1.It is a protection against unforeseen personal events, as well as in the wider economy. 2.Transference of family across generation 3.Effects of tax policies on management of personal finance 4.Effect of credit on individual financial standards 5.Planning a secure financial future in an environment of economic stability 6.Personal finance may involve paying for education. 7.It may also involve paying for loans, or debt obligations.
There are six key areas of personal finance:- 1.Financial position 2.Adequate protection 3.Tax planning 4.Investment and accumulation goals 5.Retirement planning 6.Estate planning
Finance is a field is closely related to accounting that deals with the allocation of asserts and liabilities over time under conditions of certainity and uncertainity.
Financial also applies and uses the theories of economics at some level.
"09/07/14 - Around one in seven students in the 13 OECD countries and economies that took part in the first OECD PISA international assessment of financial literacy are unable to make even simple decisions about everyday spending, and only one in ten can solve complex financial tasks.
Some 29,000 15 year-olds in 18 countries and economies took part in the test, which assessed the knowledge and skills of teenagers in dealing with financial issues, such as understanding a bank statement, the long-term cost of a loan or knowing how insurance works." - OECD
The United States ranked 8th out of 17 countries [9th out of 18 if you include the province of Shanghai], just behind Latvia. So what does that really mean?
The PISA Financial Literacy Assessment Framework was released some time ago. A matter of fact, we used it as a resource when finalizing the Ohio Department of Education Financial Literacy Standards. Standards in Ohio exist and are required to be implemented, as they are in 34 additional states. However, Ohio's financial education policy reflects a complex challenge in the United States... standards may exist and are required to be taught, but per Jump$tart, at least 45 states do not mandate a personal finance class to graduate high school. Further, I have yet to find any states who require and pay for teachers to receive financial education content certification.
The PISA financial literacy assessment was administered to a nationally representative sample of students in schools across the United States. Financial education efforts mandated in the United States are broad ranging, if they exist at all. Take for example the financial literacy requirements in Connecticut, Massachusetts, and Florida per the Council for Economic EducationSurvey of the States.
Connecticut - Personal finance standards are not required to be taught; Personal finance is not required to be offered; Personal finance is not required to be taken to graduate; Personal finance testing not required
Massachusetts - Personal finance standards are not required to be taught; Personal finance is not required to be offered; Personal finance is not required to be taken to graduate; Personal finance testing not required
Florida - Personal finance are standards required to be taught; Personal finance is not required to be offered; Personal finance is not required to be taken to graduate; Personal finance testing not required
At the time of testing, Florida, like Ohio, required personal finance standards be taught. However, if standards are not taught by a trained teacher, are not taught as a semester course, and are not tested while other subjects are tested... the commitment schools make to teaching the coursework varies and is usually minimal.
Sadly, students who needed a helping hand the most appear to be our most underserved. As with other PISA assessed subjects, socioeconomics seemed to be one of the key contributing factors. Further, the questions used in the financial literacy assessment are practical and financially consequential. Problems were presented in real life context. PISA assessed students’ ability to apply their knowledge and skills to real-life situations involving financial issues and decisions. For example, students were asked to respond to questions about billing invoices and debt products.
At a time when high stakes standardizing testing is at the forefront of education policymaking, we have to ask ourselves what could be more high stakes for our students than making bad choices that could lead to losing thousands of dollars.
Much is to be considered... How can we adopt legislation that ensures every student receives sufficient financial education instruction? How do we better train our teachers and provide evidence based results? How do we bring parents into the circle? How do we fully utilize synergies between the public and private sectors? How do we look at our standards through the eyes of a behavioral economist and build strong bridges between what students are learning, and how students are behaving? How can we better focus on concepts that yield evidence based results? How can we bring to scale successful in-school banking programs?
One thing is certain, the implementation of financial literacy in our schools is in its infancy stages and there are a lot of passionate educators and leaders who want to do more.
Clearly the expert to follow to learn much more is Annamaria Lusardi (Twitter: @A_Lusardi).
It's technically my daughters first Ramadan. She's 7 and she will have to fast the whole day. Starting around lunch time is when she starts to complain. Under normal circumstances, she never asks to eat. In fact, we have to insist that she eats. During Ramadan, she wants to break her fast as soon as she feels slight hunger. Then she made a plan for break time to eat everything in sight. Of course, once she did break her fast, she didn't act according to plan.
There are two things that are at play during fasting. Hunger and satisfaction. The combination of physical and emotional need to fill the void and feeling satisfied soon after. When we're going against food, we can probably win most challenges. But how can we win against objects, when we window-shop and have a sudden urge to buy?
It's very hard when you're going against yourself without a buffer (friend, family, spouse). I am almost always the loser when I am by myself. The quick answer if you've ever find yourself digging further emotionally to find justification to buy is to quickly remove yourself from the situation. You'll soon remove yourself from the emotions you experienced and quickly gain self-control.
PS. Happy Ramadan.
During Ramadan, I will be taking a break from this blog, though not a complete break. I will be going through all my past posts and clean up on my poor writing to my abilities. I'll see you after Eid. Salaam.
