He wants to teach your kids about money. You should listen, too. (Photo: DIC Entertainment)

What have we learned about the way people handle money lately? Loose and lazy seems to be the general rule in America, in that people don’t tend to plan as much for the future as they should and operate on instant gratification. Lack of impulse control is common. Yet the current recession has been a deep, dark, truthful mirror of sorts, not only for ourselves but for our government. Just as we must manage our money well and make informed decisions, the government needs to do the same and stop shoveling problems under the rug. Hopefully, the Obama administration will start breaking some of the old ways.

But what about us?

Payday loans and unsecured loans offer short-term help, but what should we do over the long haul? We should look to any sources we can find to teach ourselves and our children about finance. First and foremost, it should be part of the core educational curriculum from a very early stage in schools.

However, there are other tools. For instance, Warren Buffett, the mastermind investor of Berkshire-Hathaway, has agreed to lend his voice to a new animated series called “The Secret Millionaire’s Club.” The idea behind this is to “get children to grasp basic finance lessons well before they do things like, say, agree to a risky, adjustable rate mortgage,” reports The Huffington Post.

Here’s Buffett’s idea

If we can get through to some young people, say it’s better to be ahead of the game than behind, watch out for credit cards, most important message is the best investment you can make is in yourself. Teach them if something is too good to be true it probably is. So if they learn those things the easy way through these stories early on it may save them learning the hard way later on.

He’s definitely enthusiastic about “The Secret Millionaire’s Club.” Here’s a recent CNBC interview:

Stock market looking up

Definitely animated (Photo: Poolparty.com)

People need to know about these kinds of things. People want to know what’s going on with the stock market. Specifically, whether or not they should start investing again. On that matter, Warren Buffett has had good things to say. Now that the Dow has hit 9,000 for the first time since January, he’s weighing in: “I would much rather own equities at 9,000 on the DOW than have a long investment in government bonds or a continuously rolling investment in short term money now. Again, I don’t know where it’s going to go next week or next month.”

So according to Buffett, investors should invest now. Business may still be flat, but as Buffett puts it, “If you wait until you see the robin, spring will already be over.”

Short term money?

Payday loans and unsecured loans are short term money. If your budget has a real need for that kind of boost, you can apply right here, right now. And be sure to check out “The Secret Millionaire’s Club” when it hits a computer or television near you.

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Peter G. Peterson

The head of a newly established grant organization, the Peter G. Peterson Foundation, will be in attendance this week when President Barack Obama holds a summit on fiscal responsibility.

According to Park University’s Center for International Civil Engagement, “the Peter G. Peterson Foundation is dedicated to increasing public awareness of the nature and urgency of several key challenges threatening America’s future.”

Financing financial education

Among the grants that the Peter G. Peterson Foundation gave out when it was first established was $500,000 for opinion research and citizen engagement organization Public Agenda. The money is intended for Public Agenda’s program Facing Up to the Nation’s Finances.

The $500,000 grant will fund a two-year program called Students Face Up to the Nation’s Finances. Park University says the grant money will be used:

To refine and disseminate a package of learning materials designed to raise college students’ awareness of our national fiscal challenges and engage college students across the nation in a discussion of the solutions.

Use money wisely

I hope part of the program will be teaching students about no teletrack payday loans and how to use them wisely. That’s something students should learn about before they finish college.

Ideally, students should be informed about all of their financial options, with stress placed on making sure to always use money responsibly. They should also be well versed on the consequences of misuse.

Background on Peter G. Peterson Foundation

The Peter G. Peterson Foundation was started by and named after the senior chairman of the Blackstone Group. Peterson started the foundation last year using profits from Blackstone’s IPO.

According to Wikipedia, Blackstone “is an alternative asset management and financial services company that specializes in private equity, real estate, and marketable alternative investment strategies, as well as mergers and acquisitions (M&A), restructuring, and fund-placement advisory services.”

Background on Peterson

“In 1971, Peterson was named Assistant to the President for International Economic Affairs” during the Nixon administration, according to Wikipedia. Before that he worked in market research, advertising, ran a movie-equipment making company and was chairman of the Commission on Foundations and Private Philanthropy, which later became known as the Peterson Commission.

After working for Nixon, he was chairman of Lehman Brothers, and he started the Blackstone private equity fund in 1985.

Dissenters question agenda

Mr. Peterson has never been shy about using his Wall Street wealth to try to cut Social Security and Medicare, and he recently stepped up his efforts. … Peterson’s main story is that these programs are bankrupting the government and will impose an unbearable burden on future generations.

The same opinion article also says:

Mr. Peterson is known as one of the top beneficiaries of the (Blackstone) fund managers’ tax break, through which he personally pocketed tens of millions of dollars.

Beneficiaries

According to Wikipedia:

To date, the Peterson Foundation has awarded nearly $11 million in grants. Recent grant recipients include the Center for the Study of the Presidency, the Institute for Advanced Policy Solutions at Emory University, the Institute of Medicine, and the Common Good Institute.

