Tag Archives: money management

Are Your Money Habits Thrifty or Wasteful? [VIDEO]

Just because you know the foundations of responsible money management doesn’t necessarily mean you adhere to them. H&R Block Dollars & Sense hit the streets to find out what people are spending their money on and what money lessons they’ve learned over the years. Are people ignoring everything they’ve learned about managing money? Watch the video to find out.



Teaching Teens Financial Literacy on National No Housework Day

If you add up all the housework parents do in a given year to maintain a happy, healthy and, most importantly, clean home, it’s safe to assume that on average every single day will involve a chore or two.

But not on April 7. Today is the one day that deviates from the mean because it’s National No Housework Day.

For one day, all the dishes should be left in the sink; all the laundry should stay soiled; all the beds should remain unmade. But this national holiday should be a valuable reminder for teens: housework piles up quickly when nobody tends to it.

So how can you turn this day into a teaching lesson?

Divide and Conquer

The saying “two heads are better than one” is a universally accepted truth, but for reasons unknown many parents dismiss it when it comes to family housework. A Chicago Tribune article reported 82 percent of parents did chores when they were kids, but only 28 percent ask their kids to do the same. By splitting all the cleanup duties in the wake of No Housework Day, your teen should understand that a united front against chores will make for a faster and easier process. Additionally, if you give your teen a specific role that they can continue to own long after No Housework Day, it will give them a clearly defined responsibility and lessen the need for micromanaging.

Pay to Play

The same article reported 13 percent of parents said their kids will only do chores if they’re paid. Even though this is a low number, these teens are working wisely within our capitalist system. Providing an allowance for completion of housework is something that parents should consider, especially if you ask your teen to do larger jobs that can be seasonal or bi-annual (think: cleaning the gutters). Creating a minor work environment will teach teens compensation is only rewarded with a job well done — a vital real world lesson.

Time is money management

Giving teens household duties they are expected to complete on time will provide a tangible time management system they can take to the next stage of their lives. If they want to see a movie, for example, they won’t be able to afford it without timely completion of their tasks. Three-quarters of the parent respondents agreed that chores make children “more responsible,” so the only thing holding back their development is a well-structured plan.

If you lead the way, parents, you’ll find a well-balanced distribution of household work will create more free time for you — perhaps even a semi-annual celebration of No Housework Day!


Helping Teens Grow Into Successful Adults With Personal Finance Knowledge

Dr. Martin Luther King, Jr. once said, “Education must enable a man to become more efficient, to achieve with increasing facility the legitimate goals of his life.” The function of education, he argued, is vital for the betterment of students’ lives and society as a whole.

As we continue to focus on the need for personal finance education, specifically as April marks Financial Literacy Month, it’s important to recognize its role in forming a well-rounded student. Because teens who lack a basic understanding of personal finance will grow into adults who are not equipped with the tools to lead financially stable lives.

The Proof

A 2012 study of nearly 30,000 teenagers from 18 countries found more than 1 in 6 students in the United States failed to reach the baseline level of proficiency in financial literacy, according to the Paris-based Organisation for Economic Co-operation and Development. That places American students in the middle of the pack worldwide.

Moreover, a 2016 survey from the Council for Economic Education reports only seven U.S. states require high school testing of personal finance concepts, with stagnation in mandates for personal finance education. Additionally, the number of states that require completion of economics courses is on the decline over the past two years.

The Results

In a 2015 national survey we found 42 percent of teenagers said they are not “financially fit,” and 2 in 5 teens would give up their smartphones if it meant graduating college debt free. A similar study in 2014 revealed 83 percent of teenagers do not keep a budget.

The juxtaposition of these statistics is stark. Teenagers show concern for the future of their financial health but aren’t taking the proper basic measures to set themselves up for success. With the continually rising costs of college education and a shortage of financial skills, young adults are greeted with shock upon leaving the confines of college campuses.

Seventy percent of college graduates, according to debt.org, leave school with student loan debt that in 2014 averaged $33,000. In total, U.S. student debt is around $1.2 trillion, with $3,000 of debt accrued each second.

