DoverPhila Offering Award-Winning Financial Literacy Program for Free

Area residents are getting a free education in how to manage their money. DoverPhila Federal Credit Union is working with Banzai, a national award-winning financial literacy program, to make the curriculum available to the community and 10 schools in Tuscarawas County, completely free.

"Banzai is a web-based financial literacy program. Kids have their own bank accounts, and they work through assignments that are based on real life," Morgan Vandagriff, co-founder of Banzai, said. "But because DoverPhila is sponsoring it, local schools get it for free. More than ever, it's important that kids develop sound financial skills to prepare them for the real world. DoverPhila realizes that, and they're doing something about it."

Banzai is an interactive, online program supplemented by printed workbooks which aligns with state curriculum requirements for personal finance education. It has become the largest program of its kind, servicing more than 35,000 teachers and available in all 50 states.

“We’ve offered time, money, industry experience, and a variety of credit union resources to help our schools teach personal finance in the classroom,” Shana Simmons, Director of Marketing & Member Services, said. “Students using the program are exposed to real-life scenarios where they learn to pay bills and balance a budget – but it’s not always easy. Students must learn to manage unexpected expenses such as parking tickets, interest charges, and overdraft fees. The educational program also introduces students to auto loans, bank statements, entertainment costs, savings, and more.”

“Too often students get out of school and they just aren't ready for the financial roller coasters life can give us,” Vandagriff said. “Banzai teaches students to navigate those twists and turns and come out on top. We're excited to work with DoverPhila to improve financial literacy in local schools.

Those interested in using the Banzai program can click here for more information.

New Year, New You, New Budget

Just like swearing off chocolate and carbs, sticking to a household budget is a New Year’s resolution easier made than accomplished. In fact, according to the National Foundation for Credit Counseling’s 2017 Consumer Financial Literacy Survey, last year only two in five U.S. adults said they had a budget and kept close track of their spending throughout the year.

Everybody knows it’s important to track personal finances and maintain your financial health. So, why do Americans have such a difficult time sustaining a budget?

It likely doesn’t have much to do with a lack of money. According to the U.S. Bureau of Labor Statistics, the average household in America makes $74,664, well above the $18,871 national poverty line for a family of three. It’s also unlikely that consumers are too busy to keep up with their budgets. Some budgeting apps like Wally and Mint, can track spending and income with minimal attention from the user.

Financial planning and psychology experts believe the real reason people struggle with budgeting is psychological. According to an article in the Journal of Consumer Psychology, humans only have a finite amount of willpower. We can only restrict ourselves so long before we indulge. Just like dieting, people tend to see budgeting as restrictive; therefore, struggle to preserve the motivation to stick with it.

As you ramp-up your drive for 2018, here are some tips to help you exercise good budgeting habits and overcome a craving to spend.

  • Don’t mindlessly spend: If you don’t feel you have enough money, you could be spending money unnecessarily. Search the corners of your budget for empty spending that isn’t serving you. Many financial blogs offer creative tips to help with this. Check out Lauren Greutman’s list of 13 Things You Should Never Pay For.
  • Make time: If you don’t feel you have enough time to track spending, try finding a simple solution – like an app. Phone apps such as Wally and Mint track spending and income for you. They require minimum attention and time.
  • Start small: It takes weeks to form a new habit, and the same thing applies to tracking your income and expenses. In the beginning, keep it simple. If your spending plan is too complicated or restrictive, you will not stick to it.
  • Budget with a friend: If you don’t feel confident, get some help! Apps, financial blogs, and spreadsheets might help if you’re a little stuck in your budgeting process. But if you don’t even know where to start, consider seeking help from a trusted family member or a financial expert. Your local credit union is dedicated to financial literacy and can offer help and advice for your unique budget.

To learn more about how a credit union can help you be financially fit, visit www.aSmarterChoice.org and find a credit union in your area.

Avoid the Payday Lending Trap

Here is the scenario: you are in a financial bind and need some quick cash. You saw payday loan stores all over town and think “maybe I should try that…” 

Do not fall into that trap! Getting a loan with a payday lender could send you down a deep hole that may take years to get out of.

Here is how payday lenders catch and hold consumers:
To receive cash, you write a check to them for the amount plus the finance charge – which the lender will cash the next time you get a paycheck. They will tell you finance charges range from $15 to $50 per $100, but they will not tell you exactly what the interest rate (or APR) is charged. Interest rates can run from 390 to 780%, and if your state does not cap the maximum cost then the rates can be even higher.

Here is the math to figure out what you end up paying by borrowing $400 from a payday lending store with a $50 finance charge and a 14-day term:

  • Divide the finance charge by the amount you are borrowing: $50/$400 = .125
  • Multiply the answer by the number of days in a year: .125 x 365 = 45.625
  • Divide the answer by the number of days in the term:  45.625/ 14 = 3.2589
  • Move the decimal point to the right two places. This is your APR: 325.89%

At the end of your 14-day term, you have to pay them $450. But if you cannot pay it off entirely then you will have to roll the balance over and pay another $50 fee, as well as interest charges. At the end of your second term, your balance is almost $600 and if you cannot pay that off entirely then you roll it over again. See how quickly your $400 loan can cost you thousands of dollars?

So what are some alternatives?

  • Ask your employer for an advance on your next paycheck.
  • Consider asking family members or friends for a short-term loan. 
  • If you were a military service member, then you may be eligible for short-term lending or emergency relief assistance. Contact Military OneSource at 800-342-9647, or visit www.militaryonesource.mil for information.
  • A personal loan through DoverPhila Federal Credit Union. We offer loans with low rates and flexible terms.
  • Open a low-cost, low-interest credit card through DoverPhila and use it only for emergencies.

No one wants to find themselves in a financial emergency, but there are much better options than turning to a payday lender. To find out more about payday lending and learn about safer ways to get quick cash, visit the Consumer Federation of America webpage www.paydayloaninfo.org/consumer-help.

If you want help getting control of your finances then visit DoverPhila Federal Credit Union. We are committed to helping our members gain financial well-being and offer one-on-one financial counseling as well as additional resources to help you take control of your finances. Contact Fred Weingarth at 330-364-8874 for more information.