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NEW - Exploring Computer Science (B5 - Computer Technology)
Study Skills Toolbox
One of the most important classes you can take BEFORE going to school is a study skills class. However, since most of you are currently enrolled in the most important class of your life, Financial Literacy, I want to provide a list of important study skills.
- Make Each Class Your Priority: Whatever class your in, act like its your favorite subject in the whole-wide world. This has two purposes, one, mental blocks that you have will be eliminated, which will make it easier to learn the subject. Second, the class is probably your teachers favorite subject. Treating their favorite subject like its your favorite subject will encourage the instructor to be more helpful with your struggles in the class. (How to Win Friends and Influence People)
- The "Magic T": this is a seating choice (were provided or requested) that has you sitting on the front two rows and/or the middle two columns of a class room. The "T" shape of seats that is created tend to have higher scores than the students in the back two corners of the room.
- Learning Takes Effort: You know that kid in class who seams to know everything already and the A comes easily. Well, every class is going to have a few. But its not going to be the same kid in every class and its probably not going to be you. While some kids are simply "smarter," nothing is better than simple, honest to goodness, hard work. You will have to read, re-read, and highlight the information. It will take time and effort, but, in this case brawn can beat brains, you just have to beat the course into submission.
- Ask your teacher to explain how the course is organized: When are assignments due, how to turn them in, how the tests factor into your grade, tips on studying for tests, and the best resources for vocabulary lists that will be on the tests. Understand the "mechanics" of how the course is designed.
- Your cell phone? You know, that little black box of failure. TURN IT OFF!!! Distractions have always been a part of school. Playing with sticks, passing notes, beepers, cell phones, texting, smart phones. Guess what else has always been a part of school, Failing. Maybe their is a correlation here?
- Preview the material before coming to class: Know what your are going to learn before you learn it.
- Participate in class discussions and activities: This reinforces the first concept of treating each class as your favorite.
- Come to school to be at school: One company famously stated on a sign above the employee entrance "welcome to work, leave your issues at the door." While this is a rather callous statement the underlying concept is true. Life can be hard, we often make choices that make it harder. Welcome to school, leave your outside worries at the door and enjoy the time afforded to you to learn.
- Outside of Class: Plan time each evening for homework/study: Make it a dedicated part of your day. Don't overload your study time with eight different classes. Complete homework/study a little bit every day. Try and complete work during the week so you can take the weekends off. You need this time to recharge and prepare to hit it hard the next week. (Remember: school is prep for real-life. Do you really intend to work on work during the weekends? You will be working some late-nights, putting in 60 hours a week, but try to keep your weekends free.)
Sample Budget for 60, 20, 10, 10 plan
I have created a budget file as a google sheet with a simplified list of
expenses. It also shows how your budget items contribute to your 60, 20,
10, 10 outline and how your budget of 60% for housing, transportation,
food, and insurance compares to the guidelines.
Click the link for the google sheets online file and download it to your own device.
Spending Plan Budget Please copy to your own google drive.
Click the link for the google sheets online file and download it to your own device.
Spending Plan Budget Please copy to your own google drive.
Insurance Options
Insurance, you can't live with it and you can’t live
without it. It is perhaps one of the most frustrating expenses in your budget.
You pay good money for this “thing” that you don't want to use. And worse still,
after a few years of paying for it, you start thinking that you could have saved
enough money to just cover any expense yourself. And with a good amount of
luck, you might just be right.
You see, with life’s risks, you have four choices:
- Accept – Pay for all of the costs associated with all of the losses.
- Avoid – Foresee and fix all possible causes for all possible losses.
- Mitigate – Foresee and reduce some possible causes for some possible losses.
- Transfer – Pay someone else to pay for all of the costs associated with all of the losses.
The first three (Accept, Avoid, & Mitigate) require
that you financially/materially prepare in some way for all possible risks.
The problem is that we cannot foresee the future and as a result cannot prepare
for all types of risk. Eventually, a customer, employee, or mother-nature is going to
do something that we didn’t expect and cause some type of loss that we didn’t
foresee.
Transferring the risk, through insurance, is the best way
we can cover ourselves; after doing all that we can do to eliminate risks.
