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Filled Under: Financial

Online financial program helps students manage money

GENESEE COUNTY, MI – A financial literacy program called Banzai is making its way into the curriculum of schools around Genesee County.

Dort Federal Credit Union started sponsoring the program in 2013, and it is now available for free to 91 schools in Genesee County.

Morgan Vandagriff, 37, of Provo, Utah, cofounded Banzai shortly before the financial crisis of 2008. Vandagriff, who worked in private wealth management, said he was astonished by the overall lack of financial knowledge.

The goal of Banzai is to give students the choice to make good choices, to give them a fighting chance to have a finance-literate life, he said.

The online program helps students manage finances by taking them through a series of real-life scenarios and tasking them with making money-related decisions. They are given a glimpse of what to expect entering the workforce and advised how to balance checkbooks, save money, manage debt and make big purchase decisions.

Vandagriff said the program was designed for 13- to 18-year-olds. The amount of time Banzai takes to complete depends on a students financial literacy. It is possible, he said, for some high school seniors to finish it in one sitting.

Weve received positive feedback on Banzai, he said. A lot of kids say they wish their parents had gone through the program.

JaQuetta Moore, a business teacher at Carman-Ainsworth High School, started using the program in her four finance classes at the beginning of the school year. The response from students, teachers and parents has been positive, she said.

It connects the classroom with the real world, Moore said. It leaves students with an understanding of finances that is much-needed nowadays.

Moore said 124 of her students, all seniors, have so far used Banzai during class and on their own at home.

It gives them a visual and makes them think, so that they gain knowledge of dealing with money and avoid being cheated, too, Moore said.

About 70 teachers in Genesee County, and more than 14,000 teachers nationwide, use the program, said Rachel Yentes, who works with Banzai public relations. It is also available to seven schools in Lapeer County and two in Shiawassee County.

Many teachers in the Flint area, Yentes said, may not know they have this resource available for free.

I plan to incorporate the program into my classes every year, Moore said.

Calls for wider inquiry into financial planning industry

  • NAB leak reveals persistent bad behaviour in financial planning
  • NAB takes years to pay compensation after investment nightmare

Calls are growing for a royal commission into the entire financial planning industry as a new leaked document reveals National Australia Bank identified five key areas within its wealth advisory activities for further investigation.

It was revealed by Fairfax Media over the weekend that NAB had quietly paid $10 million to $15 million in compensation over the past five years to 750 customers who received inappropriate advice.

Don’t Let These 3 Financial Disasters Happen to You

Dont let a financial catastrophe derail your finances. Photo: Louise Docker via Flickr.

Financial disasters can be crippling. If youre unprepared, they can lead you to lose your home, declare bankruptcy, or spend retirement barely scraping by. Fortunately, they can usually be avoided with a little planning and action. Here are three critical disasters to avoid.

Having no emergency fund when disaster strikes

Its easy to skip merrily along in life — going to work, paying your bills, enjoying time with family and friends. And if you have a few thousand dollars in the bank, too, you might think youre all set. Youre probably not, though, because as is the case with many of us, you could be just one catastrophe away from financial ruin. Imagine, for example, losing your job and finding that it takes you a long time to get another one. Imagine that you experience a medical crisis or an accident that has you unable to work for a long time — or that such a development happens to a loved one and you become a caregiver, unable to keep up with your own job. Even a sudden huge car-repair bill can trigger a dangerous chain of events, especially if you have to charge it on a credit card and then find yourself facing 20% interest rates on a growing debt load.

All of us need to have some emergency plan, which often takes the form of an emergency fund stocked with enough money to keep you afloat for at least three months or, preferably, six to nine months. (Its helpful here to think of how long you might be out of work, how quickly you tend to find new jobs, etc.) The fund should be able to cover mortgage or rent expenses, food, insurance, transportation, and other necessities. Keep that money accessible by putting it in short-term CDs or a savings account. Parked in stocks, it might grow faster, but it might also temporarily plunge in value just before you need it. 

PRESS DIGEST- Financial Times – Feb 23

n>Feb 23 (Reuters) – The following are the top stories in the
Financial Times. Reuters has not verified these stories and does
not vouch for their accuracy.