The Solution

It all starts with the basics: personal finance education. Whether at school or at home, students should have the opportunity to learn practical life skills, like balancing a checkbook, the importance of saving early and saving often, and how investments can benefit from growth over time.

“To be successful, most kids don’t need to learn about collateralized debt instruments, but they do need to know how to open a bank account, how much they need to save each month to reach their goals and, if they borrow this amount of money, how much money they will need to earn to pay it back,” said Nan Morrison, president and CEO of the Council for Economic Education. ”

The Council for Economic Education found students who learn these basic financial literacy skills are more likely to engage in financially responsible behavior such as saving, budgeting and investing, and have better average credit scores and lower debt delinquency.

These are the skills the younger generation must possess because before we know it, they will be the ones who have the money and run the country. Don’t we want them to run it properly?


Who’s a Bitcoin and Where Can I Facebook Him?

Have you ever heard your teens talking about Bitcoin and thought, “Oh, great—not another video game”?

If so, then you’ve been greatly misinformed. Yes, Bitcoin is a product of the Internet age and is used solely within the digital sphere, but it is not a video game. It’s also not a social media platform, mobile app or new dance craze.

Bitcoin is a form of digital currency—a.k.a. cryptocurrency—created and held electronically that operates independently of a central bank and its regulations. Being that it’s a decentralized currency free from the control of one institution or government, its value is derived from the relationship between its supply and demand.

This is all very confusing and quite abstract, we understand. But the simple truth is that teens can buy and use Bitcoin on the Internet to purchase just about anything. There are no age restrictions in place to purchase Bitcoins, and for a younger generation that operates almost exclusively on the Internet, it’s more than likely they’ll come across an opportunity to get involved with it.

So what should you, the parent, know about Bitcoin? We’ve distilled the info and packaged it into bite-sized pros and cons.


  1. Allows teens to make purchases online

In most jurisdictions, an individual must be 18 years of age to make a purchase on online. That means your teen will either get a hold of your credit card with no restrictions (yikes!) or you’ll have to monitor each and every purchase (also yikes!). With Bitcoin, a teen can spend a specific amount and receive a corresponding amount of bitcoins in return, regardless of age. There’s no immediate risk of overspending.

  1. Teaches teens practical personal financial skills

Budgeting is engrained in this system. Teens have to decide what is worthy of their bitcoins. Additionally, all bitcoins are encrypted with the history of each and every purchase, meaning frivolous purchases will never be forgotten and hopefully can teach meaningful lessons. This system of spending also provides more independence, which might work well with some teens that resent being constantly monitored by parents.

  1. Encourages entrepreneurships

Teens can actually earn bitcoins using their skills—just like a job. The Internet isn’t as ageist as the real world, so if a 13 year old can do computer programming as good or better than a 35 year old, then they can be hired and paid in Bitcoin. Freelance writers, gamers and programmers are regularly being paid in Bitcoin for their services. The value of ability and competence is valued more highly in this space than experience/wisdom/degrees.


  1. The dollar value of bitcoins is volatile

Fluctuation is the name of the game here. Within a two-year span, the price of Bitcoin went from under $100 to over $1,000. The current price of Bitcoin on the market as of this writing it $375. What this means in normal person terms: a bitcoin that bought you a DVD on Amazon yesterday won’t necessarily be able to buy you a piece of gum tomorrow. Additionally, there is only a finite amount available. This gets complex as well, but the basic fact is there will only ever be 21 million bitcoins in existence, with close to 15 million of them still unreleased to the general public.

  1. Only 2 percent of merchants currently accept Bitcoin

That 2 percent equates to 160,000 digital merchants, so there are places to use Bitcoin. It’s frustrating, but don’t expect to be able to use it everywhere. Additionally, if more merchants don’t begin adopting Bitcoin payment, the overall value could potentially take a hit.

  1. Can be used for not-so-reputable dealings

While some see and use Bitcoin as a way to fund some shady dealings, the big picture view is that they’re better used as an investment tool. Some analysts have made optimistic predictions that by 2025 one Bitcoin will be worth $17,473. That would provide a handsome return to current Bitcoin owners.