For those f you who just have to know, the G. is for George.

Do these kids know more than you about personal finance?

Boy Scouts are too young to get payday advance loans. However, with a new merit badge up for grabs, more will be ready to properly evaluate their financial options when they become adults.

To earn the personal management badge, Boy Scouts must be able to correctly answer questions about credit, interest and budgets.

Take the quiz

There aren’t any questions about payday advance loans on the Boy Scouts’ quiz, but a little financial literacy goes a long way. If children and teens learn to understand budgeting and long-term interest, they’ll be better prepared to make financial decisions of all types. You can take the Boy Scout quiz at CNN Money to find out if you have the know-how to manage your money like a Boy Scout.

Financial education becoming popular

Possibly the best fallout from the recession is the new-found interest people are taking in financial education. Christian Science Monitor points out that “20 years ago, personal finance was significantly less complex than it is today.” The same article advocates that more states should add financial education requirements to public school curricula.

Land of opportunity – and options

It’s true, personal finance is a lot more complicated nowadays. That’s not necessarily a bad thing, though. People have a lot more options today than they did 20 years ago. Things like payday advance loans were born out of people’s changing needs as our money culture adjusted to becoming more credit-based.

It makes a lot of sense to educate people about long-term and short-term credit options — the sooner the better.

Good examples

We can rest assured that Boy Scouts will emerge from their programs ready to perform CPR, tie knots and evaluate whether payday advance loans are their best option. But what about everyone else? Financial education should be required for everyone. More states need to follow Kansas’ example and write up bills that would require financial literacy to graduate from high school. That way people will learn to use payday advance loans responsibly and won’t get stuck with bad debt.

Experts are suggesting financial education as a means of long-term national economic stability.

With options like payday loans, credit cards and all kinds of lending sources out there, some analysts are wondering whether financial advice should be part of the effort to repair the economy.

An economist and columnist for the New York Times, Robert Shiller,  points out that Americans making bad financial decisions was a big contributor to the economic crisis. The blame game has shifted responsibility between so-called “predatory lenders” and people who took out mortgages and other loans they couldn’t afford.

He suggests that a good step toward preventing another economic crisis is to fund more government programs that help people become financially literate.

Existing programs and efforts

There already are a few government-funded efforts in place geared toward financial education. These include the Office of Financial Education and the Advisory Council on Financial Literacy. Both programs mainly distribute financial education through outreach to schools.

Some states have taken it upon themselves to require financial literacy as a high school graduation requirement. So it appears that efforts are being made to ensure that the next generation will be more financially literate in the future. But what about the current generation? They aren’t going anywhere any time soon. And many of them don’t even understand how payday loans work.

Help for everyone

Shiller suggests that the government should subsidize financial advise because most people get their advise at the same time they are getting a sales pitch. People who took out subprime mortgages relied on the advise of the people who were profiting from those mortgages, and catastrophe ensued.

This is why Shiller suggests that there should be financial advise available from parties that are not involved in financial transactions. With con artists, defrauders and financial predators out there, the government could help keep individuals’ finances stable. This, in turn, would help keep the nation’s finances stable.

More reasons to educate the  masses

The Federal Housing  Administration is in charge of making sure that mortgage lenders are legit and ethical. However, the FHA admits that it is understaffed and unequipped to screen the high number of lenders who are applying for government approval.

Furthermore, if the government employes financial advisers, that will create jobs and help stimulate the economy. So, in regard to addressing the withering economy, it’s a win-win.

Obama’s economic plan

Barack Obama has said many times that his economic stimulus package is designed to stimulate the economy in the short term as well as build financial stability in the long term. If funding is included to employ public financial advisers, the initiative will achieve both long-term and short-term affects. it will immediately create jobs for those financial advisers, and it will give individuals the tools to ensure their own long-term financial stability.

Educating people about their options, such as teaching them the benefits of using payday loans instead of credit cards, would certainly make for a more financially healthy nation as a whole.

Building credit is more complicated than most people think. It's not simply a matter of paying your bills on time.

On PersonalMoneyStore.com’s payday loans money blog, we talk about a variety of financial topics and money-saving tips, tricks and strategies that help you stretch each of your hard-earned dollars the furthest.

We care about your financial welfare and want to equip you effectively to prosper financially.

That being said, today we are going to start a series on credit — undeniably the most important and least understood part of consumer financial education.

What is Credit?

Most consumers don’t realize the importance of credit or even what credit is. When most of us hear the term credit we think of all the plastic in our wallet that allows us to charge purchases for later payment.

Often times the term credit brings a mixture of both good and bad feelings because of the opportunity it provides us as well as the difficulties it can bring in light of the debt we as consumers tend to accumulate.

The Objective of this Series on Credit

For the duration of this series, however, we will be talking about credit in the terms of personal credit or credit score, or in other words the scoring index by which creditors judge our “credit worthiness” or ability to handle money effectively and responsibly.

How Credit Works

How credit works is complicated, but to get the ball rolling a little more quickly, let’s just throw out a quick description in layman terms.

