There are nearly 128 million workers in the United States.  Only 10% manage their money well. 

To me, the importance of financial education is quite clear.  When I saw the statistics published by the National Institute of Personal Finance Employee Education – the importance of financial education is even clearer.

• 90% of our nation’s workers have difficulty managing their money and not surprisingly – aren’t saving for retirement. 
• More than half admit spending 21 hours every month while at work – dealing with personal money matters. 
• Two thirds say they have trouble paying their bills on time and worry about money.

The real challenge when it comes to financial education is trying to get and keep everyone’s attention.  It takes time and a commitment to learn about banking and credit and savings and investing.  Sometimes learning about money just doesn’t hold the entertainment factor that’s needed to hold someone’s attention – regardless how badly they might need the information.

That’s why I do whatever I can to make learning about money – fun and mental.  Games help.  They provide a non-threatening, playful, competitive atmosphere with a mutual focus. The learning comes from the playing and talking and problem solving everyone must think through and do.

Games require critical thinking.  They make the abstract concrete.  Simple games that require counting or board games like Monopoly that show you the money and bring out the capitalist spirit in each player – are what help make learning about money – fun and mental.  It’s your money so take it personally ™. 

Here’s to your health and wealth.

Dear Lindsey,

How important is getting your MBA from a top graduate school verses a middle of the road or maybe online school make? What difference does it make regarding future pay and opportunities?

Thanks,
Marie

Dear Marie,

Educational decisions are personal and the right answers are different for everyone. What I can do is provide you with the right questions to ask to make the right move for you.

Here are three questions to help you make the best decision for you:

1. Why are you getting an MBA?
Education is a wonderful, valuable endeavor and a worthy goal in itself, but in my opinion, you should always have an end goal in mind. That desired result can help you make the decision about the best school for you. For instance, if you are getting an MBA to help you make a career change, your top priority should be finding an institution that is known for guiding people into careers in the new field you want to join. If your goal is to increase your technical knowledge of accounting, financial management, etc. (for instance, to gain a higher position or salary bracket in your current organization), then the school name may not be as important as simply gaining the knowledge you need. If your number one goal is high-level networking, then a “brand name” school might be the choice for you. If post-grad school salary is the key factor for you, then ask schools for the average starting salaries of their graduates.

Read the rest of my response to Marie’s question on Excelle.com…

TAGS: business school, Career transition, Education, MBA, Women and Careers

It’s back to school across the nation and I want to give credit where credit is due.  Well intended parents are sending their kids off to college usually with a credit card.  I want to help you be sure they steer clear of some common credit card mistakes.

The average consumer has nine credit cards.  Don’t let your student get caught in the crosshairs of potential debt.  Collecting too many credit cards is absolutely not a good thing.  Even if the cards have zero balances, multiple open accounts mean the account holder is ripe for the potential temptation to max out on all the plastic.  So school them well before they get to school and are confronted with all those offers of free giveaways if they just sign up for yet another piece of plastic.

The credit card introductory rate isn’t forever.  But how many young consumers remember that?  If they do their homework, they’ll know that once that (usually) six month teaser, introductory rate is over it’s not unusual for the rate to jump to 18 or 20%.  That is an ugly and unexpected surprise for the uninformed.

A big lesson to be learned about credit cards is the importance of reading the fine print.  That’s where the (devil and) details of the offer are printed in tiny but all inclusive explanations.  Most credit cards have limitations about balance transfer fees, amounts and new purchases.  Your student should be well-schooled about the importance of knowing those tiny details.

Be sure to choose a credit card for the right reasons.  By this I mean, don’t let your student choose a card just because it has other attractions such as a rebate or rewards program or is offered by a well known icon or celebrity.  Remind your student that credit card granters aren’t their friend.  It is a business that wants to earn as much money as it can.  So make it your student’s business to shop for the card that has the best interest rate rather than the most interesting look.