Headlines

MINISTERS SET ASIDE 2 BLN STG TO WRITE OFF STUDENT LOANS
THIS YEAR

(on.ft.com/1JAKd3Q)

ABRAAJ TAKES $400 Million SLICE OF TURKISH ONLINE GROUP
HEPSIBURADA

(on.ft.com/1AkzfJN)

ROTHSCHILD EYES EARLY BONUS ROUND TO AVOID POSSIBLE WINDFALL
TAX

(on.ft.com/1AzBSGh)

HSBC CHIEF GULLIVER PULLED INTO BANKS TAX SCANDAL

(on.ft.com/1GjcCWO)

Overview

British Ministers have set aside 2 billion pounds ($3.08
billion) to cover potential write-downs in the value of existing
student loans in this financial year alone following an increase
in the rate of graduates being unable to repay, according to
Treasury documents.

Dubai-based private equity group Abraaj Capital acquired 25
percent stake in Turkeys online retailer Hepsiburada. The deal
was valued more than $400 million.

Boutique investment bank Rothschild considers
paying its 2014 bonuses early with a view to avoid payment of
extra taxes that might be levied if Labour comes back to power.

Stuart Gulliver, the chief executive of HSBC Holdings Plc
was drawn into a tax evasion scandal after it was
claimed that he had saved millions of dollars from the taxman in
a Panamanian company through its Swiss private bank.

($1 = 0.6502 pounds)

(Compiled by Zara Mascarenhas in Bengaluru)

Skills shortage seens as holding back growth in financial sevrices

DOMINIC COYLE

Companies in financial services know that they lack the specific staff talent they need to succeed but very few are confident of hiring the right people, with the majority admitting a lack of trust in the sector is making things even more difficult.

According to the findings of a new survey, 70 per cent of global chief executives in the financial services sector see the limited availability of key skills as a threat to their prospects for growth. However, only 5 per cent are confident they can secure all the skills they need.

The image of FS has been eroded, the report says, making it harder to compete with other industries in attracting people with prized skills. As many as 62 per cent of CEOs in the sector see lack of trust as a threat to growth, a figure that is even higher than last year.

PricewaterhouseCoopers surveyed 410 CEOs in financial services across 62 countries for the report, A New Take on Talent, which is part of its annual CEO Survey.

Evidence from a separate survey shows that more than eight out of 10 professional staff are open to switching jobs this year.

Retaining key staff Lincoln Recruitment Specialists’ salary and employment insights survey gauged the views of more than 1,000 employers and employees over a four-week period late last year. It found that retaining key staff is becoming an increasing concern for employers, with job opportunities and the confidence to switch companies increasing dramatically in the aftermath of the recession.

Almost three-quarters (72 per cent) of senior accounting and finance professionals responding said they envisage switching jobs in the first half of the year.

Among professionals generally, 43 per cent said they were actively looking for new opportunities in an economy which appears to be switching from an employers’ market to an employees’. An alarming 85 per cent envision changing roles within the next year.

“A combination of increased recruitment across the board, a widening talent gap and the return of employee confidence and mobility will present companies with the most challenges in 2015,” predicts the survey.

The survey focuses on the professional services sector, particularly legal, accountancy, insurance, asset management, banking and human resources. It notes that, last year, 58 per cent of respondents reported an increase in salaries across those disciplines, while 48 per cent said they received bonuses.

It said pay rates, bonuses and benefits will likely be crucial in the retention of key staff this year.

Gerard McDonough, tax director, HR services, at PwC, said: “The key challenge financial services CEOs globally and in Ireland are faced with is in how to attract, train and retrain people who, for example, combine digital and financial service skills – few as yet possess such hybrid capabilities.”

According to PwC, the need to create a more flexible and customer-centric organisation demands fewer people with specialist product expertise (depth) and more all-round “athletes” (breadth).

“These people will have the varied technical skills and multi-industry experience to move easily between clients, countries and assignments,” the report says.

In Love? 9 Financial Facts To Know About Your Partner Before Commitment

Valentine’s Day is coming up, so engagements are on at least a few people’s minds. A 2013 study found that six million people were planning to pop the question or expecting to answer on cupid’s holiday.

If a major commitment is on the horizon for you and your loved one, you’ll also need to start thinking of the practical side of taking a relationship to a deeper level — namely when it comes to money. While it may not sound all that romantic, becoming more serious about someone does have financial implications. It even has consequences for your relationship: being clear about money from the outset can obviate potential disputes.

