fin literacy, Fin Literacy

Fin Literacy


Oliver Wendell Holmes,Jr
US Supreme Court Justice (1902-1930)

Financial Literacy

What are we teaching our children about finances?

Financial Literacy is all about having the skills and knowledge to make informed decisions to manage one’s personal finances, such as value of money, borrowing and investing.

Countries such as Australia, Canada, Japan, the United States and the United Kingdom have taken the initiative to empower its people through financial literacy training programs, so that people can improve their financial decisions and better manage their money.

The Organization for Economic Co-operation and Development (OECD) launched an international project, the International Gateway for Financial Education was set up in 2008, to establish standards in financial education programs, informative materials, research database and statistics worldwide.

In 2003 the United States set up the Financial Literacy and Education Commission. US Government Financial Literacy Website for educational resources, information, fun facts and games about money and saving.

Fin Literacy Basics

Fin Terminology

Financial Education Concepts

50-30-20 Rule

The 50-20-30 Rule is less restrictive towards your lifestyle needs and wants.
Fin Literacy

Three budget categories

  1. Living expenses (50%) which include your essential needs mortgage/ rent, utilities, transportation, food, Health Insurance
  2. Discretionary Spending (30%) which include your wants – Entertainment, Restaurant and Cafes, Hobbies, Travel
  3. Savings and Investments (20%) which include Emergency Fund, Retirement Accounts, Paying Debt Down.

The Rule of 72

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The Rule of 72 is a formula to give a quick estimation of the number of years it takes to double your money investment at a fixed annual interest rate.

The Rule of 72 can work for you such as in savings accounts and investments or against you such as in student loans, car loans, mortgage or credit card debt.

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Time Value of Money (TMV) Concept

Fin Literacy

The Time Value of Money (TVM) Concept is an important and fundamental financial principle to keep in mind. Money has Time Value. Simply stated, Money in your hand now is worth more today than Money that is expected to be received in the future. In this way Money you receive now (Present Value) has the more earning potential for you by investing sooner and letting it grow with compounding interest (Future Value) – Time is on your side. However, keep in mind, with Credit Card Debt, the Time Value of Money is extremely higher than an individual investors’ rate of return on investments – Time is not on your side.

Fin Calculators

Fin LiteracyFin LiteracyFinancial Calculators are useful first-step, self-help tools to help you become aware of your Financial Situation and assist you in designing a Financial Plan and set up Financial Goals for successful Family Money Management.

Fin LiteracyFinancial Calculators are not considered investment advice, please consult with your tax account and financial investment advisors.

For your best experience click here

Fin Manage

Portfolio Management

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Fin Literacy

Portfolio Management is the decision-making process in diversification of assets and risk management in your investment portfolio. It requires monitoring periodically and adjusting your Portfolio for optimum returns on original investments.

Important Considerations include

  • your risk tolerance
  • your investment goals
  • your economic circumstances
  • your outlook for the future.

Understanding Portfolio Management enables you

  • To maximize consistent investment performance
  • To minimize loss of principal investment dollars
  • To optimize favorable tax status
  • To gain flexibility/ adaptability
  • To continue the future growth potential of your Portfolio.
  • Passive Portfolio Management refers to not spending time/automating the management of the portfolio (such as a fixed portfolio matching the market index and/or receiving dividends from stocks)
  • Active Portfolio Management refers to active involvement of buy /sell transactions for securities (for example stock shares).

Fin Literacy

The Modern Portfolio Theory = Diversification of Portfolio

Harry Markowitz received the Nobel Prize for Economics in 1990 for his idea in 1952 for The Modern Portfolio Theory.

He believed that investors should select the lowest-risk allocation for their portfolios to receive the maximum- expected- targeted- returns, for any given risk level of your portfolio.