I've been always stoical of all the stuff that I do and what I've been through. This has helped me almost all of the time and I consider this as one of my strengths. In fact I boldly accepted myself as being stoic and I'm proud to be one. Oh yeah I almost forget, I'm not showing off!
There are so many ways people show off. It is done either online or offline but it doesn't matter. It still constitutes a way of flaunting that could pose a significant effect. Some examples of online flaunting are posting pictures in social media about a new luxury car, lavish vacations including food and accommodation, expensive gadgets and worst of all, a self portrait with a pile of money.
Offline examples include wearing glittering trinkets all over the body, unsolicited bragging of luxury experiences and the like.
I don't feel bitter nor happy about these people. Rather I feel compassionate about them. It must have been that they're often neglected that they want to ding for others to notice them. Too bad.
I am not against the idea of flaunting because it is human nature to share the emotions to other people. As humans we can't keep to ourselves what we feel and to interact with one another is within the norms. What is pissing me off is when shallow details have been magnified so as to call the attention of others. Sure this is going to be ego self-boosting but most often than not self-inflicting. These are some of the downsides of outrageous flaunting that I feel compassionate about.
1. You are cocky
The message of flaunting will be clearly sent to the recipient. But how a person perceives beyond the superficial message is uncontrollable and often destructive to the sender. While you might feel happy about posting pictures of you driving a Lamborghini, others may think you are bragging what you have and not really looking into your achievement and self-worth.
2. You have less attention
Having luxury items speak for itself and don't need to be showed off. Wearing an Hermes bag on a banquet is good but having an enlarged picture of it on social media is not appropriate. Doing so will result to an ill-mannered way of calling people's attention. If you need praises and compliments, donate your bag and help other people.
3. You put yourself at risk
Flagrant showing of what you have jeopardizes your privacy and personal safety. If this is going in the wrong ears, it could possibly get you in trouble. Don't let that happen.
Conclusion
To flaunt is to flare. But not all things can be flaunted. Remember, people will like you not because of what you have but what you are. Instead of bragging about your newest acquisition, why not talk about your struggles and achievements instead? You will never know but that could be the tipping point of other people. They can see your intrinsic qualities that could inspire them to do the same and achieve their goals in life.
I've turned in my resignation letter, and I've taken it back. Circumstances change quickly. I feel I've made the right decision to resign but the timing wasn't. What I'm trying to avoid is making decision in an irrational state. It's hard to know when you're being irrational, so I choose to go to the personal finance blog that I really trust, the financial samurai. The website has a useful tip of 15 things to consider before we choose to resign from our job. I'm going taking some of them off, so it will be 12 rather than 15.
1) What are you really unhappy about? Always the first question to ask but maybe the most hardest to answer with an honest heart. I am still trying to list the source of my unhappiness.
2) How large is your safety net? Having a drought savings/emergency savings is essential. Prophet Yusuf a.s. had one because he knew a drought is coming. Quitting is a little bit different, because I am causing myself to face a drought of income. Do I have 12 months of savings? No. This is the easiest question to answer, and because the answer is no, I am not quitting now.
3) Calculate your monthly cash burn rate. I know how much I burn monthly, and I burn all my income in a month to pre-planned and some unplanned purchases. Financial samurai suggests finding that value and multiply it by 12 to 24 for an emergency of 1 to 2 years.
4) Calculate your passive income streams. It's possibly to be unemployed but still produce income if we have passive income streams. Passive income are income that are not produced by our main source of income. Usually it is described as income produced without doing anything. I don't like that description because there's always a certain amount of work that goes into an income. Whether it's renting properties or even royalties. There is an amount of work that goes into it.
5) List out all the things you plan to do. I have so many things I want to do during my temporary unemployment. Finishing up on my books. Maybe my unhappiness is due to the fact that I don't have time to do the things that I wish to do on the side...
6) Think about others. An unexpected whammy. My wife is pregnant with my third child.
7) Will a sabbatical do the trick? I'm considering asking for a sabbatical to get the kinks out of my system. I'll have to ask the human resource department for this.
8) How open is the Bank of Mom and Dad? I've been a burden long enough, no need to add more years into my account.
9) Are you willing to work at McDonald’s? It's better to be underemployed rather than unemployed. During the toughest time, Prophet Yusuf alayhi-salaam still had years of production even if they were poor. Because losing 100% of income will be one of the most difficult thing to live by.
10) Do you have something else lined up? Yes, I do. Not final, but it's something.
11) Take your time to quit. I had a bonus coming and I turned in a resignation letter. A dumb thing to do, which made the cancellation justified.
12) Talk to as many people who’ve quit as possible. Any one quit their job recently?
Earlier this year I created a LiveBinder for recent high school graduates and college students. My goal was to give students a financial resource they could rely on as they transitioned into the adult world.
I carefully selected resources that students could trust, primarily from government and non-profit organizations. I did not want to overwhelm students with too many resources, while also covering the financial decisions they are making at that stage in their lives.