“If people combine finances or jump into stuff before knowing where they are, it can create a lot of conflict in the relationship. Vetting that beforehand can smooth out the ride,” says Katie Brewer, certified financial planner and financial coachtoGen X and Gen Y atYour Richest Life.

But learning about your partner’s finances should not be an interrogation — nor does it need to be. In fact, you probably already have made observations about his or her money habits or financial situation simply by dining out, going on vacation, discussing the news or brainstorming how one of you can get a raise. (Read here to find out how to get to know your partner’s financial history organically.)

However, there may still be some unknown information that it would behoove you to know, if you’re ready to take the next step.

The 3 Keys of Effective Financial Planning

The potential number of financial planning topics you can think about, plan for, and consider is pretty near limitless. But at the end of the day, there are only three things you really need to be paying attention to. 

1. Your spending
I know youre already rolling your eyes, but its true: No amount of savvy investing or career success will make up for poor spending habits. Overspending puts you in debt, which puts you in trouble. 

Head this kind of trouble off at the pass by prioritizing. You have a finite amount of money, so you where do you want it to go? What do you actually really want to spend money on? 

No one can tell you that your priorities are wrong: If you want to buy lattes every day because it pulls you away from your desk at work, more power to you. But to make your budget work, you might need to cut out something you care about less, like going to the movies or buying new shoes. 

This is not a new concept, of course. But its hard to do because it takes time and it involves setting boundaries. Thats why it helps to think not about what you cant have, but rather what you must have. 

Prioritize spending for the musts and enjoy them thoroughly. Then forget about the rest. 

2. Your saving 
When developing a budget (thats what spending priorities are, in the end), you assume that you have an income. But what if something happens and your income dries up?

This is the reason one of your priorities should be savings. The last thing you want is to be evicted or go into debt because you didnt plan ahead for volatility. And in this day and age, volatility is pretty much par for the course. 

So, what do you do? Save. Save as much as you can. Make it a game if it helps, or start small and build from there. The secret is that the actual number is far less important than the habit itself. Whether you manage to sock away $200 a month or $2,000, you will be amazed at the results. 

It might not seem like much at first, but that money will grow far faster than you realize — and then you can explore the fun and exciting world of investing. 

But for now, just save. Something, anything. 

3. Your debt
Nothing will crush awesome saving and spending habits like debt. Its unfortunate, but its true. 

Your totally affordable mortgage is one thing. Im talking about hairy high-interest debts, like credit cards. No amount of savings will appease the insidious growth of a credit card balance, so make this another priority.

Tackling your debts as soon as possible will not only save you money; itll also lob off another part of your discretionary income that you can later apply to savings. Its a nifty little trick that will make the savings habit all the more satisfying.

Of course, its also frustrating. Here you thought you could prioritize your morning coffee, when in fact those types of expenses necessarily have to take a backseat to the real priorities. But even if you put yourself on a crazy debt-reduction and savings plan, build in some space for fun. Maybe it means living in a smaller house so you can still travel, or maybe it means carpooling to work so you can enjoy your lattes. 

Whatever your plan, tackle these three critical areas and you are very much on your way to financial security. 

Friday Sector Laggards: Utilities, Financial

In afternoon trading on Friday, Utilities stocks are the worst performing sector, showing a 1.9% loss. Within that group, Exelon (NYSE: EXC) and Northeast Utilities (NYSE: NU) are two of the day’s laggards, showing a loss of 3.6% and 3.1%, respectively. Among utilities ETFs, one ETF following the sector is the Utilities Select Sector SPDR ETF (AMEX: XLU), which is down 2.0% on the day, and down 4.76% year-to-date. Exelon, meanwhile, is down 9.63% year-to-date, and Northeast Utilities, is down 5.33% year-to-date. Combined, EXC and NU make up approximately 8.0% of the underlying holdings of XLU.

The next worst performing sector is the Financial sector, showing a 0.4% loss. Among large Financial stocks, Assurant (NYSE: AIZ) and Charles Schwab (NYSE: SCHW) are the most notable, showing a loss of 7.6% and 3.0%, respectively. One ETF closely tracking Financial stocks is the Financial Select Sector SPDR ETF (XLF), which is down 0.3% in midday trading, and down 1.42% on a year-to-date basis. Assurant, meanwhile, is down 10.27% year-to-date, and Charles Schwab , is down 3.58% year-to-date. Combined, AIZ and SCHW make up approximately 1.3% of the underlying holdings of XLF.