However, your teen can still use Bitcoin for smaller payment transactions. It’s a fun foray into money management that could give them insight into an emerging form of currency that could very well become commonplace in our society.


5 Tips for “Spring Cleaning” Your Finances

When you hear the word “spring,” uttered for the first time after months of dreary winter, what kinds of images are conjured up in your head?

Warmth. Sun. Birds. Flowers. Cleaning?

It may not be the most alluring aspect of the new season, but according to the American Cleaning Institute, 72 percent of people will likely engage in some sort of spring-cleaning this year. So if cleaning is top of mind when you think of spring, you’re not alone.

But don’t limit spring-cleaning to only your home. This is also the perfect chance to give your finances a nice tidying up. Here are five financial spring-cleaning tips that will give your finances a fresh new shine for the rest of the year:

  1. Form a realistic plan for getting out of debt

Without a strategy, you could suffer from the fiscal strain of debt for years. Apply a simple plan for your debt, and you’ll be able to mark a date on your calendar when you’re free from the shackles. Start by spending less than the amount you earn each month, and then decide on an amount you’ll put toward debt each month and stick to it.

  1. Do your math before taking out a loan

Whether you’re planning for your teen’s education or considering furthering your own, loans are often part of the equation. Make sure you understand the commitment before accepting a loan or you’ll be in for a rude awakening. A $100,000 loan at 6.8% interest will demand monthly payments of $1,100 for the next 10 years.

  1. Save for retirement

And do it now! The sooner you start putting in money for your golden years, the shinier those years will be. Once you’re retired, you won’t have a source of income to support yourself. Seems obvious, but then again so does saving now for retirement, yet plenty of people neglect to do so.

  1. Make a budget

Putting your plan on paper in the form of a budget will help make the first three tips easier. If you don’t know where to start on a budget, follow the 50/20/30 rule: 50 percent to essential expenses, which includes housing, transportation, utilities and groceries; 20% to financial priorities, which are retirement, savings and debt (in that order); 30% to lifestyle items, which are gifts, travel, dining out, shopping and everything else.

  1. Check (and understand) your credit report and credit score

A good indicator of how tidy you’re keeping your finances is your credit report and credit score. They will determine if you’re eligible for big savings when you make major purchases like a car or house (anywhere from thousands to hundreds of thousands in some cases). Additionally, make sure there aren’t any mistakes on these documents as that can have serious effects on your credit and your ability to borrow money.


How The H&R Block Budget Challenge Is Helping Teachers Teach Financial Literacy—Straight From Teachers

Educators all over the country are using the H&R Block Budget Challenge to teach students important personal finance concepts. From how to manage a budget and properly saving for a 401k, students are learning how to be smart money managers through this simulation without the real life consequences. Don’t believe us? Hear it straight from teachers who have participated.*

“Budget Challenge is an excellent “formative” assessment tool that accurately assesses the students ability to manage their finances over a longer period of time.   It gets to the heart of their personal habits and personality traits when it comes to managing an account. I also use their scores as a jumping point in discussing credit scores and credit worthiness.” 

“It was well designed and allowed me to expose my student to Personal Finance concepts in a realistic, interactive and fun manner.”

“I learned the issues that seemed to give students the most problems. This allowed me to go more in depth on those topics in order to enhance student knowledge.”

“Both of our school principals have spent time in my classroom during the simulation. They enjoyed seeing the students’ work and how they progress. They also enjoyed how competitive they were with who was in first place in our room.” 

“School administrators have pushed for a required PF (personal finance) class at our school. They were excited about the BC (Budget Challenge) simulation when I brought it to their attention.” 

Get your class involved in the H&R Block Budget Challenge. Find out more info about how to enroll here.

*All responses were anonymously gathered from the H&R Block Budget Challenge Fall 2015 Survey


The Dollar Doesn’t Fall Far from the Money Tree: Making Sure Your Teen Doesn’t Pick up Your Bad Financial Habits

Think back to when you were a bright-eyed teen. Do you remember where you acquired the personal finance skills that would serve as your foundation for saving, spending and investing as an adult?

If you were lucky, you learned what you know from your parents. Otherwise, you probably picked up tidbits here and there through trial and error.

