MoneyMinding Monitor

For MoneyMinding Members you can follow along and ask questions and comment on the informaiton, stories, and concepts presented to help you identify potentially misleading or potentially catastrophic financial advice - and most importantly to be able to differentiate the good ones from the not-so-good ones.

You can login to mVillage at www.moneyminding.com to read them all, or become a Minute Manager Member to get your access. http://www.moneyminding.com/mm/store_courses.php

Just Pay More

… If nothing else, round your payments up, recommends Tracy Piercy, CFP and CEO of MoneyMinding.com. She says that when people have a payment for $644, they think of it as $650. Why not just pay $650, then? An extra $6 a month on a $200,000, 30-year loan can save you four payments at the end of the mortgage loan. …

When you pay extra, make sure the extra is applied to the principal balance, not just set aside for the next payment. And before you make extra payments, read your contract and make sure you won’t have to pay prepayment penalties.

Refinance With a Shorter-Term Mortgage

… To get the effect of a shorter-term mortgage without the risk, take out a 30-year loan, but make payments as if you had a 10- or 15-year loan. “You just make increased payments. You’re in control, not the bank,” Piercy says. …

Use Money Merge Accounts (The Australian Method)

…  there’s no magic formula for shifting your money around. “You don’t need software to do that,” Piercy says.

The biggest downside to the money merge plan is that it requires discipline. “You wouldn’t do it unless you understood cash management,” Piercy says.

Fox News
By Sally Herigstad
Published March 28, 2011
see the whole article here

A recent article titled Financial Literacy Key to Prosperity posted on advisor.ca by Vikram Barhat on November 16, 2010, shared some quotes worth sharing as they support the message we have been delivering for years – and, in fact, are the reason for the MoneyMinding Methodology, programs and business that has been developing since 1997.

“Financial literacy…could have a measurable impact on the economic output of Canada, said Donald Stewart, CEO, Sun Life Financial, speaking at the Distinguished Advisor Conference (DAC) 2010 in Orlando, Florida.”

“Stewart urged financial advisors to make financial education “more engaging” to ensure “the country understands, pursues and is receptive to the financial literacy lessons.”  (Sounds like the Minute Manager with mVillage to me).

“While stressing that financial literacy has to start at “the school level from coast to coast,” he asked advisors to lead from the front,  “Financial life is characterized by complexity and change and the role that you play in advising individuals is a very critical responsibility.” He admitted, though, that an advisor’s job is difficult and challenging, as it takes place in an environment of intensifying regulations and greater complexity.”  (That’s why MoneyMinding provides the expertise and third party service so this function can be hands off for the advisor who will be there to support the education, and to not divert their attention from the importance of delivering and maintaining the products and services necessary to fulfill on the financial plans for their clients).

“Stewart particularly encouraged leveraging financial literacy in the family as a way to instill better financial skills in the next generation. Children imitate actions and behavior of their parents and “parents who demonstrate poor financial habits” are passing them on to their children, he said.

“Parents need to acquire the skills and knowledge that their children will acquire so that they can reinforce what should become a lifelong learning process,” said Stewart. “If you improve the financial life of a parent you’d be making a key difference to the children and so ultimately to all of our futures.”  (We’ve been supporting families, spouses, and whole generations with financial literacy for years – congratulations to those MoneyMinding Members who have recognized this and have taken action for positive change).

“One of the highlights of the assessment of the current state of financial literacy around the world is the importance of behavioral economics. “People behave in financial situations in a way that isn’t entirely economically rational,” said Stewart.  (Hallelujah – it’s not just about knowledge it’s the emotional confidence to make positive personal financial choices – hence, the MoneyMinding Methodology integrating financial literacy and behavioral finance).

“As elsewhere, Canadian financial landscape is changing and advisors need to keep up with it. “There is a big responsibility that goes with all this change, because if you don’t [participate] then you contribute to naysayers who don’t agree that financial advisors are making a huge difference to the lives of Canadians.”  (Again, I say thank you to the MoneyMinding Marketing Partners and Mentors who are part of the solution and not contributing to the problem!!)

“Economies are increasingly becoming synchronized as globalization continues to shrink the world. Now more than ever, advisors need to keep an eye on the highly linked events of today’s world. Stewart drew attention to the economic development of India and China to illustrate how changes in one part of the world can reverberate far and wide. “Keep aware of what is going on in these two major emerging economies, because it’s not something that we are unconnected from.” (And, globalization is one reason why MoneyMinding is universal in its content and not connected in any way to any country or geographical area.  The goal is to help strengthen the communication between advisors and clients with the financial literacy and behavioral finance programs). 

Recently, an article was published for financial professionals that presents some of what we have been saying for years. Here are my comments on some of the quotes from the article:

Early financial education helps make the distinction between learning a life skill and what should be left to the professionals. This is such a key quote because adults today have not formally been taught finance. They think they can, and should, do it themselves, which also devalues professional advice.

“Part of the problem is [that] the educators don’t necessarily have the skill set to be able to teach financial literacy in the way we are talking about.”

Financial knowledge needs to go beyond product knowledge to include fundamentals of financial planning, an area where the financial community can assist by providing teachers [with] professional learning opportunities and resources.

There’s a significant role for the planning community to play in “promoting learning opportunities through professional associations and federations for educators to enhance their financial knowledge and skills”. This is part of the niche MoneyMinding fills by providing tools and information to both the industry and their clients.

The push from the financial planning community serves a dual purpose: it brings people to advisors. “The majority of people who don’t go to advisors… don’t know what they don’t know.” Hey, this has been my line for years!

