January 6th, 2010 by Steve Gillis
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I’ve been away from this post for a little while – life got in the way. My Dad died in late November and quite frankly I just wasn’t in the mood to write. Since my Dad passed away I have been reflecting on his life. He was a good man who would help anyone in need, but he struggled financially. He left my Mom a wee bit of money, but not enough to live off of comfortably. The lesson to be learned is that one has to understand how money can impact one’s life.
I’ve decided that I’m going to help you help your child understand the importance of being financially literate. With that in mind, I will be tackling the following topics during 2010:
- What is Financial Literacy?
- The Difference Between Needs and Wants
- Goal Setting
- Earning Money
- The Banking System
- Saving Money
- Investing
- Any topics that you, the reader, want me to tackle…
Please bookmark this blog and check in on a regular basis so that we can both help your child understand how to manage money effectively.
My two cents worth…
The Money Professor
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November 26th, 2009 by Steve Gillis
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I really hate it when people complain about not having money. They get paid, they spend it, and then they bitch and moan that they can’t buy what they want. Face it, the only way that someone is going to have money left over is to budget accordingly. I’m not talking about creating a budget that takes into account the last penny. All I’m saying is have an idea of how much you make and what the cost of your basic needs are and spend what you have, not what you wish you had.
The biggest problem in our society today is that a lot of people live beyond their means. This was brought to our attention with the mortgage crisis in the USA. Shame on the banks and their agents who convinced their customers that they could get for loans that they didn’t qualify for…and shame on the customers for accepting such loans – if they knew that they couldn’t pay it back what the hell are they doing accepting it? Wishful thinking that’s all it was…probably hoping that the money would eventually come in.
Hopefully we have all learned a lesson; a lesson that should be passed on to our children – live within your means and don’t get suckered by monetary promises that seem to be to good to be true. As Judge Judy says: “If it’s too good to be true it probably is.”
My two cents…
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November 12th, 2009 by Steve Gillis
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Well it looks like my last post got a few financial planners upset. What is sad is that they did not have the guts to post a comment on the blog. Rather they decided to lambaste me through another social media forum. I guess that I must have hit a nerve.
Please understand that I am not saying that financial planners are bad – some of my friends are financial planners. All that I’m saying is that some financial planners are more concerned about their bottom line. Obviously the more they sell the more they earn. When I was involved in the financial services industry I was paid $2200 for placing a $100,000 investment with one of our product providers. You do the math – a couple of deals like that a week ($100,000 investment loans were available to those that qualified) I would have a nice chunk of change in my jeans.
Planners will tell you that their job is to educate their clients. The question that you should ask is: what exactly are they teaching you? If you don’t understand what they are talking about hold on to your wallet and run like the wind! The worse investment is one that you do not understand.
My two cents worth…
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November 11th, 2009 by Steve Gillis
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I am beginning to believe that one of the major reasons that the world is in the financial mess that it’s in is the very fact that most people have no clue how to manage their money. I’ve probably insulted a few of you by saying this, but quite frankly being ignorant about money has led us to the biggest financial disaster since the Great Depression.
Who is to blame? The financial industry has done a great job of feeding us doublespeak that most of us didn’t understand. We have been brought up to believe that financial institutions, and financial planners had our best interests at heart. Unfortunately, we failed to understand that the gooblygook that was being spouted by them was meant to make us believe that they knew what they were talking about. Boy did we ever get snookered!
Let me make something very clear – financial institutions are in the business to make money. A financial institution is nothing more than a store that offers financial products. The employee’s job is to sell you a product that may or may not fit your needs. Too many people are intimidated by this process and fail to understand what they are buying. This has been going on for ages. Most of us were never taught money management in school and most of our children will not be taught it either. It doesn’t surprise me that schools don’t teach students to be financially literate – most teachers that I have met are financially illiterate, so having them teach our kids would be like the blind leading the blind. I don’t trust most bankers or financial planners to teach our kids, because they see whoever is in front of them as a potential client – they just see dollar signs when they have a warm body in front of them (hmmmm….seems to be that this is one of the factors that led to the mortgage crisis in the USA; some brokers would arrange deals for clients as long as they could fog a mirror).
