Monday, February 17, 2014

My Money Smart Challenge

I have completed the first three modules of FDIC's Money Smart financial literacy curriculum! Honestly, I thought these courses would be informative yet easy. I was highly mistaken. At the beginning of each module I was asked a series of questions to test my knowledge. I never passed a pre-test. Here are some I missed:

Which of the following is an example of a secured loan?
a. Home loans and home equity loans
b. Most credit cards
c. Personal loans
d. Student loans

In which two of the situations below would you need to see the customer service representative at a bank?
a. Refer you to a person who can help you
b. Deposit your money for you
c. Take applications for loans offered at the bank
d. Answer general questions

Which of the following must be included in the Truth in Lending Disclosure? Select all that apply
a. Amount financed
b. APR
c. Finance charge
d. Total payments

Did you think you knew the answers? You better recheck! The first one is a, second is a and d, and the third is a, b, c, and d.

Here are some major benefits from just the first three modules of FDIC's Money Smart curriculum I'd like to share with you. 

1. Choosing the right financial institution for your specific needs will save you much frustration. For example, when I moved out of my parent's home to attend a university I never thought about changing banks. However, without the joint support of my parents as well as my student level income I was charged numerous bank fees. I could have easily avoided those fees by simply doing a little research and choosing the best checking account for me.

2. Its good to know how much your financial institution is insured. Insured institutions are guaranteed by the FDIC (Federal Deposit Insurance Corporation). So, if the institution fails the FDIC would return your money, up to the insured amount. To calculate the insurance coverage of your accounts go to FDIC's Electronic Deposit Insurance Estimator at www.myfdicinsurance.gov/  

3. Financial institutions may share your information with other companies to offer you other products and services. Federal privacy laws give you the right to opt out of some sharing of your personal financial information. To learn how to opt out go to www.optoutprescreen.com 

Financial literacy is the first step out of asset poverty. See my previous blog for more information on what exactly is asset poverty at http://newcenturyida.blogspot.com/2013/11/my-asset-poverty-status.html. Our New Century IDA program uses  FDIC's Money Smart for partnering Crosby Scholars participants. Info on Crosby Scholars programs can be found at http://crosbyscholoras.org/ , to participate contact EISR’s Barbara Johnson at barbara.johnson@eisr.org 

Be on the lookout for the next blog on my Money Smart Challenge progress!


Friday, November 1, 2013

My Asset Poverty Status

I recently had the opportunity to attend a conference entitled Pathways to Prosperity: Integrating Asset-Building throughout Communities. It was here that a term I had never before heard was being thrown around, asset poverty. Being a contradictory set of words I was instantly confused until I learned the meaning. “A family can be defined as asset poor if it has insufficient net worth to support itself at federal poverty level for three months in absence of income, i.e., net worth less than $4,577 for a family of three in 2009” (Assets & Opportunity Profile). As I was assumedly standing in a room of mostly asset stable professionals I realized I might be the only asset poor individual in the room.

My predicament
  • As an AmeriCorps member I serve at poverty level and make only about $1,000 monthly
  • I would consider my educational degree of a B.A. in Art History an asset. With this I may be able to expedite time without employment if I was to lose my current position
  • I have no economic assets such as a vehicle, home, or significant savings
  • However, I currently only have two bills, rent and utilities, about $550 monthly

As you can see, if for any reason I lost my position or received a surprise expense, I would be in hot water very quickly. On the other hand, I learned at the conference ways to combat my asset poverty status. I decided to take the Money Smart Challenge. Money Smart can be found at http://www.fdic.gov/consumers/consumer/moneysmart/adult.html and is a free, highly reputable, financial literacy curriculum. New Century IDA uses Money Smart for Crosby Scholars participants. Info on Crosby Scholars programs can be found at http://crosbyscholars.org/, to participate contact ESR’s Barbara Johnson at barbara.johnson@eisr.org. With the Money Smart curriculum I can learn techniques to become more economically savvy and begin to implement savings. I will also learn about credit building options.  Since I have no credit to date, learning these methods will help. I plan on using this information while choosing my first credit card!

I know that once I establish stable savings and build credit then I can look into making my first asset purchase such as my own home or vehicle.  What do you think? Would you consider yourself asset poor? If not, prove it with http://www.playspent.org/

If you want to look into ways out of asset poverty like me or if you’re interested in helping build asset stable communities I suggest reading Asset & Opportunity Profile: Winston-Salem and Forsyth County found at http://www.forsyth.cc/housing/Documents/WinstonSalemMEOPReport.pdf

Be on the lookout for the next blog on my Money Smart Challenge progress!




Works Cited
"Assets & Opportunity Profile: Winston-Salem and Forsyth County." ASSETS & OPPORTUNITY PROFILE. (2012): n. page. Web. 31 Oct. 2013.

Wednesday, July 10, 2013

Smart Phone on a Tight Budget: Doable


Well, I did it. I went against everything I had said previously, my declaration to society, and a promise made to myself to wait until I paid off my student loan. I got an iPhone.

Allow me to explain.

I have wanted a smart phone for a really long time, and particularly an iPhone. I didn’t care whether it was the 4, the 4S, or the 5. I just wanted to be able to look stuff up on Google whenever I wanted and have a GPS at all times. However, my carrier would require a $30 data charge on top of what I was previously paying ($60), and $90 seemed like way too much for a cell phone bill at this point in my life. Not wanting to switch carriers (I explain why here), I chose to wait until my student debt was paid before I added another expense to my monthly bills. I announced to my friends, family, and the world via blog what my plan was, and I intended to stick to it. That was until my phone started messing up.

Right after my blog, my flip phone, which I have had for almost 2 ½ years, started giving out. I became increasingly frustrated that people on the other end could barely hear me despite how loud I talked. I was trying to make it work, and I honestly intended to until my loan was paid (which, honestly, could have taken a couple of years or ten).

I received a message from my carrier’s marketing department which offered the iPhone 5 for $100 and $60 a month. I was pretty excited about this offer, but like most people, I wondered about all the strings attached. I picked up the phone, got some information, and was surprised to learn that it was a legit offer, but I forgot to ask about added fees. I was frustrated enough with my phone and it was a deal I could not pass up. I made plans to get the phone, and I was so excited!

Sometimes life doesn’t always turn out the way you think it will, and most of the time, it is better.

Here’s what I ended up with:

An iPhone 5 (enter ridiculous amount here)
$42 per month with insurance
Unlimited talk, text, and data (first 500 mb = 4G)
And… T-Mobile instead of Verizon

Why? Well, it was a deal I couldn’t pass up. The phone was a gift, but even if it was an expense out of my pocket, look at what I am saving each year:

If I stuck with my flip phone another year, which realistically wouldn’t last, I’d pay $720.
Over the next year, with insurance (which I didn’t have with Verizon) I’ll pay $504 with T-Mobile.
If I got the Verizon iPhone, I wouldn’t get insurance because it would be an added expense, and I’d be looking at paying around $780 a year with hopes that my phone does not mess up because iPhones are not covered the same way as a regular phone would be under warranty.

I mentioned previously about not wanting to switch carriers because I loved Verizon’s service, and that is honestly still true. But at this point in my life, T-Mobile saves me money and does what it is intended to do which is provide methods of communication. I’m glad I have a reliable way to contact someone because while my old phone might have had great service, it could have given out at any moment.


For those of you out there who are debating on how to save money with your phone service, do your research! Many employers offer discounts for particular cell phone carriers, and some will even pay for all or part of the bill. I am definitely happy to be saving money!