Regardless the credit card that’s chosen as being the right one for your student – make sure they understand that even with the right credit card comes ongoing responsibilities:

• Credit card bills should be paid off at the end of every month.  Making a minimum payment only will get them in trouble for a very long time.  For example, if your student has a $1000 balance with a 17% APR and pays the minimum $25 monthly amount, it will take them 57 months to pay off that debt and cost $452 in interest charges. 
• Always pay on time, every month.  Be sure your student knows to check their account statement for the due date and pay at least 3-5 business days ahead of time

It’s vital that your student assume responsibility for their own money management.  Yes, it is time for them to understand it’s their financial thumbprint from now on.  It gives new understanding for them when they’re told:  It’s your money so take it personally ™ .

Anyone with health insurance is a potential victim of medical insurance fraud.  The crime can range from someone using your birth date and your social security number to running up bills and creating false records in your name.  The bills can be huge for services the victim never received as well as legal, medical and insurance fraud issues that take years to untangle. 

How can you protect yourself from becoming a victim of medical identity theft?

• Protect your health insurance card.  Treat it like your ATM, debit or credit card that has a million dollar spending limit (which is the cap on how much many health insurance plans will pay for your care over your lifetime.)
• Shred old insurance statements and old insurance cards.
• Get a copy of your medical records every year from each of your doctors and review what’s there to make sure there are no errors (you may be charged for copies and postage).
• Be sure to open and read all mail from your health insurance company – especially those EOBs (explanation of benefits) statements that come after your insurer has received a claim.  Anything that’s not a service you received or remember, call your insurance provider immediately.
• At the end of each year, ask for a list of all benefits paid out in your name and challenge any discrepancies.

If you believe you’re a victim of medical identity theft – here’s what you need to do immediately:

1. Contact your health provider and insurer.  They’ll request a new card for you and have a watch put on your old one.
2. Keep careful notes which include the name and contact information of everyone you speak to (I suggest a spiral notebook rather than random pieces of paper so every conversation you have regarding this matter is contained in one place) and write the date, time and name of the person contacted and what was discussed.
3. Check your credit report with the three credit reporting bureaus (Experian, TransUnion and Equifax) because medical identity thieves can use the information they have from your health history to access your bank accounts.)  Look for errors or activity that you know isn’t yours and work to correct these errors.
4. Contact your local police and file an incident report (request a copy for your files, too).
5. File a complaint with the Federal Trade Commission by completing a fraud affidavit form which you’ll need in order to correct your records and help the government keep track of the number of medical identity

A final but important and sobering thought:  the person who steals your medical identity might have a serious condition that you don’t.  But if your records are compromised and the thief’s history is co-mingled with yours, serious challenges and concerns can arise for you should there be an emergency and you’re unable to provide answers to important questions.  Doctors and emergency rooms accessing “your” records could find information that impacts the care you’re provided.    It’s your money so take it personally (TM)  but it’s your life and well-being, so be sure the information in your medical file is all about you.

Here’s to your health and wealth.

 A text message to me from a 40-year old female physician declared:  “See text below.  (The text she referred to read:  “Need $100 to cover me until the end of the month.  If you can’t do that, at least send enough for your nephew to get his hair cut for graduation this weekend.  Thanks.” )  Yet another demand from my sister that I give her money!  I can’t keep dealing with this.  It’s not right but I don’t know how to extricate myself.  Help!  Laura.” 

I followed up and spoke to Laura by phone.  She vented for about 10 minutes.  She told me that she regularly gave her sister money to buy food for herself and her two children; that she paid her mother’s car note and insurance premium; that she “had to come up with an immediate $600 last month” to cover the nursing home costs for her grandmother that were in arrears because her grandfather hadn’t kept up with payments which should have come from disability checks but used the money instead “for other things”.  Laura then returned to details about her sister and said while her sister makes $50,000 a year she is $40,000 in debt!  “What really upsets me,” Laura said angrily, “is that I feel guilty not giving her money when she asks for it!” 

Laura is a successful woman, a well-respected doctor, single and without children.  She asked that I help her get a mind over money matters mentality because her family just expected her to always cover expenses/needs/wants that they couldn’t.  “I’ve done well,” she told me again.  “I make a lot of money and I save it so that I can take care of myself.  My family reminds me of that each time there’s a money need in their lives that they want me to fill.  They’re not malicious about it – just unrelenting.  I can’t deal with this anymore!” 