So who do you turn to? Parents you have to do your research. Find an organization that teaches basic money skills without pushing financial products.
My two cents worth…
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November 3rd, 2009 by Steve Gillis
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I’ve been thinking about why the world is in the financial mess that it is in. The short answer is people don’t understand how money works. If you understand the ins and outs of money management you have more control over your destiny. Your life is is a product of what you know and how you apply this knowledge to your particular situation.
My two cents worth…
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October 31st, 2009 by Steve Gillis
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I wear several hats: I am the president of Net Learning Solutions Inc, I am a husband, a dad, a son, a brother, and a junior high school teacher. At the school that I work at we have had a large number of students absent with flu-like symptoms. The absentee rate was close to 25% – this has an impact on teaching. It impacts those that teach only to the curriculum; those teachers will be in panic mode for the entire year, because they won’t be able to cover all of the required course material. Those of us who prefer to teach the child will have an easier time of it – yes the curriculum has to be covered, but I prefer to teach my students how to think; rather than memorize and regurgitate back what they have “learned”.
What does this have to do with financial literacy? Financial literacy is not about memorizing key concepts and doing math problems. Financial literacy is about using your brain and understanding how one’s actions has an impact on one’s personal situation. Financial literacy is about understanding how money works and encouraging behaviors that will keep money in your jeans. Simply put, financial literacy is learned by doing and reflecting on the consequences. So parents, financial literacy is not rocket science – it’s all about talking to your kids and imparting values that will help them to use money wisely.
My two cents worth,
The Money Professor
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October 20th, 2009 by Steve Gillis
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One of my daughters came to me in tears the other day – she had no idea how her cell phone bill had climbed to $300 for the month. She ranted and raved how stupid the phone company was until she talked to them. It seems that she misunderstood a key concept in the phone contract – downloads are not free! I sat her down and explained the contract to her in words that she could understand. My kid is an A student, but she is not always money smart. Is your family in the same boat – book smart kids, yet financially illiterate?
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October 15th, 2009 by Steve Gillis
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How is it that some people survive a recession better than others? The simple truth is that they know something that the others don’t – knowledge is the key to surviving an economic downturn!
Where do you turn to become financially literate? Our school system has failed us in this area of literacy; most teachers do not understand that money management is more than learning how to balance a checkbook. Those in the financial services sector – bankers, financial planners, etc. – have a vested interest in providing information, because they are expecting to get a sale out of the members of their audience.
I pity those who lack financial knowledge, because their standard of living will suffer. I’m sure that no parent wishes that their child should ever suffer the consequences of not understanding how to make one’s life better through sound money management. The problem for most parents is they themselves really don’t understand how to teach their children about money.
I’m in the process of creating a financial literacy course for teenagers and their parents. It will be up and running in the next few weeks. For more information please drop me a line by clicking here.
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October 4th, 2009 by Steve Gillis
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I’ve recently written an article on Critical Illness insurance on my friend Tony Ratcliffe’s blog – Reflections on Wealth. The article can be found at: http://tonyratcliffe.wordpress.com/2009/10/04/thanking-my-wife-that-i-had-critical-illness-insurance/
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September 29th, 2009 by Steve Gillis
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The best lessons about money that I ever learned where at the kitchen table. When I had a question about money – especially after I had started working part time in high school – I would sit down with my mom and dad and we would talk about what I needed to know . There was no set curriculum or lesson plan – my parents would do their best to help me understand how to apply money concepts to my particular situation. I wasn’t forced to sit through a boring math lesson on interest rates or rates of return; rather I got to learn about the stuff that impacted my life. This is what financial literacy is all about – learning and understanding how money concepts or strategies can be applied to your financial situation.
Parents, my advice to you is quite simple, take advantage of those teachable moments that might come about around the kitchen table. You don’t need to be a math wizard to teach your child money management; you just need to lend an ear and talk openly about responsible money management.
My two cents…
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