A Penny Saved

Education verses legislation! In an article in U.S. News and World Report, a debate was discussed on whether Americans need more financial education or a simpler, more regulated financial system. On the one hand, studies were cited that showed that high school seniors flunk a financial literacy test on practical money questions. In addition, other studies were cited that showed average americans are pretty much clueless regarding basic money matters like interest rates, inflation, and even retirement savings. This points to more education needed.

On the other hand, studies were shown that showed that even if people were exposed to personal finance training, they didn’t do any better in managing their money - in fact one study showed that there was no significant change in behavior five years after taking a money management course. On this side of the debate the conclusion is that financial markets are too complex, and that the financial industry needs reform, including government regulation.

So which is it?

Personnaly, I think both are right, and I will add a third alternative:

1. People do need training. The financial world is complex. I think schools should be teaching  basic finances throughout Junior High and Senior High. I know when I was in High School we had one course (not enough I believe); they taught us how to balance a checkbook, stock market basics, how to set up a budget. I think that and more should be taught (saving for retirement, etc.).
2. The financial markets are complex. As far as regulation, I like free markets and I am leery about over regulation. However, I think better disclosure, both verbal and in understandable writing would benefit everyone. You shouldn’t have to read the fine print to know the details. Clear, precise, and easy understood terms would go a long way.
3. No matter how hard we try, whether we educate or legislate, bad habits are hard to break, and some people will fail regardless of what others do to help them. Sometimes we need to learn the hard way. I want to avoid a nanny state where we are protected from everything. Allow people to experience consequences from bad decisions. Do steps one and two, but let people succeed, and allow us to fail.

So what do you think?

As the commercial says, there are some things money can’t buy- and a Mother’s love is definitely one of them. A few quotes for this special day:

• Youth fades; love droops; the leaves of friendship fall - A mother’s secret love outlives them all.  Oliver Wendell Holmes (1809–1894)
• No man is poor who has had a godly mother.  Abraham Lincoln (1809–1865)
• When God thought of mother, he must have laughed with satisfaction and framed it quickly–so rich, so deep, so divine, so full of soul, power, and beauty was the conception.  Henry Ward Beecher (1813–1887)
• The phrase “working mother” is redundant.  ~Jane Sellman

 I hope you have a wonderful day.

Bad news seems to be all around us. Everywhere you turn, someone is letting us know how terrible things are right now - inflation, housing markets, stocks, the dollar, etc. It can really be depressing.

It is during times like these that we need to keep a positive attitude. Things may be tough, but not as dire as the media portrays it. Their job is to sell - and bad news sells. But we do not have to buy into it. Even if things are rough for us personally, it is still important to keep our heads up and keep seeking our goals.

I am not saying it will be easy, that everything is rosey. It’s not. Life can be hard, and anyone who tells you different is trying to sell you something (I believe I first heard this from the movie Princess Bride!). But we need to carry on, keep trying, and having a positive attitutde goes a long way in helping us accomplish our dreams. As for me, it also helps to remember that “I can do all things through Him who strengthens me” (Bible, Philippians 4:13).

Have a positively great day today!

I was reading an opinion piece by Marty Nemko in The Chronicle of Higher Education where he calls a bachelor’s degree America’s most overrated product. In the article are several astounding statistics:

• 40% of freshman at four-year colleges do not graduate in six years
• Percentage of class time spent in classes of fewer than 30 students - only 28%
• 50% of college seniors scored below proficient levels on a test that required them to do such basic tasks as understand the arguments of newspaper editorials or compare credit-card offers.
• 20% of college seniors had only basic quantitative skills.
• literacy among college graduates has declined over the past decade
• employers report that new graduates they hire are not prepared to work, lacking critical thinking, writing, and problem-solving skills

The author states colleges like to claim that college graduates earn more than nongraduates-but that he feels that this is terribly misleading. He states that “you could lock the collegebound in a closet for four years, and they’s still go on to earn more than the pool of non-collegebound–they’re brighter, more motivated, and have better family connections.”

Wow! That is a pretty harsh critique of our higher educational system. He goes on to say that colleges are businesses, but that their business is not teaching students, it is getting reasearch. Teaching students is a cost item while research is a profit center.

 As a parent of possibly 3 future college students, do I / the girls really want to invest in this? Would my children be better off investing in stocks rather than in a college education?

I guess college, like any other investment, will take a lot of research and investigation to get a good “return on investment.”