However, insurance companies will only cover those risks
that we specifically pay them to cover. This results in us still accepting some
risk. We must then choose to Accept, Avoid, or Mitigate any remaining risks. Of course, we can always look to another insurance company
to cover these other risks and Transfer them as well.
But Transferring risk is not necessarily always possible.
Waiting periods or the cost of COBRA & GAP insurances can make Transferring
risk impossible. During these situations we still need to be financially
prepared to pay for some costs ourselves. In other words, you still need to “self-insure.”
Self-insurance is an idea were you take some personal
responsibility for the risks of life and prepare to handle them yourself. Such
as:
- Avoid obvious risks (Don’t participate in inherently dangerous activities).
- Mitigate possible risks (Use snow tires during the winter months).
- Transfer large cost risks (Buy Home Owners/Renter, Auto, Health, and Term Life insurance to cover the cost of items ten-thousand dollars or more in value).
- Accept smaller unforeseen costs (Have a Savings account of at least $1,000 to $10,000 to pay for “life” expenses not covered by insurance).
While its not fun to see money spent month after month on something you don't want to use, ultimately, the financial safety and security is worth the costs. Then again, if you feel like you are paying too much, it's time to shop around for better rates.
Stock Market Game
Set-up for Playing the Stock Market Game
marketwatch.com
Instructions for the weekly stock journals
marketwatch.com
- Sections
- Games
- Find A Game
- Search for "Westlake Stock War"
- Password "thunder" or speak to your instructor.
- Complete Profile
- First Name field "Teacher Initial, Class Period, Space, Students First Name" - OA1 Pat
- Real email address (not school district email address)
- Make up the rest of the information - Company info etc.
- Verify your email and contact
- From the Welcome Page - Click on the "Trading" tab
Instructions for the weekly stock journals
- Find a company by using a search engine to look for the Stock Symbol for a company
- Copy/Type that stock symbol into the search field of the game
- Click on the Stock Symbol for the company
- On the Company Info page read an article, from the past week, about the company.
- Change the chart view to 5 days
- Write a short paragraph that connect the information from the article to the effect of the stock price.
- REPEAT this two times (three company's) each week.
- Then, go the the MarketWatch home page, find an article from the past week regarding the Stock Market as a whole.
- Read and summarize the article.
- Submit all four paragraphs to your teacher.
Taxable (Roth) VS Tax Deferred (IRA & 401k) Explanation
Using the Taxable (Roth) VS Tax Deferred (IRA & 401k) Graphic as a visual aid, here is a simple explanation of the difference between the two types of Retirement Accounts.
Taxable: You receive your paycheck the same way as usual. You pay taxes on your Gross Pay (B3) and this gives you your Net Pay (B12). Your 10% retirement fund is then calculated from your Net Pay (B5) and then the rest of your budget is paid from the discretionary income.
Tax Deferred: There are two options for tax differed accounts.
Option 1 increases your monthly Cash Flow (you feel richer)
Option 2 increases your retirement accounts (you have the same cash flow as a taxable account)
Tax Deferred - Cash Flow: You save the same 10% of Gross Income as you would have if you were using the Taxable account (Red Arrow to E19). However, since you aren't saving 10% of your gross income you have an increase in disposable income each month of $69 (Purple Arrow to E12). Ultimately you will have same amount saved up as the Taxable route, however you will still have to pay taxes (as much as 35%) during retirement. You will have a better life now but your retirement won't be quite as nice.
Tax Deferred - Maximize Retirement: You save 10% of your Gross Pay (Blue Arrow to H15). This would be a full $400 per month. While your Disposable income is the same as the Taxable option (Green Arrow to H17) your are saving an extra $88 per month. With compounding interest this extra $88 each month could mean an extra $130,000 after 30 years at 8%. Again, you will still have to pay taxes on this amount during retirement.
Taxable: You receive your paycheck the same way as usual. You pay taxes on your Gross Pay (B3) and this gives you your Net Pay (B12). Your 10% retirement fund is then calculated from your Net Pay (B5) and then the rest of your budget is paid from the discretionary income.
Tax Deferred: There are two options for tax differed accounts.