The Modern Portfolio Theory:

  • Maximizes your returns while minimizing the risks of your portfolio.
  • Each individual asset class by itself may be volatile, but inside a diversified portfolio, the volatility may be quite low, since it limits the overall risk. An example of a diversified portfolio would be to have a percentage Bonds and Commodities to counteract the more volatile Stocks.
  • Many Financial Experts believe The Modern Portfolio Theory is relevant today for long-term investors to achieve their financial returns in building the retirement nest egg.
  • Also, Robo Advisors incorporate certain aspects of The Modern Portfolio Theory in their allocation strategies.

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According to Ray Dalio, Billionaire hedge fund manager and founder of Bridgewater Associates, (January 21, 2020) in an interview with CNBC Squawk Box said, “CASH IS TRASH.” He believes that investors are missing out on opportunities in stock market investing, as well as a good idea have some gold (5-10% of portfolio) for globally diversified balanced portfolio. With Low Saving Bank Interest Rates, Inflation, a shift towards Negative Yielding Bonds and Larger Federal Deficits –the value of cash in your hand now will have less value and decreased store holder of wealth in the future. As for Bitcoin, his comments highlighted the risk of investing in Bitcoin, since he feels that it is neither a store of value nor a medium of exchange because of its volatility.


According to the motto of Dave Ramsey, Personal Finance Guru, DEBT IS DUMB, CASH IS KING. From a personal finance perspective, he recommends healthy financial spending habits away from credit cards since they have high interest rates especially with trailing monthly balances. Cash is convenient, increases awareness in monthly budget, limits spending behavior, and has an obvious identity safe feature from data breaches unlike credit cards. Having SOME CASH in an emergency savings account helps to ride the waves of unexpected financial expenses and avoid Debt.

  • Cyclical Stocks (Offensive Stocks) are the stocks where the company’s performance and price are closely related to the business/economic cycles/ macroeconomic changes – high economy confidence, spending (stock share price up) and low economy sentiment, recession (stock share price down). Examples of businesses -include a variety of industries such as housing, industrials, equipment, air travel/vacation services, consumer discretionary as well as commodity businesses.
  • Non-Cyclical Stocks (Defensive Stocks) on the other hand, do not necessarily move in relation with the economy/ business cycle. Historically, defensive stocks have been safer investments but provide lower returns even in economic downturns. Many of these businesses pay safe growing dividends and should make up a portion of your portfolio. For example, Companies that are essential for everyday needs that people purchase even when an economy slows down, such as food staples, soap detergents, diapers, utilities and tobacco.

Staying invested in a downturn can prevent permanent loss.Fin Literacy
Sell higher than you bought it at NOT SELLING control of emotions during the recession to preserve your wealth because selling realizes your losses
Buying company that loses their value, that cannot be recovered during a recession or a retraction in their business, or investing in a business with declining revenue during a recession, sometimes your choices were mistaken but the losses can be prevented somewhat if you diversifying your holdings to l counteract this “falling knife” stock.

1. Think of your portfolio and how it will manage during a recession
2. Find diversified businesses with healthy balance sheet companies
3. Strategy of dollar cost averaging into your portfolio as the stock market goes down in small amounts, not all at once, helps to improve the long term future gains of your portfolio.

Fin Family

Having a Family can be exciting yet overwhelming!Fin Literacy

Nonetheless, Family Financial Management is crucial

in order to see the Big Family Picture and to make

personal financial decisions together for Your Family’s Future.

Fin Literacy

  1. DISCUSS and set short-term and long-term financial GOALS with your spouse.
  2. TRACK your spending. With COMPROMISE make a BUDGET for expenses,
  3. PRIORITIZE which when you will pay bills and GET RID of DEBT.
  4. REMEMBER to PAY YOURSELF FIRST– a percentage of your monthly income to go towards SAVINGS.
  5. PLAN for that Rainy Day- Set up a separate savings/ money market account, EMERGENCY FUND, which can be available for short term unexpected needs.
  6. TEACH and ENCOURAGE OPEN DISCUSSION with your children, so as to build a FOUNDATION for POSITIVE MONEY VALUES and SMART financial decisions for a successful FUTURE.
  7. THINK EARLY about the FUTURE by investing towards your RETIREMENT and your CHILDREN’S EDUCATION (UNDERSTAND your JOB’S BENEFIT package).
  8.  AUTOMATE Bill Pay and Savings.
  9. RESEARCH about a LIFE INSURANCE POLICY to give you peace of mind in case of tragedy and ask your employer regarding HEALTH PLAN COVERAGES.