Click here to find out 25 Dividend Giants Widely Held By ETFs raquo;

Comparing these stocks and ETFs on a trailing twelve month basis, below is a relative stock price performance chart, with each of the symbols shown in a different color as labeled in the legend at the bottom:

Here’s a snapshot of how the Samp;P 500 components within the various sectors are faring in afternoon trading on Friday. As you can see, six sectors are up on the day, while three sectors are down.

6 Common Myths About Financial Planning — Busted

In this era of DIY, weve grown accustomed to doing professional-level work on our own, whether its concocting Top Chef-worthy weeknight meals, renovating our homes or crafting up a storm.

After all, cant you learn most things nowadays by pulling up a YouTube tutorial?

But not everything can be properly captured in a five-minute video — especially when it comes to something as important as your finances. When your money and future are at stake, theres nothing wrong with asking for a little help.

Some folks think because they picked an investment or two in their 401(k)s that they are qualified [to be their own adviser], says Holly Wolf, a chief marketing officer for a bank in Chester Springs, Pa., who has worked with professional financial planners for about 20 years. You may be able to repair your car yourself or fix your own roof, but you probably dont have the expertise to watch your money like a hawk.

Wolf first reached out to a planner when she realized that she and her husband were doing a good job feeding their nest egg — but not enough to help it grow. When we started investing, we had no experience and I needed someone to guide us, she says. We had the savings part down, but not how to make our money work for us.

But not everyone is as ready and willing to reach out for financial guidance: A survey by Charles Schwab found that one in three people dont seek any outside input when it comes to managing their money.

And, in large part, that could be due to some prevalent myths and misconceptions people have about using a financial adviser. Were helping to bust some of those mistaken notions in the hopes that youll be less tepid about seeking advice for your own money goals.

RELATED: Checklist: I Want to Set Financial Goals for Myself

Myth No. 1: Only rich people need financial planners.
Financial planning is for anyone who wants to organize their finances, set money goals and make a plan to reach those goals, says Ann Arceo, president of Savvy Duo Financial Planning. While its true that there are some financial planners who target wealthy clients, there are a growing number who provide affordable advice — regardless of a clients net worth or income.

Part of this misconception may be rooted in the fact that people often lump financial advisers into the same category as other professional service providers, such as attorneys, who often charge expensive retainers.

In fact, price is one of the biggest factors to discourage people from seeking help from a financial pro. In a recent TIAA-CREF survey, 44 percent of respondents said that they thought good financial advice would cost more than they could afford.

The reality? There are professionals who work with younger individuals and middle-class families on an hourly or fixed-fee basis, says Eleanor Blayney, a consumer advocate with the CFP Board.

So if youre unsure of whether you can afford a planner, be honest about the budget youre working with and ask about that persons fee structure. If the planner cant work with you, she may be able to recommend someone who can.

Myth No. 2: My finances are simple — I can just go it alone.
You might not have a lot of different assets to manage, but its possible that your finances are more complex than you realize.

For example, parents with young kids usually recognize that they need to buy life insurance in order to protect their new family. But according to Arceo, what they often overlook is disability insurance, which can help cover some lost income if one or both parents are suddenly unable to work due to an unexpected illness or injury.

A financial planner could offer that type of insight, possibly bringing up options you may not have discovered on your own. Plus, even if you truly believe you have an uncomplicated money life, it never hurts to have a second opinion on your progress.

The idea of having [an adviser] working with you throughout various stages of your life is akin to seeing a doctor over time for annual checkups, says Erik Klumpp, founder of Chessie Advisors. The relationship you build with your doctor helps you spot a disease in its early stages, instead of just going to a doctor after youre in tremendous pain.

RELATED: Are You Financially Healthy? The 3 Numbers You Should Know

Myth No. 3: Financial planners help people only with investing.
While investing will likely play a key role in building your portfolio, a good financial planner should be able to help you with your whole money life — including budgeting, insurance, estate planning and retirement planning, among other areas.