The reality is Laura cannot afford to rescue everyone she loves.  The first suggestion I made is that she get clear about whether she was feeling guilt or obligation.  It was clearly the latter.  Because Laura is successful and her sister (by her own declaration) isn’t – Laura feels obligated to hand over money whenever her sister or other family member puts their hand out. 

Based on her sense of obligation which at least for now she feels she must fulfill, I made some basic, straightforward suggestions.  First and foremost, Laura should determine how much money a month she is going to budget/set aside for her family.  Determining the amount of this line item will help her feel more in control of the randomness with which she’s asked to provide money.  Have a serious conversation with her sister and insist on being given an accounting of anticipated monthly expenses and perhaps consider arranging direct payments for certain recurring bills for her sister (within the budget amount set aside for family) as well as for her grandmother’s nursing home care. 

The reality for Laura and others like her is that unless she establishes protocols and most importantly limits for family money requests – she will continue to be in the guilt game and paying the price.   I, of course, told her:  “Laura, It’s your money so take it personally ™.“   Laura says she understands the first step towards achieving this – begins with her.  Instead of getting angry about expected handouts she needs to get a plan and pay herself the compliment of being willing to help when she chooses without being made to feel guilty.  And her actions will underscore the importance of every member of the family who asks for her financial assistance – being expected to get educated about money skills and management as part of her requirements.   

Here’s to your health and wealth.

TAGS: financial planning, Women and Money

As a guest personal money expert for my former employer CNN and HLN – I answer questions on financial issues that come to the network’s Help Desk . 

Dave from Pennsylvania, a 30 year old professional who wants to go back to school to get an education degree wanted to know how to make that economically feasible. 

My suggestion – start in his own backyard with his current employer.  Check to see if his company will pay for his education in part or in full.  Many companies offer tuition reimbursement for course work.  I also recommend that he consider virtual universities.  They’re a way to accomplish his back to school goal without interrupting his day job and income. 

For 30-somethings like Dave – this third decade of life is an ideal time to seek the services of a good certified financial planner.  In your 30s, life is becoming clearer – and more complicated – as returning to school for an enhanced degree or getting married or starting a family or buying a home – are your reality. 

To further help Dave and anyone who’s trying to make a decision that involves managing their money – if you don’t have a budget, it’s important to make one.   A budget is  just a spending plan that will give you real numbers about your ability to pay for what you need or determine what you want to do.  

A budget pie of how much of income should go to various expenses suggests:

• Housing  30%
• Transportation  18%
• Food 14%
• Debt 10%
• Savings 10%
• Everything else 11% 

It’s your money so take it personally ™.  

Here’s to your health and wealth.

Last Tuesday night I attended a dinner hosted by the Atlantic Media Company in Washington, DC, to discuss the results of the brand new Allstate-National JournalHeartland Monitor Poll, which offers a look at the economic experience of the Millennial generation.

There were about 20 of us at the table, including representatives from government, think tanks, media outlets and labor unions.  The discussion was moderated by Ron Brownstein, who is not only a well-respected journalist and father of a Millennial, but, I learned, is also a fellow fan of Lost. (Yes, he was careful to end the dinner before Tuesday night’s episode.)

Here are some of my main takeaways from the discussion and the poll:

Job security is trendy. One of the more surprising findings of the poll is that 55% of Millennials say their goal is long-term employment with a single employer. And, when asked to rank their most important workplace priorities, job security was number one (with money a close number two). Personally, I believe this will change as the economy improves. I just don’t see Gen Y-ers sticking with traditional career paths with all of the options and portable benefits available in the new economy. In fact, many of the dinner attendees joked that they don’t even want to work for their current employers for the rest of their careers.

The current recession will have lasting effects. This is seriously concerning (and was also the topic ofBusinessWeek’s cover story, “The Lost Generation”). Recent research has shown that young people who graduate in recession years are at a disadvantage for a very long time. According to the National Journal, Yale economist Lisa Kahn has found that even at midcareer, people who graduated in tough economic times are more likely to work in low-pay, low-status positions. However, at the dinner we discussed a possible upside — that recession-era graduates might become more entrepreneurial given that they have little to lose by starting their own businesses.