Fin Literacy

A Man is Not a Financial Plan

Kim & Robert Kiyosaki

These Financial Tips are really for everyone, but real effort and support for women financial education has been emphasized. Fin Literacy

  1. Rely on Yourself– Financial Independence
  2. Set your Financial Goals and Budget
  3. Control Emotional Shopping Sprees
  4. Spend Less than you Earn
  5. Read Everything Finance and Get Educated
  6. Build an Emergency Rainy Day Fund
  7. Discuss and Manage Day-to Day Expences
  8. Don’t Forget about Your Retirement Future -Ask Your Employer
Before they set out into the world on an adventure, off to an out-of-state college, or their new dream job, arm your teenager with proper attitude in money matters and personal finance.Fin Literacy
  1. Organize their finances- set up Bank Accounts with Debit Cards and a separate Savings Account for future goals.
  2. Teach them to be smart about Credit Cards, Car Financing and Insurance.
  3. Encourage your teenager to be charge of their finances and think before purchases (even sleep on it!).
  4. Discuss the costs of financing Higher Education and Student Loan Debt.
  5. Plant a thought about their future Long-term Goals and Retirement.

Fin Literacy

Fin LiteracyFin Literacy

The average cost to raise a child is about $10000- $23,000 per year, depending on the age of the child and the family’s income level.
Fin Literacy

According to USDA (January 2017) Report on Expenditures on Children by Families, the estimated expense to raise a child from birth through age 17 is $233,610.

To begin planning for the arrival of your baby, financial experts recommend:

Saving 6 months worth of living expenses to cover any unpaid time from work.

-Get  your budget under control

Plan for higher costs (food,clothing, childcare) and new expenses

-Set up a health saving account and look into medical coverage family plans

Money Apps to Build Healthy Financial Skills with Your Family 

Updated April 16, 2020

Fin Literacy

FamZoo Fee $5.99 per month, $25.99 semi-annually

$59.99 for 24 months after Free trial 2 months for IOU accounts and 1 month for Prepaid Card AccountsAn award-winning app (Finovate Award 2011and 2013, FinCon 2015 Judge’s and People Choice Awards), parental controls, instant money transfers, manage chore schedules with rewards or penalties, automate transfers, set goals with different accounts (envelope budgeting) “financial time-out” lock/unlock card, text message for requests and approvals, set saving interest rate, Prepaid card account or IOU accounts, chart savings progress, track money loans to kids, automate debit from shared family expenses such as cell phone data plans.
Check it out
Fin Literacy

Stockpile Fees $0.99/ trade, minimum deposit to open $0

Promotion from Stockpile Get $5 free stock gift when sign up as new user and if you have not already redeemed gift. If you already have an account disregard sign up and choose login when you click on the link provided if you have not already redeemed stock gift.Offer Custodial Accounts for children, invest in stock, bond and ETFs, buy fractional shares, gift cards, dividend reinvest program, automatic deposit, buy with credit card, debit card or linked checking account, mini lessons in investing, upload your photo, individual passcodes possible. 
Check it out
Fin Literacy

Homey Fee $4.99 per month, $49.99 per year

Manage chores, allowance and rewards, unlimited family members, unlimited jars for budgeting, up to 5 connected bank accounts to directly transfer money to your child’s account, reminders for chores, take photos to remind them of undone chores with deadlines, syncs devices. 
Check it out
Fin Literacy

Rooster Money Fees $2.49 per month, $18.99 per year.