Even with a whole new generation of soon-to-be-adults out there with an appetite for money management, studies show the majority of them are still learning from their parents due to a lack of in-school financial literacy education. That leaves you in the role of parent/teacher.

All of those decisions you made with your money are now useful teaching tools in steadying your teen on the right track from the get-go. If you never quite learned proper financial literacy yourself, now’s your chance to clean the slate and start anew alongside your teen.

These three tips will help you and your teen build a strong financial literacy base:

  1. Don’t forget to save

Any responsible adult will agree that saving money is important. This key component to effective financial literacy spans the gamut: saving for personal items like clothes or entertainment; keeping enough funds in the bank for essential items like a car or rent; stashing away enough for retirement and beyond. If you’re not saving, you’ll eventually run into trouble. Yet, according to a Federal Reserve Board study, 47 percent of Americans would not be able to cover an emergency expense of $400 without borrowing money or selling something for money. Don’t let your teen be one of the 47 percent. Urge them to save early and often to avoid harrowing times when an emergency arises.

  1. Don’t forgo other essentials

When money is tight, some people will deprioritize certain aspects of their lives in order to pay the most pressing bill. The same Federal Reserve Board study reported that 31% of their respondents went without some form of healthcare in 2014 because they couldn’t afford it. Not only does this fact highlight the importance of savings, it also stresses the need to sacrifice non-essential items if needed. Your teen should be made aware that medical treatment is ultimately more important than the newest iPhone.

  1. Communication is key

You may think you’ve been doing a good job as parent/teacher, but what does your teen say? A Time article claims that while 73 percent of parents say they regularly talk to their kids about saving and spending, only 61 percent of kids agree with that sentiment. So before giving yourself teacher-of-the-year award, make sure your teen understands what you’re saying and can apply the learnings in practical setting. One easy way to accomplish this is by not forking over cash for your teen’s luxury items, for instance if your teen wants to go to a concert, make sure they can earn cash either through a part-time job or even household chores.


To Venmo, or Not to Venmo: Breaking Down Money Transfer App Technology

As technology continues to make our lives simpler and more organized, it also keeps us better connected to the people around us. This privilege seems more the norm for teens that never experienced life any other way.

The ubiquitous smart phone and its many functions can seem like an unregulated — and perhaps even dangerous — gateway to the vast and abstract entity we call the Internet to a generation that vividly remembers a world where dial up modems dictated the online experience.

The line in the sand seems to be drawn particularly heavy on the topic of money transfer app technology. While Gen Z’ers and the majority of Millennials are very comfortable paying and receiving money via apps that are connected to bank accounts and/or credit cards like Venmo or Square Cash, older generations don’t trust the process, citing potential security hazards.

Are Money Transfer Apps Safe for Teens?

The short answer is yes. But like anything, both online and in the real world, nothing is 100% secure. You could have your account hacked just as easily as you could have your wallet stolen. At least a money transfer app has some safeguards in place to prevent this type of online mugging. The trick is making sure you enable all the security features. Doing that plus watching your transactions closely and keeping the number of connected devices to your account low can mitigate the potential risk.

Which app is the best for my teen?

Depends on the teen. PayPal is a well-established platform that operates with 25 different currencies and utilizes a two-factor authentication system, helping to make it one of the safest. It is essentially an online bank more than a service to strictly route money. Venmo is run by PayPal but is a faster, simpler, more social version. It includes a feed of activity among Venmo users complete with emojis. Teens prefer this platform because of its fun Facebook-like usability. Then there’s Square Cash, which functions in much the same way as Venmo but allows users to receive payments from non-Square Cash users by creating a unique and anonymous $Cashtag.

What about Facebook?

Facebook also provides a money transfer option through its Messenger app, and since many people are already logged on to Facebook over the course of a day, it stands to reason that their version will begin to gain popularity. Facebook is very stringent with its security measures, so there’s not much to worry about in terms of security.

Make sure to weigh out the pro’s and con’s with your teen before they decide to use one of these money transfer services. These services should be used with just as much caution as they would use to protect a wad of money in their back pocket.