From the Editor’s Desk

Gary Foreman

Have We Really Gotten Dumber about Money Matters?

Hello to all my Frugal Friends!

Recently I read an interesting article on the USA Today site. It was based on a survey by the FINRA Investor Education Foundation. The purpose of the survey was to estimate how knowledgeable people were about financial issues. The article summarized the results this way.

“As Americans’ finances recovered from the Great Recession – spurred by the longest bull market, 50-year unemployment lows and an almost record-breaking expansion – they got dumber about money matters.

“Just 34% could answer at least four out of five financial-literacy questions correctly last year, down from 42% in 2009, according to the 2018 Financial Capability Study from FINRA Investor Education Foundation. The figure was down from the 2012 and 2015 studies as well.”

As someone who has spent the last 24 years providing financial education, I found that troubling. Not that TDS is big enough to affect the results, but rather than the need for financial education keeps getting bigger. (It’s good to be needed, but still…)

The article pointed out areas where education was needed. “The money topics with the biggest drops in comprehension were inflation, risk and interest rates. But the share of right answers to all five questions fell since 2009.”

Naturally we’d like to see everyone score well in those areas. So if you’d like to improve your knowledge, here are some articles to provide you with useful information:

If you want to read the article and take the quiz you’ll find it here.

Oh, one final thought. A quote from Woody Allen. “Money is better than poverty, if only for financial reasons.”

Keep on Stretching those Dollars!

Is There a Different Perspective? That Can Help You Save?

Hello to all my Frugal Friends!

Recently my wife and I returned from a trip outside the U.S. It was the first time I had needed a passport in over 20 years. And while I won’t bore you with trip stories, I do want to share one observation.

As you might have guessed, I have an American perspective on things. I believe that I’ve been blessed to live my life here. Whenever and wherever possible I want to share that blessing.

The trip reminded me that there are other perspectives. I’m not going to get into the politics of that. Rather I want to apply it to our financial lives.

We all make financial decisions from our own unique perspective. If my 10-year-old car needs a repair that will affect what I think about buying a new(er) car, I’d have a different perspective about buying a car than I might have had a few weeks ago when my current car was running fine.

Sometimes that change in perspective accurately reflects reality. For instance, that 2500 square foot home that was the perfect size when you had 2 teenagers living with you seems too big now that you’re empty nesters. The perspective is different, but so too is the reality.

Why do I bring all this up? Because sometimes our perspective dominates our thinking. And that can lead us to making a bad decision.

Take our auto example. Sure your car is 10 years old. And you’re tired of it. Plus it needs $800 worth of repairs. But if you focus on that alone, you might end up signing a 4 or 5 year car loan costing you $300 a month. In a few months you might consider that a mistake.

If you stepped away and considered a different perspective, you might have made a different (better?) decision.

Best of all, that different perspective doesn’t cost you a thing. But it could save you very big bucks! So whenever possible, step back from a big decision and see if there’s another perspective that could be useful.

Finally, something to brighten up your week. This was seen on a t-shirt: “My reality check bounced!” I hope that your reality check clears the bank (or at least has overdraft protection)!

Keep on Stretching those Dollars!

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