Manages allowance, chore and reward chart, tracks savings, set up interest rate, create goals, Give pot for donations, automate allowance, pretend currency star money rewards, take pictures of things children want to buy.
Check it out
Fin Literacy

Chore Check Fee $9.00 per month after Free 1month trial

Manage quality of complete chore tasks with approval or not, rewards for chores whoever does it first (“stealable chores”), track allowance, separate money into categories Spend, Save and Give, Prepaid Debit Mastercard.
Check it out
Fin Literacy

PiggyBot Fee $0

An award-winning (2014 Appy Award) app from CNB Bank and Kasasa, parental account monitoring, set goals, chores and IOUs with virtual piggy bank, track allowances, upload pictures of things the children want to purchase.
Check it out
Fin Literacy

GreenLight Fee $4.99/month, up to five children after 1month free trial period.

Flexible parental controls, offers debit card with choice of  photo, automated allowance, instant money transfers, parents choose where the children can spend, parents can manage chore schedule, real-time spending alerts.  
Check it out
Fin Literacy

Wingboat Fee Premium $2.99 per month, $15.99 semi-annually, $19.99 per year.

Manage and schedule children’s allowance, chores and punishments (not approve future allowance payments), reminders, automatically syncs data, automatic payments, savings growth chart, pretend currencies, rewards for good behavior, unlimited amount of children, each with their own passcode.
Check it out

Saving Plans for College

(“qualified tuition plans”) is a tax-deferred growth free with tax-free withdrawals when this savings plan is used for qualified educational expenses. This plan is authorized in Section 529 of the Internal Revenue Service (IRS) code and are sponsored by states, state agencies or educational institutions.

Find out more


is a savings account for your child under age 18 to pay for qualified educational expenses. You can invest like the 529 plan in a variety of stocks, bonds or other assets and grows tax-free, BUT your CONTRIBUTIONS are NOT TAX-DEDUCTIBLE and only available for certain income limit (modified adjusted gross income $110,000 individual/$220,000 married couple filing jointly). Yearly contribution limit $2,000 per beneficiary. Your child withdraws funds or educational expenses without paying taxes on it.

Find out more

Uniform Transfer to Minors Act/ Uniform Gift to Minors Act are accounts that are opened on behalf of the beneficiary under age 18 and all assets will be transferred to the minor depending on the state at age 18 or 21 for UGMA and up to 25 years for UTMA. These funds can be used for anything (flexible). You can make unlimited contributions (2019 kiddie tax may be avoided – with 2019 standard deduction for dependent child with only investment income is $1,100).