Every time a consumer, such as yourself, applies for an account with a creditor — such as a bank, credit card company, retail store, auto loan, personal loan or even a home mortgage — the account is reported to each of the nations three main credit bureaus.

There are many factors which determine a good credit score.

What Creditors Track

The credit bureaus track the number of open accounts, closed accounts, account balances, credit inquiries and any history of late payments or collections that have been reported on your behalf. Through a complex algorithm unique to each of the bureaus, they assign you a numerical score.

The purpose of this credit scoring system is twofold. First, it helps protect creditors from fraudulent or irresponsible customer transactions on financed merchandise such as cars, furniture, appliances and anything else you would choose to finance with a credit card or a company’s in-house financing options.

Their are some exceptions to this rule, such as payday loans lenders. These companies typically don’t work with the credit bureaus, which makes them a good loan option for people with bad credit, but we will talk about that later in this series.

Secondly, and most importantly, credit scoring it set up to award those who are diligent and responsible with their financial resources and penalize those who are not.

The difficulty in obtaining a good credit score these days has become a little more cloudy and involves more than just paying your bills on time. For many this begs the question: Is the effort worth it? Or is having good credit really that important?

How Important Is It To Have Good Credit?

It can be easy to brush off the pursuit of good credit as unimportant, but today good credit has become a very important, integral part of every consumer’s personal and financial success. Your personal credit score has an effect on the following:

• How much you pay for car insurance
• How much you pay for house insurance
• How you pay for your personal health insurance
• How high your interest rate is on your home mortgage loan
• How high your interest rate is on auto or other personal loans
• The total credit amount you’re awarded with financed options or credit loans
• Your chances of employment

Almost every major financial transaction will consider your personal credit rating or credit score before awarding or denying you any contractual terms.

Credit and Employment

As mentioned above, more and more employers are running credit checks to validate the credit worthiness of new hires, as they believe it is the best indicator of a potential employee’s responsibility. Employers associate a good credit score with an employee’s diligence to come to work on time each day and fulfill the requirements of their job position.

The Value of Having Good Credit

You can’t put a price on good credit. Good credit saves you a fortune in unnecessary expenses over time that can be delegated to a retirement savings plan or college fund for the kids. Knowing how credit works and its effect on your financial endeavors will open doors that would otherwise stay shut. Short term credit needs are filled well by payday loans.

That concludes part one of this series on how credit works. Consider your personal credit and its limiting factors in your life and join us again tomorrow for part two.

See you then!

Posted courtesy of personalmoneystore.com, your payday loans source.

McCray-Miller says she plans to introduce the bill after the Legislature convenes Jan. 12.

Necessity

The recession has wreaked all kinds of havoc on the everyday lives of Americans. However, it’s also causing people like McCray-Miller to assess the causes and come up with solutions for preventing a repeat performance.

McCray-Miller says, based on Americans’ increasing debt, education is needed for individuals to avoid another financial crisis. She argues that children learn by example, and they have watched their parents (and their government) accrue debt all their lives. Her aim is to break the cycle.

While a payday loan may be a welcome relief for someone in a bind, it’s certainly ideal if people can prevent financial emergencies when possible.

If it ain’t broke … oh wait, it’s broke

I think we are well past the point that people can argue there’s not a problem. Yes, we can blame mortgage lenders and creditors for causing this recession. But while we can’t directly control what investments banks and government entities do with their money, we can control what we do with our money.

Some factors that went into causing this recession couldn’t be prevented. However, educating children about the dangers of accruing bad debt is a step in the right direction toward a generation of individuals who are more capable of financial freedom.

Lesson plans

A 2003 law in Kansas already requires financial literacy to be included in Board of Education guidelines for lesson plans. Apparently this law isn’t clear enough, because some schools still don’t teach the topic. McCray-Miller’s hope is that her law, if enacted, will require that students be financially literate in order to graduate.

So what should be included in personal finance education? Well, I have a few ideas. First, if children learn the difference between good debt and bad debt at a young age, they are more likely to avoid bad debt. Also, students should know how to assess whether the terms of a loan are realistic. With this kind of education individuals will learn how to manage their finances in a smart way and avoid risky deals, such as sub-prime mortgages.

Impressionable age

Some may argue that Kindergarteners are too young to understand personal finance. I believe if the subject is broken down into its simplest, most rudimentary concepts and then built upon year by year it will be successful. It’s like learning math. First, you teach counting, then addition, then multiplication and so on.

So first teacher would educate students on what debt and credit are and then go from there. If students can understand the difference between negative and positive numbers, they should be able to understand debt. After they understand the concept of debt, teach what kinds of debt are dangerous. If children learn this at a young age they are more likely to believe the concepts are true and avoid financial hardship in the future.

Hope for the future

Emergencies do come up, and with so many people teetering on the poverty line, there will likely always be the need for an occasional payday loan. However, starting financial education at a young age will help the next generation to be smart about their money, even in tough times.