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The best place to learn solid financial behavior is at home. Although a kid’s environment at school and among peers is important in his or her development, the biggest influence on a growing child’s set of values is the behavior of the parents. Parents are role models, so in a perfect world, they are best suited to solve young adults’ lack of preparedness for handing the world from a financial perspective.

Parents, on the other hand, are often ill-equipped for this responsibility, so public school teachers are left to pick up the slack for parents who can’t or won’t be the role models necessary. The lessons aren’t difficult, but financial behavior is so embedded in life at home, poor models there can easily undo any lessons taught in a school environment. Although New Jersey updates its public school curriculum standards a few years ago to require 2.5 credits in financial, economic, business, and entrepreneurial literacy, the typical class is not going to be effective for establishing solid financial behavior.

Eighth gradePrograms that teach financial literacy need to get creative. If there’s ever a chance for the banking industry to get involved with its future customers at an early age, this is it. Capital One sees the benefit in teaching young children how to use its products and is sponsoring the “Finance Park” program, coordinated by the non-profit organization Junior Achievement.

Finance Park is a mobile program for middle school students. After a few preparatory lessons in the classroom, the students visit one of these mobile stations and a Capital One bank branch. Students are assigned a family situation (single, married, with or without children, etc.) and a job, and are faced with simulations requiring financial decisions that have consequences. Due to a lack of preparedness in real life, most people learn how to manage their money “on the job.” But even in real life, the consequences of poor financial decision-making can be somewhat removed from the decisions themselves. The distance between cause (overspending, for example) and effect (not being able to afford a house due to high debt levels, for example) are so separated that learning on the job isn’t always effective as quickly as it would need to be.

Simulations can bring the cause and effect relationship into focus.

Capital One’s presence is significant in this program. The official name of the initiative is the “Capital One Junior Achievement Finance Park” with the necessary trademark symbols. Corporate involvement doesn’t stop with Capital One. There are more co-branded programs which one might expect to see corporations training young consumers to be life-long customers, in New Jersey alone:

Elementary school grades

  • Our Nation® Sponsored by United Technologies
  • JA More than Money™ (After-school Program) Sponsored by HSBC

Middle school grades

  • JA Global Marketplace™ Sponsored by MasterCard Worldwide
  • JA Economics for Success™ Sponsored by the Allstate Foundation
  • JA America Works Sponsored by Pitney Bowes & The Literacy and Education Fund

High school grades

  • JA TITAN (Internet based) Sponsored by Oracle
  • JA Economics™ Sponsored by the MetLife Foundation
  • JA Exploring Economics™ Sponsored by the MetLife Foundation
  • JA Banks in Action™ Sponsored by the Citi Foundation
  • JA Business Ethics™ Sponsored by Deloitte
  • JA Careers with a Purpose™ Sponsored by HCA & John Templeton Foundation

Junior Achievement programs in other states have different partnerships.

Shareholders are often impressed with corporate involvement in positive social initiatives and happy when companies are beneficiaries of tax incentives for charitable spending. I am concerned about the effect of branding in education lessons for eighth-graders. Corporations should not be involved with the education of children, but these corporations have money to devote to programs like Finance Park. If it weren’t for corporate sponsorship, programs like these would likely not exist.

Corporations have been involved with public education since the 1920s, but the trend has increased in recent years. As the United States falls behind other countries in education, citizens look to blame this country’s public school system. We look to corporations that create charter schools as an alternative, with the idea that schools with a better funding source, corporate profits rather than taxpayer money, will help solve the educational crisis. Results show that charter schools have mixed results when compared with public schools.

The lessons in personal finance are important, so it’s a good thing that kids are getting the exposure to real-life simulations. Can it be done without corporate involvement and indelible branding at an impressionable age?

Photo: daveparker
Junior Achievement Finance Park, Stanford CREDO study

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Tavis Smiley and Dr. Cornel West have been working hard to bring the issue of poverty into the consciousness of the citizens and political discourse of the United States. As a team, Smiley and West have been touring city to city, speaking to audiences concerned about the increasing wealth gap in this country. Their book, The Rich and the Rest of Us: A Poverty Manifeseto, is the culmination of their observations of American citizens throughout these travels.

