This program will take about 5 minutes to complete.
NOTE: Financial education content for the program was taken from Cash Course, an interactive financial education program created by The National Endowment for Financial Education ® (NEFE ®) - an independent, nonprofit foundation committed to educating Americans on a broad range of financial topics and empowering them to make positive and sound decisions to reach their financial goals. For more than 30 years, NEFE has been providing funding, logistical support, and personal finance expertise to develop a variety of materials and programs, such as Cash Course.
Current Scenario: High energy costs are affecting the prices of food because energy is used to transport and package food. Food prices will continue to rise during the last half of this year. Overall, prices are expected to rise 3.5%, with milk prices rising as much as 5%.
What can you do in your life to help you deal with rising food costs?
Source: Wisconsin Ag Connection
LESSON FOR YOUR LIFE: Understanding the Importance of Budgeting and Choosing Budget-Friendly Healthy Foods
Creating a Budget
Creating a budget will help you deal with rising food prices. Knowing where you money is going will allow you to see how much money you'll have to spend in certain expense categories.
Creating a budget while in college can help you:
Simple Steps for Creating a Budget:
Improve Your Health While Improving Your Wallet
Even with rising food prices, it's a myth that eating healthy has to be expensive. Many superfoods - foods that are known to confer remarkable health benefits - are very inexpensive. Once such "superfood" is beans.
Here are some more budget-friendly superfoods to add to your meals:
Current Scenario: After the 2008 economic meltdown, finances were very uncertain, making saving money extremely important. To help with this, certain rates have changed which affect everyone?'s paychecks. Social Security taxes have fallen and minimum wage has increased. This means that there is more take-home money in a paycheck ?which is perfect for saving.
Which is the best way to deal with financial uncertainty?
Source: ABC News
LESSON FOR YOUR LIFE: Creating an Emergency Fund & Understanding the Importance of Saving Money
The first priority for your savings should be to set aside money in an emergency fund. This money will allow you to pay for unexpected expenses ? such as a medical bill or a car repair ? without going into debt.
Keys to Building an Emergency Fund:
The Power of Compound Interest
The longer you save money, the more it can grow in value due to compound interest. Compound interest means you earn interest not only on the amount you deposit in a savings account, but also on all the interest you earned previously. Compound interest is one of the most powerful personal finance tools you can put to work for you throughout your life. Want proof?
Check out this example: You can be a millionaire by the time you retire -if you start saving when you are young. Let's compare two 21-year-olds that decide to save for retirement. Luis puts $3,000 per year in an IRA and earns 8% compound interest yearly. Cheryl waits seven years longer and begins to invest the same way. At age 65, Luis will be a millionaire - with almost twice as much money as Cheryl - even though he invested only $21,000 more.
To start saving it's important to develop savings goals. By knowing precisely what you want to accomplish, you?ll be more motivated to achieve it.
Current Scenario: Gas is predicted to cost $5 per gallon by the end of 2012. This is partially caused by an increase in demand for gas. Now that the economy is starting to recover, people want to drive more, and the supply for gas is not able to keep up.
Which of the following is a good way to deal with rising gas prices?
LESSON FOR YOUR LIFE: Save Money on Car Expenses
Tips for Saving Money on Gas
Ways to Reduce the Cost of Car Insurance
Current Scenario: Taxes have fallen for the first time in ten years. Part of the reason for this is because of credits like the Making Work Pay Credit. The credit is applied to your tax return and comes back to individuals as a refund. It is up to $400 and can be claimed if you are not a dependent.
What should you do to prepare for getting your taxes done?
Source: CNN.com & IRS.gov
LESSON FOR YOUR LIFE: Becoming Tax Savvy
If you earn money, you are required by law to pay taxes on it. Here are some guidelines to help you prepare for getting your taxes done:
Some common tax deductions include:
Current Scenario: Because of the recent recession, people are cutting back on spending in certain areas. This includes dining-out. Instead of eating at an expensive restaurant, people are enjoying more fast-food restaurants. McDonald?s share price, for example, has increased throughout this year because of their inexpensive prices.
People are having to choose how to spend their money wisely - which includes deciding what is a want and what is a need.
Which of the following could NOT happen if you don't identify your wants vs. your needs?
LESSON FOR YOUR LIFE: Be Able to Identify Wants vs. Needs
If you are not able to identify your wants vs. your needs, you run the risk of overspending. For some of us, overspending can be almost unconscious. We're not even aware of the hole we've dug ourselves into until it's too late. But in order to meet our financial goals, we need to live within our means.
Four Common Reasons People Overspend:
If you recognize any of these, see if you can weed that behavior out of your financial life.
Sorry, you are not a financial guru. Brush up on your money management knowledge.
Learn more about financial success by scheduling a money management advising appointment at the UNL Student Money Management Center.
You definitely have some financial knowledge, but you're not a financial guru yet. Spend some time brushing up on your money management knowledge.
Congratulations! You are a financial guru!