Why The Money Talk is Important

Despite financial education being one of the most important lessons to shape our adult lives, it is not something many people learn until much later in life. As a parent, you have many “talks” with your children, but too often the “Money Talk” isn’t one that happens until it is too late.  

Respondents in the Ohio Credit Union League’s 2018 consumer survey indicated they considered lessons from parents extremely important to a child’s financial literacy. However, research suggests that’s not happening.

In that same survey, 61 percent of respondents said they received most of their financial education through experience and life lessons. Only 23 percent felt they had received financial education from home and – surprisingly – only 3 percent of Ohioans received financial education in the classroom.

As a result, Ohio’s teens may not be graduating high school with financial know-how.

Each year, The National Financial Educators Council administers a 30-question financial literacy test to participants ages 10 and up in all 50 states. Teens in Ohio, ages 15 to 18, averaged 60.32 percent on the test. Nationally, students of the same age scored an average of 61.11 percent

Parents want their children to have a good handle on finances before they leave the house in their late teens or early 20s, but most aren’t sharing the necessary wisdom to make that happen.

In the 8th annual Parents, Kids and Money survey, conducted by T. Rowe Price, 69 percent of parents have some reluctance discussing financial matters with kids. And, 35 percent of parents rated talking to their children about family finances as either very or extremely uncomfortable – ranking it alongside talks about death and drugs. Partly, parents may feel too self-conscious about their financial situation to be comfortable sharing advice with their children. This survey also found parents who have declared bankruptcy are 24 percent more reluctant to discuss money with their kids. And, parents carrying more than $5,000 in credit card debt are 14 percent more likely to feel uneasy having those financial conversations. 

“Financial literacy” is an easy term to define, but a more difficult one to put into practice. Here are some tips to help you equip your children with a bright financial future:

  • Set an example. Children who consistently see their parents pay the bills on time and keep a budget are more likely to adopt those practices in their own lives. Parents who have made financial mistakes should also share the experience with their children. That knowledge can prepare kids to avoid the same mistakes with their money in the future.

  • Make savings a tangible concept. Encourage younger kids to collect spare change in a clear jar or container so they can see their savings grow. Each time the kids want a small treat, parents can offer to put the money they would have used to buy the treat into the “savings jar,” instead. Once the jar is full, children can count the money and use the funds to purchase an extra-special treat. That way, they’ll associate a sense of excitement with savings. They’ll learn that delaying gratification can lead to a greater payoff down the road. Also, be sure to stop by DoverPhila Federal Credit Union during Youth Week from April 16th through April 21st to earn extra saving bonuses on deposits made to their youth accounts.

  • Have kids learn with their own money. Kids will learn the value of a dollar better if it’s their own. Younger children who are paid a small allowance for chores they complete around the house will learn the concept of working for money. Kids can then begin to spend their own money on some of the things they want. They’ll begin to appreciate what these items actually cost and will be more open to lessons about price comparison.

  • Get kids familiar with banking. Parents can make a trip to their financial institution an exciting event for younger kids. Let them in on the process – maybe even let them press the buttons on the ATM or help to fill out a deposit slip. They’ll feel included in adult chores and won’t feel intimidated by banking later in life.

  • Get help. DoverPhila offers Banzai, an award-winning, web based financial literacy game, for free to its community. The credit union also offers other programs and events geared towards fostering financial literacy in kids, teens, and adults; as well as a financial counselor.

 For more information about financial literacy call the credit union at 330-364-8874.

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.

Everything You Want to Know about Bitcoin (…But Were Afraid to Google)

What is Bitcoin?
Bitcoin is a form of money that is entirely digital. The U.S. has dollars, Europe has Euros and the internet has bitcoins. The fact that bitcoin is digital isn’t all that interesting – because, in reality, an estimated 92% of all money is digital. Bitcoin is fascinating because it’s decentralized. That means no single nation, bank or institution controls it. Instead, the bitcoin currency is administered and propagated by bitcoin users.

How Does Bitcoin Work?
Bitcoin works much like a regular currency. You can buy and sell digitally and you can use bitcoin to make “real life” purchases if the vendor accepts bitcoins. You can invest with bitcoin, exchange your bitcoins for other forms of currency, and transfer bitcoins. You can also create new bitcoins through a process called mining. This is where bitcoin’s decentralized system becomes super-interesting. Rather than a large financial institution printing money, anyone can mine new bitcoins.

“Miners” solve complex mathematical problems, which validate other bitcoin transactions within the bitcoin network. This system of peer-validation is the bedrock of the revolutionary blockchain technology that makes Bitcoin so secure and allows for peer-to-peer value transferring. For every “block” of transactions successfully validated, the miner is rewarded new bitcoins.

Is Bitcoin Legal?
Yes. Bitcoin has an infamous reputation due to its ability to be traded securely and anonymously without the regulation of a centralized institution. It has been associated with money-laundering and illegal purchases on the web’s black market – but it’s still legal.

Of course, as with all currencies, bitcoin is illegal when you use it to purchase illegal products.

How can I Earn Bitcoins?
There are several ways to get into the bitcoin market. The first of these is mining. As mentioned above, mining is the process of solving mathematical problems that are available to anyone in the bitcoin network. Miners provide transaction validation for the network and are rewarded with bitcoins.

In 2009, you could earn 50 BTC per “block” mined. Today, it’s considerably less, at just 12.5 BTC. Also, these mathematical problems are a lot harder than what you’ve encountered in high school calculus. Lastly, you’ll need to invest in specialized computers to tackle these problems.

You can also get bitcoins by working for them. You’ll find lots of job postings that pay in bitcoins on the internet.

There are also high-risk ways to get bitcoins, such as gambling and currency trading.

Do I Have to Pay Taxes on Bitcoin Earnings?
The IRS views your bitcoins as property rather than currency; so every transaction you make within the bitcoin network will impact your capital. In addition, if you are paid in any crypto-currency, this income will be taxed.

In many ways, bitcoins are subject to the same tax laws as regular currencies, including regulations, rules regarding reporting, and sales tax.

If you use bitcoins frequently, check with your accountant. Keep accurate records of your transactions so you can report your bitcoin income. It must be recorded in U.S. dollars at the exchange rate it was valued for at the time of the transaction.

Credit Union Collects Over $30,000 for United Way

DoverPhila Federal Credit Union collected over $30,000 for United Way through its annual in-house campaign involving corporate, employees, and credit union members.

The United Way campaign started on Monday, October 23rd and concluded on Saturday, November 11th. Credit union members who participated in the campaign received a pledge card that hung in the lobbies of each DoverPhila location. With members’ lobby pledge cards, credit union employees’ donations, and a corporate gift from DoverPhila Federal Credit Union, the annual campaign raised a total of $30,110.71 for United Way.

United Way is a local nonprofit organization with one goal in mind – improving the community. By partnering with area organizations, United Way can make this goal a reality. The monetary donations go towards providing a better future for area youth, creating a healthier community, and helping people in crisis.

For more information or to donate to United Way, call 330-343-7772 or visit www.tuscunitedway.org.