 3 basic financial literacy questions:
Q.A. Suppose you have $100 in a savings account and the interest rate was two percent per year. After five years, how much do you think you would have in the account if you left the money to grow?
The correct answer is 1. You’d have $102 after the first year. Over the next four years, interest will grow on that $102, meaning you’ll have more than $102.
Q.B. Imagine that the interest rate on your savings account was one percent per year and inflation was two percent per year. After one year, how much would you be able to buy with the money in this account?
The correct answer is 3: less than today. “If inflation is two percent, prices go up two percent,” says Lusardi. “But if you only earned one percent in your saving account, you basically can buy less.”
Q.C. Do you think the following statement is true or false:
Buying a single company stock usually provides a safer return than a stock mutual fund.
The answer is false. “A single company is a lot riskier than a basket of stocks,” says Lusardi. “Don’t put all of your eggs in one basket.”
It is fundamental for women to be financially competent. Since financial literacy and wealth are strongly correlated, it is even more crucial for women who are considering entrepreneurship as a career. Financial literacy is essential to make all-inclusive saving and investment decisions.
Studies show that financially educated women make a financially healthy family.
Remember, A strong woman stands up for herself. A stronger woman stands up for everybody else.
Sense 2 Cents also is an initiative of a financially educated strong woman who has created amazing learning materials for kids and families.
Can you afford to miss an opportunity to educate yourself and empower entire family?
Remember, financial education is for everyone.
]]>Did your parents share about their income and tracked expenses in your presence? Or this was something that you were totally ignorant or indifferent as a child?
Do you know why money is a great servant but a bad master?
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Hello Financial Seekers,
What consisted in your mother’s menu? Whether it consisted take it or leave it option? Consciously prepared affordable home cooked delicacies? Or fine dining at fancy restaurants with exhausted credit cards that crossed the limits?
Did your mom carry costly brand name purse with little or no money inside? Or did your dad drive one of the fancy cars that the payment took away 12 hours of his time every single day from you?
What were some of the memories that you carried growing up in your childhood home? How about money conversation?
Was it a taboo?
Were you shushed when you wanted to know about it’s in and out?
Or there had been frequent money conversation over the dining table?
Did your parents share about their income and tracked expenses in your presence?
Or this was something that you were totally ignorant or indifferent as a child?
How does it hit now?
What is your opinion and understanding of money?
You may question, Why it is important? Or why it even matters?
Well, in order to make most out of it, we need to know about the dynamics of money first. We need to know about its characteristics and value before using it and letting it impact our life.
We need to initiate a conversation about money, not only in home, with your children, but in every different setting of life.
Why?
Francis Bacon answered it well, “money is a great servant but a bad master.”
And a healthy conversation in home and with our children tailors us to be a master and not a servant.
Knowing about money dynamics gives us power and that power becomes a key of your financial freedom.
Why we need financial freedom?
Well, I may not have to answer this question, whether you work for a 8-5 job or for someone else, you know how your time is tied in others’ wills!
Stay tuned; we will continue the money conversation in upcoming blogs through this informative platform!
Follow Sense 2 Cents, or ignorance,
Choice is yours!
]]>Most adults are poor at managing their finances never reaped the benefits of learning the basics about money when they were young, and we manifest it during their adult life. Like good eating habits and good manners, it is best to educate our children about the world of economics and how it affects them throughout their lives while they are young.
Working for Money Earning money is accomplished in two ways, either you trade time for money or you create passive income. Most people trade time for money, which means we get an approved dollar amount for a set number of hours. The problem with trading time for money is that it limits you in the amount of money you can earn, as there are only 24 hours in a day. Passive income is generated by investments, which we will discuss later.
Budgeting Financial gurus agree, “It’s not how much money you make, but how much you spend,” this is budgeting. It is essential to understand the importance of effective and sustainable budgeting. People who are financially well off-budget below their means and the poor budget beyond their means. Budgeting is creating a financial road map and specific plans on how and where you spend money.
The Equivalence of Value and Money There is a direct correlation between the value provided and the money earned. The marketplace will always pay you based on the value you provide. The more value you bring to the market, the more money you will make. To maximize earnings, you must maximize the value you provide.
Debt Debt is the antithesis of wealth. To generate wealth, you must eliminate debt. As long as you owe money, you cannot grow wealth. There is good debt and bad debt. Bad debt is attributed to that which does not generate or assist in income, such as flat-screen televisions and other unnecessary items. Good debt is the debt that helps generate income, such as payments on a car that is used to make money.
Credit Score A credit score is a measurement of the consumer’s history of their ability to pay back loans. Credit scores are used to determine the creditworthiness of consumers and a guide for lenders to award.
Investing Investing is using money to maximize and generate profits or materials and is achieved by placing money in various financial schemes, which includes shares, properties, and other commercial ventures. Investing creates passive income. Active investing gives you the freedom to generate income without trading time for it.
Paying for College Unlike two to three decades ago, college is not so much a choice but part of the educational process on the path to success. Unfortunately, many young adults begin their adult lives with thousands of dollars in debt from poor strategies to pay for college. While student loans can be a viable option, there are options outside of loans that can fund your higher education. Scholarships are an excellent option, as many are available for an array of qualifications and often go unclaimed for a variety of reasons. School-specific scholarships often become available as students may choose a different school leaving those funds unclaimed. There are still low-interest government loans, if used responsibly are always good options for paying for college. Even with low-interest federal loans, only borrow the bare minimum needed to cover the cost as you will have to pay it back, eventually. Pell Grants are another underutilized financial option and do not require students to pay them back. With a wise combination of low-interest federal loans, grants, and scholarships paying for college can become less of a financial burden for your family.
Conclusion Financial literacy is essential to ensure that our children experience fruitful and fulling adult life. A strong business foundation can be the difference between building generational wealth or generational debt, and our financial literacy guide provides a perfect set of tools for young adults.
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