Millennials believe in themselves. Despite the recession, the Allstate-National Journal Heartland Monitor Pollfound that 62% of Millennials believe that their own actions (more than events outside their control) are responsible for the their economic well-being. This reminds me of other research findings I hear often: that American students trail many other countries in academic achievement, but lead in one area: confidence. The question is: does reality match Millennials’ confidence? Hmm.

Parents’ basements are crowded. According to the poll, 52% of post-high school Millennials receive financial support from their parents to meet their daily needs, and one-third of 20-something Millennials live at home. This is not surprising, considering the average Gen Y-er carrying debt owes over $37,000, mostly in school loans.  What are the consequences of this debt? Here’s one: I spoke with a man from the National Association of Homebuilders who told me that in the future we’ll likely see more multigenerational households, which means more new houses will feature multiple master bedroom suites for the different generations.

Higher education is in trouble. As with most discussions about Millennials in the workplace, our conversation ended up on questions about education: Should everyone go to college? Does college adequately prepare young people for the real world? Is college loan debt worth it? One of the more disappointing findings of the poll is that 51% of Millennials believe they could perform their job responsibilities just as well without a college education. This may not be all that surprising given the fact that economists say the break-even point for a college education occurs around age 33. Of course, as one dinner guest pointed out, college is about more than job preparation. But should we be concerned that college doesn’t feel all that relevant to many young people? For more on this topic, I highly recommend the new book DIY U by Anya Kamenetz.

As with many good discussions, I left the dinner with more questions than answers. But it’s gratifying to know that many smart, thoughtful people are working on these big issues.

I’d love to hear your thoughts on all of these topics. Check out the Allstate-National Journal Heartland Monitor Polland the National Journal’s special report, and share your thoughts in the Comments section!

Note: This post originally appeared on the Lindsey Pollak Blog.

TAGS: Generation Y, Millennials, recession

Do you handle your money or does your money handle you? 

There are basic financial fundamentals that we all need to address every year.  It’s a New Year and time for all of us to get a financial grip! 

The timing couldn’t be better.    

Everybody’s still in that “clean slate” state of mind, right?  After all it is a new year.  But what I’m talking about aren’t resolutions.  These are doable, incremental, achievable money management goals that will alleviate a lot of your/our money anxieties.  And more importantly, your money mindset need only be:  once a month is all it takes.

If you agree to that simple stipulation, by year’s end, you’ll have done at least a dozen things to take care of your money and improve your money knowledge.  Have I peaked your interest?  Perfect. 

Here’s a calendar of suggestions for what to do financially each month this year.      

January:  Get your free annual credit reports.

• Only from the government mandated site https://www.annualcreditreport.com/.
• Read them, challenge in writing anything that’s incorrect or not yours.
• It’s important that you know what’s being said about you and your money.

February:  Organize your documents in preparation for doing your taxes.

• Use folders and label (Receipts 2010, insurance, investments, etc).
• Create a safe place to store the documents.
• Shred old or no longer needed documents.

March:  Review all your insurances.

• Life, health, disability, long-term care and casualty.
• http://moneycentral.msn.com/investor/calcs/n_life/main.asp has a calculator to help figure out how much insurance you need.

April:  Review all your debts.

• Credit cards, mortgages, auto loans, any long-term obligations.
• Check to see if rates and/or terms have changed.

May:  Review your will and update it.

• Especially if major life changes such as births, deaths, divorce, marriage, job loss or relocation.
• 66% of Americans do not have a will.
• If you have children and no will, the state will decide their guardianship if both parents are deceased.

June:  Find a certified financial planner.

• The National Association of Personal Financial Advisors http://www.napfa.org/.
• Be sure to know how they get paid (fee only, hourly, % of assets).

July:  Review employer matched savings programs.

• Make sure you’re contributing the % necessary to qualify.
• Check the diversity of your investment portfolio. 

August:  Determine your net worth.

