I had a great conversation with Beth Kobliner recently. Beth has an incredible personal finance focused CV. She’s been a columnist at Money Magazine, authored one (and soon to be two) New York Times Bestsellers (Get a Financial Life: Personal Finance in Your Twenties and Thirties), served on the President’s Advisory Council on Financial Capability, and gave financial advice to Elmo on Sesame Street (and a whole lot more too)! In this NGPF podcast, Beth shares the money lessons she learned growing up in Queens, New York as well as the motivation for her latest book, Make Your Kid a Money Genius, to be released in February. You will benefit from Beth’s insights on how to invest, use credit cards wisely and a simple test to control those impulsive purchases. Parents will find Beth’s new book a godsend in describing developmentally appropriate actions to build that financial decision-making muscle that your children need to thrive in this financially complex world. Enjoy!
A great opener to your Types of Credit unit. Start by asking your students to rank from largest to smallest the various types of consumer debt:
- Credit Cards
- Auto Loans
- Student Loans
Answer and visual below (from Visual Capitalist and Equifax): $12.4 trillion (as of August 2016)
I had one of those annoying situations occur over the break. I got an email (which I missed) from my credit card company notifying me that my automatic payment from my checking account had been returned by my bank. Something about a bad account number which was the SAME account number that I have used to pay the balance on my card (successfully) dozens of times. You know the drill from here with credit card companies, if your payment is not made on time, the late payment kicks in and interest charges and a higher penalty APR comes along for the ride. As a customer who had NEVER made a late payment on this card, I was confident that a phone call would reverse all this nastiness and it DID (I blogged about how to negotiate your everyday expenses last year and that advice came through). Phew!
So, when I went to reset my automatic payment on my credit card back to the same account number that I have used countless times, I was dismayed to see this:
From Financial Times (sub. required):
Answer: A LOT! Almost $23 BILLION in 2016 based on estimates from Instinet
These reward programs provide cash back or points (that can be exchanged for goods or services) to cardholders based on their spending habits. The FT article answers a few questions that students might have:
It’s a special occasion here on the NGPF blog — a guest piece by NGPF Fellow Amy McCabe! We know that hearing from us is one thing, but hearing from a fellow teacher, who’s in the classroom day in and day out, is a whole different ballgame! Amy’s an economics and personal finance educator at Culpepper County High School in VA, and sends along this review…
Answer (hat tip to Sarah Tavel of Greylock again): Only 37%.
Check out this NGPF Activity in which students are given consumer profiles and asked to determine whether or not they should get a credit card. Also, this NGPF Case Study: Tale of Two Credit Scores provides students with information on alternative ways to establish a credit history.
Here’s a meaty set of charts to include in your Types of Credit unit. I love it because it provides a more holistic view of the various types of debt that consumers have and how their balances vary over an adult’s life:
Hat tip to Sarah Tavel of Greylock Partners who included this chart in her excellent presentation “Saving people money.”
First, some orientation is in order.