Find out more

Organize Your Finance with Budget and Saving Apps

Retirement Investment Plans

  • Plan Set up in 1997, Individual retirement account to set aside after-tax income each year.
  • Withdrawals after 59 ½ are tax-free
  • Year 2020 Contributions amount depends on your income and filing status.
    • Total contributions to Traditional and Roth IRAs cannot be no more than $6,000 (less than age 50)
    • For age 50 or older, contributions up to $7,000 (Catch-up Contribution)
    • Deadline for contribution Up to April 15 tax filing deadline of the following year.
    • Or no more that your taxable compensation for the year if it was less than this amount.
  • You can contribution as long as you have earned income from a job or business. No age limit
  • Additional Resource Website from (Roth IRA)
  • Individual retirement account with tax deductible contributions. The deduction may be fully or partially deductible depending on your circumstances.
  • Earning and gains are not taxed until distributed. (Tax Free / Tax Deferred Growth)
  • Withdrawals are taxed as ordinary income.
  • You can contribute to this Plan if you have taxable income and are under the age of 70 ½. After age 70 ½, regardless if you are working you can no longer contribute regardless if you still are still working.
  • Year 2020 Contributions amount depends on your income and filing status.
    • Total contributions to Traditional and Roth IRAs cannot be no more than $6,000 (less than age 50)
    • For age 50 or older, contributions up to $7,000 (Catch-up Contribution)
    • Or no more that your taxable compensation for the year if it was less than this amount.
  • Deadline for contribution Up to April 15 tax filing deadline of the following year.
  • Additional Resource Website from (Traditional IRA)
  • Individual Retirement Account that is tax-deductible contributions. It is set up by employers of businesses of any size, for employees and for Self-employed/ Independent Contractors
  • The Simple Employee Pension (SEP) Plans allows for contribution of up to 25% of each employee’s pay or maximum of $56,000 for 2019 tax year and $57,000 for 2020 tax year.
  • For Self-employed, contributions are limited to up to 25% of net income. The eligible compensation limit $280,000 for 2019 tax year and $285,000 in 2020.
  • The employer is the one that contributes to the plan and must contribute equally for all eligible employees. Employees may be able to contribute to SEP IRA
  • The employee is always 100 % invested in and has ownership of all SEP-IRA money even though the employer contributes to it.
  • Withdrawals are permitted under the age 59 ½ but it is subject to 10% additional tax early withdrawal penalty fee.
  • As with all other traditional IRAs, Participants must withdraw a specific minimum amount from the account by April 1 of the following year when you reach age 70 ½. Also an additional Required Minimum Distribution (RMD) withdrawal amount must be taken out from the account when age 70 ½ is reached and must be withdrawn by December 31 of that year for the following year and annually thereafter.
  • Additional Resource Website from (SEP)
Fin Literacy

Saving for that Rainy Day

Having an Emergency Savings Fund

Fin Literacy Reduces Financial Stress

Fin Literacy Protects Your Credit

Fin LiteracyBrings You Onto the Road to Financial Wellness

Fin Literacy

Daily Saving Rates (US)

A Survey conducted by Federal Reserve 2019, Report on the Economic Well-Being of US Household in 2018, found:

fin literacy, Fin Literacy Survey conducted by Federal (2019)

  • 61% of American can cover an emergency expense using cash, savings, or credit card that would be paid off at the next statement. This is a 2% increase from 2017.
  • However, the remaining 4 out of 10 would have a difficulty in covering an expense of $400+ and would have to carry balances on credit cards and borrow from friends and family.
  • Still 12% of American cannot cover this expense by any means.

Fin Literacy

Money experts recommend that you to set aside money covering 3 to 6 months of monthly expenses in a separate account.

But what exactly how much should we put aside each month, depends on your after-tax yearly income  The post-tax salary  =  ( gross yearly income multiplied by your tax rate) –   (total /gross salary for the year) divided by 12 months and then multiply by how many months you prefer to put into for your Emergency saving fund.

So, Emergency Saving Fund = (post-tax salary of 1 year) ÷ 12 (months) ×  3 or 6 (months)

Chart Data  from in  Article: Corinne Jurney (2017)

Saving NOW in many little ways, can make a difference for how you will survive a recession or a job loss.

Fin Literacy

Some ideas for where to begin and Don’t Forget to Celebrate the Milestones:

  • Most Important- Pay Yourself First and make the transfer into your savings automatic and regular monthly investments!
  • Re-evaluate your automatic subscriptions and memberships
    1. Turn off : auto-renew”
    2. Consider membership sharing with family and friends (upgraded subscriptions may offer streaming from multiple screens)
    3. And Cable too? Consider alternatives to Cable with network channel apps and online streaming services
  • Sell your unwanted items
    1. It is always a good time to do spring cleaning and open spaces in your home, especially your closets-Poshmark,thredUP
    2. Buy and Sell your unwanted tech- Decluttr
    3. Buy and Sell with your neighbors- 5miles