We need to keep our word. If we say we will do something, we need to do it. This is especially true in finances. A vow can be defined as a promise, a pledge, or a personal commitment. It can be verbal or it can be written (like a contract). When we make a vow to pay someone back for a loan - whether a relative, friend, or a financial institution, we need to keep that commitment.

It saddens me to read about people just walking away from their obligations, without giving a thought about how it impacts their reputation or character. “It is better that you should not vow than that you should vow and not pay” (Bible, Ecclesiastes 5:5).

There are consequences to our breaking of vows or pledges, and it runs deeper than just our pocketbooks. It impacts our character, and our reputation - something worth much more than silver or gold.

It is easy to get tempted to cut corners ethically when we face financial challenges. But we should never allow ourselves to be trapped into anything that is unethical, immoral, or dishonest, no matter how inviting it seems. “Such will be my wages. So my honesty will answer for me later, when you come concerning my wages.” (Bible, Genesis 30:32)

There are no small lies and no small thefts–there are only lies and only thefts.

In the short run cutting corners may seem to benefit. But in the long run integrity is what pays.

Death and Taxes are inevitable. (Thomas Chandler Haliburton–1796-1865)

While most people today are fixated on the latter (it being April 15th), I have been involved in the former. The church is preparing for a funeral tomorrow; I had an older lady and her son in my office earlier grieving - her husband of many years will probably pass away within the next 24 hours;  I just received a report about my good friend who was having surgery today - he had a heart attack while having the surgery (the doctors are consulting with his wife now).

I hope you have prepared for your taxes this year. More importantly, I hope you are prepared for when life ends:

• That all your important personal relationships are good and you have no unresolved issues (as far as you are able)
• That you have a will, and your final wishes laid out (funeral plans, burying spot, etc.)
• That you have no regrets
• That you enjoy life now

My position as a pastor brings me face to face with death on a regular basis. I guess it is ironic that on a national tax day my day has been so focused on death. And yet it is a good reminder to keep things in the right perspective.

I hope your day has been good. Keep the faith.

We all need help. None of us knows everything about everything. “A wise man will hear and increase in learning, and a man of understanding will acquire wise counsel” (Bible, Proverbs 1:5). Some of the smartest and most respected individuals I know seek the help and knowledge of others.

This is true in all areas of our life, even in finances. Whether it is through blogs, books, friends, etc., it is good to keep learning and growing - and to share that knowledge with others.

So, I would like to give a big thanks to all those who have helped me along the way, including the readers and commentors of  A Penny Saved - THANKS!

Contentment is hard. It’s easy to want what someone else has, to want the “latest”. We just seem to always want just a little bit more. In my lifetime, I have seen the progression, especially in areas of technology. For instance:

• First, it was black and white TV’s with rabbit ears
• Then came color TV’s
• Then came remote controlled color TV’s
• Then came large screen TV’s
• Then came cable, then satellite
• Then came surround sound, Dolby, etc. TV’s
• Then came flatscreen TV’s
• Then came digital
• Then came….

I’m sure I am missing a few things, but I think you get the “picture”. Would any of us be content with a black & white TV with rabbit ears today? I remember reading somewhere (I think it was an MSNBC article) about going on a 1970’s budget as a way to save money - no cable, no cell phone, no home computer, etc. Funny how we (at least those of us old enough to remember) made it through without those things but now they are necessaties.

Now, I like these things and they are helpful (as well as dishwaters, air conditioning, and other things I didn’t have growing up!). But it is easy to slip out of contentment.  And when we do, and we desire more riches (or stuff), it can become a snare which can plunge us into ruin and destruction (i.e., credit card debt, house foreclosures, etc.).

We brought nothing into this world, and we will take nothing out (Bible, 1 TImothy 6:7). But in between we sure like to collect and keep up. So be content with where you are - not complacent or lazy. But content and hard working.

Have a great and contented day!

In honor of April Fool’s Day, I thought I would share an appropriate story…

A dog was walking home with his prized dinner, a large piece of meat, in his mouth. On his way home, he walked by a river. Looking in the river, he saw another dog with a wonderful chunk of meat in his mouth.

     ”I want that meat, too,” thought the dog, and he snapped at the dog to grab his meat which caused him to drop his dinner in the river.

The moral of the story: “It is very foolish to be greedy.”

Have a Happy, but Wise, April Fools Day!