While the economy is technically in recovery from the Great Recession, a vast slice of Americans have not experienced a real recovery. A “jobless recovery,” where the beneficiaries of an improving economy are the wealthy while the middle class struggles with unemployment, is not a real recovery. Despite this disadvantage, the prevalence and pervasiveness of poverty is still astonishing. According to Smiley and West, 150 million people in this country are in or near poverty. That number represents one out of every two individuals — half the country.

Tavis SmileyThe issue of poverty, affecting this number of individuals, is bigger than poverty itself. The government tallies 46 million Americans living in poverty according to the 2010 census and the government’s own definitions of poverty. Many more individuals are affected by poverty because they are living dangerously close. Many middle class households, particularly those already living in debt or in a paycheck-to-paycheck situation, are one lost paycheck away from a dangerous financial situation, and many families are already experiencing a personal decline due to the inability to find gainful employment.

Poverty has traditionally been a problem classified as urban or rural. Minorities have been and are disproportionately affected by poverty, but poverty is not a suburban problem, too. With white, middle-class families now facing the issue of poverty, whether by losing a job or being dangerously close to not being able to afford their homes, the issue is gaining more attention. While poverty is making life difficult for an increasing number of Americans, those in or seeking office, whether Democrats or Republicans, are not concerned. In order to receive a voice in political discourse, you need money. While the United States may have been founded on the ideals of freedom and liberty, these have generally only been granted to an elite selection of its inhabitants. The distribution of social power is expanded only by revolution among the disenfranchised.

Smiley and West contacted Consumerism Commentary with an interest in speaking to me about these issues — to defend their position, and to open my eyes to the realities faced even by the middle class in this country, many of whom are the “new poor.” We arranged an interview for the Consumerism Commentary Podcast, airing Sunday, May 13. Unfortunately, Dr. West was unable to participate in the interview at the last minutes as he was in New York waiting for a verdict after a conviction related to a political protest in that city. Tavis Smiley was able to participate, but our time together was short. We weren’t able to address all the questions I had prepared, but the discussion was valuable.

Listen to the entire discussion with Tavis Smiley, podcast host Jay Frosting, and myself, Luke Landes, once it is available this weekend. Smiley is the host of Tavis Smiley on PBS and The Tavis Smiley Show on Public Radio International. Update: Listen to the podcast here.

In the interview, Smiley dispelled many of the myths about poverty. One such myth is the idea that those in poverty are entirely to blame for their financial situation.

On Consumerism Commentary, I’ve written that taking personal responsibility for your decisions, financial and otherwise, plays the biggest role in achieving financial security and independence. This is today’s American promise: “Anyone can make it in America.” The media love rags-to-riches stories, even if it doesn’t reflect a reality for the majority of Americans. It’s true that this country’s brand of capitalism is favorable to the situations European immigrants left behind. Religious intolerance, a caste system based on ancestry, and an economic system wherein generally only the first-born male would have rights to any property drove pioneers to create a new society or join a country with a promise to create a better life for yourself. Never mind that doing so displaced others who occupied the land here.

Even in this new society, you had to be a member of the elite to receive the rights as endowed. Not everyone begins on equal footing. The lack of early educational opportunities throughout this country is one of the strongest causes of generational poverty. As Smiley addresses in the podcast, Washington state is the home to large multi-national corporations, providing a huge advantage to those who reside in Washington thanks to the tax these companies pay. The educational opportunities in Washington state far outshine the opportunities in Washington, D.C., for example. Until a quality education for the entire country is given priority, generational poverty will continue to exist.

In the interview, we also address the issue of austerity. The concept of reducing the deficit and national debt is and should be a high priority for policymakers, but the timing of austerity measures, such as reducing funding to societal programs, is just as important. Smiley argues that we cannot cut the budget for these important issues when the economy is not “flowing,” saying that the budget is being balanced on the backs of poor people. Budgets are moral documents, and you can determine a country’s real priorities by evaluating where the money is going. If this country does not address the economy for the 99 percent — those who have seen no benefit from this “jobless recovery” — rather than the “1 percent,” Smiley warns of the downfall of the United States as a world leader.