• List the value of all your assets and possessions.
• List the amount of your liabilities and debt.
• Helps accurately determine the level of home/renters insurance you need.

September:  Go paperless with bills.

• Every account that’s paperless can be retrieved online 24 hours a day.
• Saves time and money – no stamps needed.
• Convert to online banking and bill paying.

October:  Create an automatic savings contribution.

• Easy to set up an automatic, recurring transfer with your bank to move money from checking to savings.
• The easiest money saved is money you never see.

November:  Check your retirement contribution.

• Set up contribution that coincides with your pay day.
• The best time to start saving for your retirement is in your 20s.

December:  Analyze your auto insurance coverage.

• Make sure you’re getting the best deal and are adequately covered.

Remember that mind over money matters.  If you want to jumpstart your financial education, make a decision to read the first paragraph of stories on the front page and Marketplace page of the Wall Street Journal, for example, and see how your interest and your money knowledge will grow.  It’s your money, so take it personally.

Here’s to your health and wealth!

TAGS: credit reports, Debt, finding a CPA, insurance, Monthly tips for managing your money, net worth, paperless bills, retirement contributions, wills

It was 6:01 PM, April 2^nd, 1968.  

Just about everyone remembers where they were when they heard the news.  Dr. Martin Luther King, Junior had been shot and killed – assassinated while standing on the balcony of the Lorraine Hotel in Memphis, Tennessee. 

I was a senior journalism student at San Jose State University in northern California.  I got the news as I walked back across campus from the J-School radio and television studios to my apartment. Only hours earlier, I had done two reports about Dr. King’s trip to Memphis to support the city garbage workers who were on strike.  I remember using video of the signs the strikers carried and wore that declared:  “I am a Man”.  Dr. King, the 39-year old man known as the prophet for racial justice in America had finished what was to be his last speech with the words: “I may not get there with you, but I want you to know tonight, that we as a people will get to the Promised Land.”  

The question now 42 years later is:  “When?” 

The Memphis garbage workers strike for economic security is widely remembered as when Dr. King began contesting financial privileges and organized a mass, multi-racial protest called the Poor People’s Campaign.  The campaign’s goal was to help poor people by uniting all races through their common hardship of financial desperation and provide a plan to start a solution. 

Dr. King’s solution was a $30-billion anti-poverty package called the “Economic Bill of Rights” asking the federal government to make helping poor Americans a priority.  The package included a commitment to full employment, a guaranteed annual income measure and more low-income housing.  It truly was Phase Two of the Civil Rights Movement.  Phase One had been exposing the problem/inequities of segregation.  Phase Two was going to be about the money.  It was going to focus on the inequities of money and the solution:  increasing earning power and financial self-reliance. 

That’s what Dr. King was doing in Memphis April 2^nd, 1968.   He was at the turning point of the civil rights movement. Despite efforts to continue after his death, the earnest proposition for creating jobs, income and housing as contained in the “Economic Bill of Rights” was never passed.  

The recession has emphasized that now 42 years after his death, on the eve of what would have been his 81^st birthday – Dr. King’s dream of racial and economic equality – remains unfinished business.  Needing jobs, healthcare and homes are still the concerns and sorrows today’s poor and newly poor are facing.  

Martin Luther King, Jr., was president of the Southern Leadership Conference.  He directed the 1963 March on Washington.  He received 5 honorary degrees.  He was Time Magazine’s “Man of the Year”.  He was the youngest recipient of the Noble Peace Prize.   He fought for equal rights for African Americans.  He fought for improving the lives of all poor.   He had an unfinished agenda:” The problem indicates that our emphasis must be two-fold. We must create full employment or we must create incomes. People must be made consumers by one method or the other.”  – Martin Luther King, Jr., from his book “Where Do We Go From Here: Chaos or  Community?”  http://nobelprize.org/nobel_prizes/peace/laureates/1964/king-bio.html

As the nation pauses to honor him on Monday, remember that he lived and died for his belief in the importance of social and economic power as the tools people needed to seek self-improvement.  Both were needed then – and now. 

Here’s to your health and wealth.