In fact, if you find that youre working with a financial advisor who isnt providing enough comprehensive advice, dont be afraid to consider someone new.

Thats what Wolf did.

I liked [our previous financial adviser] and his performance was good, but he never showed us the big picture, she explains. I would ask him if we were on target to hit our retirement goals, and his answer was always yes, but he never showed me how. [Our new planner] meets with us quarterly, and we have a very detailed plan for retirement, insurance and estate planning.

RELATED: 10 Burning Questions Youve Wanted to Ask About Investing

Myth No. 4: Once I hire a financial planner, I dont need to do anything.
Dont think that after just a few meetings your work is done — in fact, youre probably barely past the paperwork phase. We can do a lot for you, but we cant make you spend less and save more, Arceo says. You have to be willing to make the effort.

One benefit of seeing a financial planner is getting your affairs organized and streamlined, but thats only the beginning, Blayney says. A good financial planner will require your input, and want to partner with you. After all, it is your life goals that youre working on, she adds.

So expect to do some of the legwork required to set your plan in motion. Your planner cant increase your 401(k) contributions for you, change your tax withholdings, or decide whom to name as beneficiaries on your policies — those are all in your control.

But one thing a financial planner can do is provide accountability, and act as a sounding board, says Colin Drake, CFP®, RLP®, financial planner and founder of Drake Wealth Management. [We can provide] behavioral support and help keep clients from shooting themselves in the foot with bad decisions.

RELATED: 9 Ways to Prep for Your First Date With a Financial Planner

Myth No. 5: Financial planners are interested only in making money.
If youre a bit distrustful of financial advisers, we dont blame you. The Bernie Madoffs of the world have certainly caused a lot of people to lose massive amounts of wealth.

The bad press could be partly to blame for why people are so leery about entrusting their hard-earned money to someone else. In fact, 64 percent of those polled in the same TIAA-CREF survey said its hard to know which sources of advice can be trusted — thats up 16 percentage points from last year.

If you have trouble believing a planner isnt just in it for the money, then consider looking for one whos a fiduciary. That means that the planner has met certain qualifications and is held to a standard requiring that he or she must put the clients interests first. As a financial planner and a fiduciary, it is my legal responsibility to act in my clients best interest, explains William Davis, Executive Vice President of Apex Financial Advisors. This includes, among other things, full disclosure of any conflicts of interest, as well as all sources of compensation.

So avoid flashy sales talk and do your homework, suggests Elena Dixon, a managing associate with Jean Leonard Wealth Management. This could include interviews with the advisers to see if they have clients similar to you in age, income, circumstance and goals — as well as if they have qualifications in a certain area that might be of importance to you, such as retirement or estate planning.

Myth No. 6: You dont need to pay attention to credentials.
On the contrary, the letters that follow a financial planners name can be critical. In general, look for the Certified Financial Planner(TM), or CFP®, designation, which is a sign that the planner has demonstrated knowledge across many different financial topics.

A CFP® professional must pass a comprehensive certification exam, which tests the ability to apply financial knowledge to real-life situations, Blayney says, adding that the exam also covers tax planning, employee benefits, retirement, estate planning, investment management and insurance.

If your planner has other designations in addition to CFP® — like CPA (Certified Public Accountant) or CFA (Chartered Financial Analyst), who focuses more on investing — then all the better. And while a designation is no guarantee that youll personally click with a planner, it can be a good indication that the individual possesses the training to help you handle your whole financial life.

RELATED: 9 Types of Financial Advisers: Which One Is Right for You?

This post originally appeared on LearnVest.

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Schwab-Pomerantz: Visionary wants financial security for all

If Carrie Schwab-Pomerantz had her way, there would be a US Department of Financial Security. Headed by a Cabinet-level appointee, the job would help Americans take better care of themselves in matters involving money. In making the appointment, she would want the president to say “financial literacy is a national cause.”

It is a cause Schwab-Pomerantz has single-mindedly pursued for 30 years. Her passion has been to show how “financial education can change lives” and help address the needs of the tens of millions of Americans with no back account, credit or savings, the millions more scraping by paycheck to paycheck, seniors lacking a nest egg to see them through their golden years. “Parents, unbanked, kids, the working poor, the 50-plus, from rich to poor — it cuts across all lines,” she said.