No empire in the history of the world that at some point did not falter or fail. Every empire had its day. Americans don’t want to think we could be dangerously close to the edge… Poverty is the moral and spiritual issue of our time.

Time did not permit us to explore all the topics I would have liked to cover in the interview with Tavis Smiley. For example, I would have liked to talk more about the Occupy movement and getting a national stage for the issue of poverty. In recent weeks, civil rights are again receiving national attention, from the perspective of same-sex marriage. Not to minimize that issue of equal treatment under the law for all individuals, poverty deserves the same attention from our nation’s leaders.

Be sure to subscribe to the Consumerism Commentary Podcast to hear the interview with Tavis Smiley, where we address more topics related to poverty than are outlined above, as soon as it is available. Be sure also to read The Rich and the Rest of Us: A Poverty Manifesto. Update: The interview is now available as a podcast here.

Photo: DC Central Kitchen

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This is a guest article by Jennifer Calonia, Junior Editor at GoBankingRates. In the article, the author offers suggestions for staying fit without breaking the bank.

It’s that time again: Beach season is fast approaching and franchise gym promotions are in full swing to lock you and your checking account into a pricey workout regimen. It may be tempting to jump on board the latest exercise trend, but expensive programs and spa-like facilities are not only unnecessary, they’re a hazard to your financial well-being.

Instead of signing up for a pricey membership, consider low-cost fitness options and free workout routines that don’t muscle hundreds of dollars out of your pockets monthly.

Skip the treadmill

Purchasing a treadmill can cost at least $400 (or much more) and an annual gym membership runs about the same amount for a mid-level fitness center. A frugal alternative to the treadmill routine is simply running outdoors. If your neighborhood isn’t necessarily runner-friendly, seek out jogging paths near park facilities or visit your community track (typically you can use a local community college or high school track during off-hours) for a free run.

At most, you’ll want to purchase a quality pair of running shoes (which costs anywhere from $75 to $150) to withstand the rougher elements of the outdoors. Not only do you save hundreds by avoiding a gym contract with free workout routines like this, you also get a more challenging workout due to the added wind resistance and have interesting scenery to look at as opposed to the back of someone else’s head.

Editor’s note: See ten things your gym won’t tell you.

Tap into the web

The internet offers a range of free exercise videos that focus on a variety of muscles and help raise your heart rate. These videos are also a great alternative to specialized exercise studios, which charge upward of $100 per month for workouts.

For example, unlike the financial demands that yoga studios can inflict upon your budget, YouTube can satisfy all your yoga needs with beginner to advanced poses at no cost. A simple search using the keyword phrase “yoga workout” bring up a list of 20-minute to full 45-minute yoga classes at varying skill levels. This workout routine will, at most, require you to buy a yoga mat at under $10 from a local sporting goods store.

If you really must have a more standardized yoga practice, try visiting YogaVibes.com, which offers unlimited yoga class streaming for $20 a month. While this option requires that you join a membership program, it is at least cheaper than the $100 or more you’d pay monthly at a boutique yoga studio.

Join the community

For active bodies that are motivated by the perseverance of others, a community fitness event may be more to your liking. Joining group activities like trail hiking or a community basketball league are great ways to get engaged in a fun workout while meeting new people.

These group settings typically come at a low out-of-pocket cost. For example, I joined a paid basketball league and the registration fee was only $20 for the three-month season. To get the same group atmosphere, you can also visit your local recreational park for a free pick-up game at the basketball or tennis courts.

Keep on swimming

If your apartment facility already has a pool, or if your home has the luxury of an average size swimming pool, you might as well use it as an in to free workouts. You’ll get a low-impact workout that is great for muscle definition, just in time for the summer months.

Workout junkies who don’t have a pool at home can visit public swimming pools in the area. Generally, a low entrance fee of about $5 is collected at the door for each swim.

Preparing yourself for a beach-ready physique doesn’t have to topple your finances. There are legitimate and effective free workout routines and free exercise videos that can be used to achieve comparable results and maintain the motivation you need to reach your fitness and health goals.