TAGS: economic civil rights movment, Jr., Martin Luther King

It’s no surprise that financial issues can cause depression.  But a new study by researchers at Ohio State University’s Comprehensive Cancer Center found that money-related stress had a stronger link to depression symptoms among breast cancer patients than even stress related to the recent death or illness of a loved one (http://researchnews.osu.edu/archive/depcanc.htm).

This study is important to me.  It has been 27 years since breast cancer claimed my Aunt Erleen – my mother’s eldest and only sister and yet I am still drawn to information/studies that address what other issues play into this disease and how we can better understand and support loved ones dealing with it.

My Aunt Erleen always did memorable things – like the time she strolled down the center aisle at my high school graduation so that she could be up close to snap the moment I received my diploma – and caught everyone on the dais like deer in the headlights from the blinding flashes of her camera and new fangled movie camera draped around her neck.

Or, the time she said she was ready to “have a California experience” – and declared since she’d never had a massage or been in a hot tub in her life – could I, her then-San Francisco resident niece – arrange it for her.  I did.  It was memorable.  It was memorable because the setting was so lovely.  It was memorable because my Mom, my young daughters and two of my best friends were part of Aunt Erleen’s California moment.

It was also memorable because that’s the night she told us she had breast cancer.  In the midst of this loving coven of women – young and old, blood ties and heart ties – my Aunt Erleen was, as usual, very clear.  “This,” she said, “is how we’re going to handle this.”

As the months passed and her condition worsened, Aunt Erleen’s resolve became our family’s culture.  Though she had relocated from Virginia and lived in southern California with my parents and grandmother, she would buy a plane ticket to come see me and my family in San Francisco, take it with her to her chemo treatment and – more often than not – get on the hour-long flight to northern California right after.

She said that ritual helped her “win a few battles with feeling unwell“.  How’s that for a memorable understatement?  She said that keeping her spirits up despite the cancer was best done in the company of pure love:  kids.  Mine. 

I rarely saw my Aunt Erleen depressed even though I know other worries played heavily on her mind.  But my Mom later told me that money matters and huge mounting medical bills were what most debilitated her sister’s stamina.  While the Ohio State University study cannot prove that money concerns are a cause of depression among breast cancer patients, researchers say the link suggests that financial difficulties appear to be related to higher levels of symptoms of depression.

At the National Breast Cancer Month website (http://www.nbcam.org/patient_questions_answers.cfm) – there’s extensive, good information provided to what are considered the most asked questions about this disease (including the fact that while breast cancer occurs primarily in women, men can also develop breast disease; and while male breast cancers tend to be smaller than female breast cancers when they are found, they have more often spread beyond the breast).

But the website’s first mention of financial information and breast cancer is listed as other risk factors and presented at the end of the Q&A:

• Q:  Will health insurance pay for screening mammograms?
  A: Regular screening mammograms are covered by the U.S. government’s Medicare and Medicaid programs and other private health insurance plans (women should check their own insurance plans for individual details). Free or low-cost mammograms are available for women without health insurance in many locations. For a program near you, contact the CDC at  (888) 842-6355 .
• Q: Will Medicare pay for screening mammograms?
  A: Yes. Medicare covers mammography screening every year for women age 40 and older who are Medicare recipients. Yet, eligible women and their doctors may not know about this important benefit. A series of publications regarding this benefit are available in English and Spanish. For more information about Medicare coverage, contact the Medicare toll-free hotline at (800) MEDICARE or the Medicare Web site, www.medicare.gov.
• Q: How can women get low-cost or free mammograms?
  A: For information on low- or no cost mammography screening, contact the Centers for Disease Control and Prevention (CDC) at  (888) 842-6355  or visit their Web site at www.cdc.gov. Women seeking mammograms at a reduced rate are urged to make their appointment early in the year, as space may be limited. To find a breast-imaging facility, contact the National Cancer Institute at (800) 4-CANCER.

Perhaps the Ohio State University study will help move the correlation between breast cancer, money-related stress and depression to a bit of a higher profile.

Here’s to your health and wealth.

TAGS: Breast cancer, depression, money-related concerns, Ohio State University study, stress