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  • Lower your grocery spending
    1. Shop with a list
    2. Planning your meals and using ingredients from your pantry
    3. Stockpile your Freezer with making bigger meal quantities and freezing the left overs
  • Save Money on Energy
    1. Use Energy Efficient Appliances and Light Bulbs
    2. Consider washing clothes with cold water for laundry
  • Rent or Borrow, instead of buying
    1. Rent The Runway  gives an alternative for a change in your wardrobe monthly or for a special event
    2. Borrow Books, Audio Books and Magazines online from your Local Library
  • Coffee in the Morning or that Lunch at Work
    1. Pack it from home
    2. Look for Discounts / Bonus cards on your favorite drink and food
  • Going Shopping
    1. Don’t forget the coupons -Check your email for store deals, RetailMeNot,
    2. Price Comparisons – Shop Around for your favorite item before you purchase:  Shopsavvy App, GasBuddy App, GoodRx App
    3. Saving with Cash Back Apps:
      1. Rakuten (Ebates)
      2. Ibotta
      3. Checkout 51
      4. Receipt Hog
  • At times, you may consider to allocate the dividends from dividend stocks to fund your short-term goals

Fin LiteracyGet Financial Help from the Government if you have been in a disaster.

Call USAGov at 1-844-USA-GOV1 (1-844-872-4681) 8:00 AM – 8:00 PM EST Monday- Friday, except holidays

Disaster Financial Assistance includes the following: (but visit the website for further details and updates)

  • Coronavirus Aid, Relief for Individual and Businesses (CARES Act)
    • Paid Leave for workers due to Coronavirus
    • Ease of Food Stamp Program Rules, visit site Food Assistance
    • Food Programs for School-aged Children and Seniors- Parents can Pick up school meals for their children to eat at home
  • Disaster Unemployment Assistance
  • Emergency Help with Utility Bills
  • D-SNAP Helps with Food Cost After a Disaster
  • WIC Program for Women and Infants
  • Special  Home Loans for Disaster Victims
  • Mortgages for homeowners Rebuilding after a Disaster
  • Disaster Tax Relief

Best High Yield Saving Accounts for Emergency Fund

Thinking about putting aside money in an emergency saving fund, but weary of the gyrations of the stock market. A High Yield Savings Account may be a good alternative for your money to be easily accessible in case of an unexpected bill or health expense. We researched the web to highlight the some of the best High Yield Savings Accounts in the today’s marketplace.

High Yield Savings Account is a savings account with a higher variable interest rate than the national average APY and most traditional banks with customer service at physical locations. There is a limit of six (6) withdrawals/debit per statement cycle. The interest is compounded daily and posted monthly. They are a member of the Federal Deposit Insurance Corporation (FDIC), which means that your deposit accounts are insured up to 250,000 per depositor for each account ownership category.

Note: The Interest Rate and the Annual Percentage Yield(s) (APY) as advertised is accurate at the time of this post. Interest rate and APY are subject to change without notice anytime before and after a High Yield Savings Account is opened. Interest rates may change as often as daily. Please visit their website for further information. FinaLoca does not include all savings companies or all savings offers available in the financial banking marketplace.

Updated June 2, 2020

Calculate your Savings Growth with our Investment Compound Interest Fin Calculator

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Fin Books

What do Successful Business-Minded People Have in Common?

Successful Business-Minded People ARE Readers. They love to read! Successful Entrepreneurs feel that reading is part of the reason of their success. In fact, reading and gaining knowledge contributes to finding solutions to the promising and challenging Future that lies ahead of us.

Recommended from Successful People

Our Thoughts on how Reading Books Empowers YOU

    B Begin to reward yourself with knowledge- BUILDFin Literacy

O Open your mind your eyes and your heart to the content inside- OPENMINDEDNESS

O Organize your thoughts your focus your goals to gain insight to overcome obstacles and find life options- OPPORTUNITY

   K Keep on reading and Enjoy- KNOWLEDGE

S Strive for success and support your world- SHARE

Our Recommended Fin Books

Amazon Store Search

Amazon Deals and Program Offers

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