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Yes, it’s frustrating to need to reach for my wallet and type in my credit card number every time I want to complete a purchase online. According to a recent MasterCard and Harris Interactive survey, 58 percent of consumers agree with me. Consumers even abandon their online shopping carts when the check-out process requires too much effort.

That might be good news for consumers. If a small barrier is all it takes to prevent someone from making a purchase, perhaps that purchase was not a necessity. Leaving more money in the bank rather than spending that money on some product that does not drive enough desire to get through a relatively painless process can only be beneficial to the shopper’s financial condition. Retailers, on the other hand, will obviously see consumers’ lack of purchase consummation as a problem, directly affecting sales and revenue.

The solution is to store the details pertaining to your payment method so it can be automatically retrieved at the point of sale. Amazon.com is certainly a pioneer with this approach. This company’s one-click purchasing process using stored credit card or debit card information makes buying a smooth process, although it created an uprising about patents when this feature was introduced many years ago.

PayPal has a good solution as well. Stores that allow payments through PayPal enable users to associate a credit card and avoid the need to type in a credit or debit card number each time.

Consumers can also use browser add-ons or downloadable programs, like LastPass, to store credit card information retrievable with a click or two.

Purchasing items online is much safer and more secure than being out in the world, carrying a wallet with all your credit cards and cash, and handing your credit cards to a waiter or gas station attendant who disappears for several minutes. Online security, as long as you confirm you are visiting a secure website, is trustworthy. No one is going to intercept my secure internet connection when I’m buying something online, and for the most part, I trust companies not to expose a database of credit card numbers to the public. That exposure is just as likely to happen when shopping in brick-and-mortar stores as when shopping online. The situation is unlikely, and shopping online does not add to that risk.

There is no universal solution, a one-click purchasing experience like that on Amazon.com, available to all retail websites. But there is also no equivalent to the one-click purchasing experience when you shop in store locations, either. Swiping a payment card or transmitting a secure wireless signal from your mobile phone gets close to the experience, but you still need to take out your wallet or your phone.

While retailers want to make it easier for consumers to pay money, consumers should be careful about making this process to automatic. Trading money for an object of some type should involve at least some opportunity to stop and consider the purchase. Technology makes it incredibly easy for consumers to part with their cash or increase their debt burden, and retailers want to make it easier. Consumers should be working against that trend and moving in the opposite direction.

If not, retailers will soon be able to simply reach into consumers’ pockets and take that money. Some companies offer free trial periods for their products and services without making it blatantly obvious that customers will be charged at the end of the trial period. Some create significant barriers to canceling the service in advance of the ending of the trial period. Consumer groups often criticize these policies, and some might be considered scams. If consumers make it increasingly easy to give up money without thought, then we’re just as much to blame.

Photo: Håkan Dahlström
BusinessWire

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Get to Work If You Want to Be Rich

by Flexo
Movie marquee

How much time do you spend in front of the television, socializing with friends, or watching movies? I freely admit that I spend too much time watching television. There are certain television programs that entertain me, and particularly during stressful times in my life, I need some type of outlet that makes me laugh, raising ... Continue reading this article…

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The Rich and the Rest of Us

by Flexo
Cornel West and Tavis Smiley

Dr. Cornel West is a Princeton University professor and author. Tavis Smiley is a television and radio talk show host and author as well. The two have known each other for a long time, and last year they toured the country to hear from citizens and talk about the issue of poverty in America. After ... Continue reading this article…

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How to File a Free Income Tax Extension

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I finally provided my tax details to my accountant yesterday. As I expected, there won’t be enough time to work out the details before today’s tax filing deadline, so I’ll be filing extensions. In years past, when I filed for myself and my taxes were simpler, I usually waited until the last day. My procrastination ... Continue reading this article…

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Millennials Want to Be Rich More Than Anything

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Dollar

Since 1966, the Higher Education Research Institute has been conducting a study of first-year college students to determine personal goals and values. This collection of data has offered research a chance to see how priorities change over the years, and there are striking generational differences in the results. Recent research at San Diego State University ... Continue reading this article…

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