Option 1 increases your monthly Cash Flow (you feel richer)
Option 2 increases your retirement accounts (you have the same cash flow as a taxable account)
Tax Deferred - Cash Flow: You save the same 10% of Gross Income as you would have if you were using the Taxable account (Red Arrow to E19). However, since you aren't saving 10% of your gross income you have an increase in disposable income each month of $69 (Purple Arrow to E12). Ultimately you will have same amount saved up as the Taxable route, however you will still have to pay taxes (as much as 35%) during retirement. You will have a better life now but your retirement won't be quite as nice.
Tax Deferred - Maximize Retirement: You save 10% of your Gross Pay (Blue Arrow to H15). This would be a full $400 per month. While your Disposable income is the same as the Taxable option (Green Arrow to H17) your are saving an extra $88 per month. With compounding interest this extra $88 each month could mean an extra $130,000 after 30 years at 8%. Again, you will still have to pay taxes on this amount during retirement.
Choosing a Charity
I
have noticed an up-tick in the number of ad's for Charitable
Contributions lately. It seems as though everyone from Public Television
to Primary Children's Hospital is asking for donations and "pledges of
support." In addition, there have been a lot of tragedies lately where
the family of the victim has created a "go-fund-me" account or they have set-up an
account at a local bank or credit union to accept donations.
With that in mind, I thought I would share some things to consider when choosing a charity to donate too.
- Give to groups you know.
- Make sure the charity is the one you think it is:
- Some charities are based in another State so your donation won’t help your local area.
- Other charities will use a similar name or a common misspelling in order to get money that was intended for the legitimate organization.
- Ask if your gift is tax-deductible:
- Not all charities are non-profits. Many are business and the donation is not a tax-deductible.
- Make sure you understand the group’s work:
- Investigate how the charity solves the issue. Sometimes the cure is worse than the disease.
- Make sure the charity it legitimate:
- GuideStar website lists charities that have registered with the IRS. It doesn’t rank them.
- BBB Wise Giving Alliance ranks the charities based on compliance with 20 “accountability” standards.
- Don’t be afraid to ask questions:
- Call the charity, make sure you get a real person, and ask a few questions regarding the organizations short and long term goals.
- Find out about expenses:
- Charity Navigator evaluates Form 990’s to determine how efficient the charity is and what percentage is spent on administration costs versus actually helping.
- CharityWatch recommends that at least 60% of your donation goes to the endeavor itself.
- Think twice before giving to a university or hospital:
- The old adage that “it takes money to make money” couldn’t be more true than in charity fundraising. Large organizations that you see on T.V. or radio have the money to advertise. Smaller organizations that can’t spend money on advertising may have a greater need and better utilization of those funds.
- Volunteer:
- Rather than give an organization your money, give them your time. However, while you're there you can learn about the charity and see if giving them money is the right thing for you.
- 10-Protect yourself:
- Look for Red Flags: Charities that involve animals, children, first responders and veterans may use emotional images to generate funds. B-Don’t give charities credit card information or other resources that can be re-billed. Don’t set up charities with auto-draft privileges. These can lead to over-draft fees and other bank-account-draining activities.
Financial Success
So, the other day I was asked the following question:
What savings and/or investment strategy have you applied that has been a success?
My answer came fast, Pay Yourself First:
There are three steps to make Pay Yourself First (PYF) work.
Step 1 is
to create a budget to prove what surplus cash COULD be available at the end of
the month. For me, this budget is reasonable but should also favor
semi-aggressive savings. This is why I don’t like super itemized budgets that
cover such things as wrapping paper costs each month. While I am a control
freak and generally like lots of detail, I can’t handle that level of budgetary
detail in my finances.
Step 2, once a budget has been created and you know how
much money you should have at the end of the month this amount is set up as an
auto-draft at the beginning of the month. Again, personalities play a big part
in the success of a specific type of financial practice. For example, I don’t
like moving money from my savings account back into the checking account. So if
there is a purchase above a budgeted amount that has to be transferred back
into the checking account.
Step 3, after $1,000 has been accumulated in the savings
account any additional funds can be transferred off into higher interest
earning accounts to develop wealth.
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