See the full article here

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Literacy [lit-er-uh-see] –noun
1. the quality or state of being literate, esp. the ability to read and write
2. possession of education
3. a person’s knowledge of a particular subject or field
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Today is International Literacy Day. What better time to remind everyone that “literacy” isn’t just about reading and writing. Actually, if you look at the definition above, you will see the expanse of the meaning.

I’m sure that you are starting to see more and more references to “Financial Literacy”. Yes, indeed, the possession of financial education including numeracy and knowledge about money. Of course the ability to read and write will assist people with the acquisition of wealth and assets, but to really be successful, you need financial literacy too: it helps people learn to manage and grow assets and provide for a sustainable future.

Did you know that people are as afraid of others finding out about their limited financial skills as they are of people finding out they can’t read or write? Makes sense, doesn’t it?!

MoneyMinding can help… start by accessing the free information and resources offered on the website http://moneyminding.com.

Then check out the Minute Manager, it looks at every area of personal finance delivered in an easy to understand, practical format that helps people make decisions that support wealth creation and lifetime financial security…

Check it out today… and, please, pass it on – everyone needs to know this stuff!!

Interest rates, prime rates, overnight rates, bank rates, mortgage rates, deposit rates, basis points, etc.  I wonder how many people really know the difference and impact of these various rates and terminology. They seem to be tossed around in the media and in financial newsletters regularly and they are all important. But, when you listen to the way people discuss rates and the impact they have on their life, there certainly seems to be a gap between rate language and understanding.

But does it matter for day-to-day financial decision making?

The answer is yes, but…

Many people have decided they would rather not deal with money issues because they find it complicated or intimidating. Without a foundation of knowledge, it certainly is both of those. There are so many factors that affect every area of our money that the important thing is to recognize that you can take charge, learn what you know (and don’t know) and what’s important to you so you can ask better questions to make better decisions. 

With respect to the types of rates that are tossed around in daily discussions of interest rates, the important thing is to recognize the term, listen to the context in which it is being used and ask some questions or do some simple web research to find out what the term means. And, most importantly, what does it mean (if anything) to you and your situation and your goals. 

I live in Canada, and the overnight rate just increased. This in turn caused the bank prime rate to increase as well as mortgage rates and deposit rates. Now, if you don’t understand why this happened or what the impact is in the big picture, or if you don’t follow it and keep track of the ups and downs on a regular basis, then you could be on the side of the equation that says, “They’re just out to get me with higher interest rates. The banks make so much money already they don’t need to keep charging the everyday person more interest.”  Or, you could be on the flip side saying, “Great, it’s about time they recognized that those of us on fixed income can’t live with such low interest rates on our savings.”

Either one of these isn’t empowering, abundant, confident or knowledge based assumptions / opinions. The fact is that federal governments are constantly doing a balancing act to maintain stability in the economy so we have a positive economic environment for business and investment at home and abroad.  When we have a positive and stable business and investment environment, it benefits everyone: employed, retired, young, and old. And, the more you know about the terms, the concepts, the application, and the implications, the better off you will be. That is because you become more confident and will have gained the knowledge to understand the impact to you for the decisions you make on a day-to-day basis. 

If you would like to know how, where or who to ask to learn more about the impact of the various types of rates we hear about daily, then consider asking your questions and following the dialogue as a MoneyMinding Minute Manager Member.  If you are already a member you can log in here

If you would like to join now, you can find our more and get your password and exclusive member benefits here.

WOW
That tip today blew me out of the water. I have been in declutter mode for 2 months now. In fact, I am in reality burnt out from the clutter in my life. So receiving this was very supportive as I step back and purge.

Thank you, Moira

Victoria, BC – MoneyMinding Inc. today announced that Tracy Piercy, Chief Executive Officer, has been invited to participate and present a Brief before the Federal Task Force on Financial Literacy on April 6, 2010 in Vancouver, BC. 

Ms. Piercy has specialized in financial literacy for 12 of her 20 years working in the financial industry.  She is also an expert on the behavioral aspects of money decisions and commented that “one of the big challenges facing the task force is that most consumers don’t know what they don’t know when it comes to financial literacy, and often are not able to spend the time or money to access this education the way it is currently presented. MoneyMinding offers solutions to these obstacles by providing convenient, bite-sized financial education in a format that allows the consumer to access and learn at their own pace and comfort.”

MoneyMinding specializes in providing innovative, “outside of the box” delivery of independent, practical financial education to the financial industry, corporations and consumers throughout North America and overseas. Training is delivered through courses and materials, primarily in an online environment. The star of the Company is the Minute Manager Service, which provides pertinent financial information that is applicable to the consumer’s daily life; relevant information that they can connect with every time they pull out their wallet to make a purchase or make any kind of financial decision. 

MoneyMinding is pleased to be a part of this event and present ideas for the Canadian Government’s consideration on how to best provide financial education to a broad spectrum of people - young, old, rich and poor - in a variety of venues, including schools, employers, financial institutions and governments. 

Any tips on how to pay off your back taxes before the new ones come in? I already work 2 jobs and I don’t buy lattés. It’s discouraging… it seems to need to have money to save money. How do I get there? How do I pay off what I already owe so that I can start saving and investing, and paying for my son’s braces (!) especially when my spouse works sporadically and I am never sure how much money we’re going to have every month.

It’s pretty hard not to get bummed sometimes. I do like your newsletter, though. It’s ten times better than the Smart Cookies.

JM

An update…..since the MoneyMinding call last month on living with residual income I am in the process of purchasing a townhouse.  Just awaiting the appraisal now, and should that all be good, we will be putting the final touches on everything.   So thank you for your continued interest in my financial well being……my first investment property almost under my belt!   And….I will be looking for my second one.  THANK-YOU!!!!

Bev