Just in time for Financial Literacy Month, the National Consumers League (NCL) has announced the 32 state champion teams who have earned a spot at the 2010 National LifeSmarts Championship, which will take place this year in Miami Beach, Florida, April 24-27. Of course, our own New Hampshire LifeSmarts State Champion and defending state champion from 2009 – Inter-Lakes High School from Meredith – will be right in the middle of the action!
LifeSmarts is NCL’s 16-year-old program that educates teens and tweens on real-world financial and consumer literacy issues.
LifeSmarts is a competitive educational program, in which teams of students begin online. Top-scorers progress to state competitions, and state champion teams meet each April to compete in the National LifeSmarts Championship. Last year, our NH team placed third at nationals eventually succumbing to the eventual national championship team from Wisconsin’s Oconto High School. As you can imagine, there is some serious motivation to go up against that matchup again this year!
We are so proud of all of the students who competed in LifeSmarts this year and they have proven themselves to be the best and the brightest of the next generation of consumers. LifeSmarts is a fun, fast, and educational program, and a great vehicle for educating young consumers. Our program goes in-depth on the issues kids—and adults--are facing now: making smart choices with financial resources, health care, environmental concerns, and how technology affects our lives.
The 2010 National LifeSmarts Champion and other winning teams will walk away with prizes including scholarships and savings bonds. Also, for the first time this year, top students will receive new scholarships for demonstrating knowledge in specific program topic areas. The top eight placing teams are recognized with savings bonds and other prizes.
Consumer-savvy teens representing 32 states will compete at this year’s national event. Throughout the 2009-2010 program year, more than 22,000 teens competed online for a chance to represent their states at the 2010 National LifeSmarts Championship. Players answered more than 3 million consumer questions in the online competition.
Parents and teachers can follow the action at the official 2010 National LifeSmarts Championship blog. The semi-final and final competition matches will be streamed live at www.lifesmarts.org , starting at 9 am Eastern on Tuesday, April 27th
Go New Hampshire!
Monday, April 19, 2010
Sunday, April 11, 2010
Is it Possible to Change a 30-year Culture?
Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates. The shift is sure to come as a shock to consumers whose spending habits were shaped by a historic 30-year decline in the cost of borrowing.
Thirty Years – 1980. Think of these four cultural milestones that did not exist in 1980
1. Widespread credit card usage
2. Cell phones
3. Internet
4. Home Equity Lines of Credit
Since then, more than two generations of kids have grown up thinking that 0% financing for an automobile is only a good deal IF it comes with a rebate too. Two generations of kids – now adults - believing that refinancing your mortgage every few months to take the equity out to buy more stuff is smart financial planning. Two generations of kids – now adults – thinking that using credit cards to buy-now-pay-later is the American way.
The impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest level since last summer.
“Mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market,” said Christopher J. Mayer, a professor of finance and economics at Columbia Business School. “It’s a really big risk.” Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer.
The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year.
For young home buyers today considering 30-year mortgages with a rate of just over 5 percent, it might be hard to conceive of a time like October 1981, when mortgage rates peaked at 18.2 percent. That meant monthly payments of $1,523 then compared with $556 now for a $100,000 loan.
What a culture shift in 30 years.
Another area in which higher rates are likely to affect consumers is credit card use. And last week, the Federal Reserve reported that the average interest rate on credit cards reached 14.26 percent in February, the highest since 2001. That is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical American household.
With losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to Dennis Moroney, a research director at the TowerGroup, a financial research company.
Similarly, many car loans have already become significantly more expensive, with rates at auto finance companies rising to 4.72 percent in February from 3.26 percent in December, according to the Federal Reserve. In 1980, car loan rates were in the 12-13% range and you had to have at least a 20% down payment to finance that car. And... the longest you could finance it was 48 months – no 60, 72 or 84 month financing.
It’s unlikely we will see rates back to the 1980 era – but any sustained period of “high” (you define it) interest rates will be very unsettling to those generations of kids – now adults – who have spent the past three decades enjoying some amazingly favorable interest rates.
Thirty Years – 1980. Think of these four cultural milestones that did not exist in 1980
1. Widespread credit card usage
2. Cell phones
3. Internet
4. Home Equity Lines of Credit
Since then, more than two generations of kids have grown up thinking that 0% financing for an automobile is only a good deal IF it comes with a rebate too. Two generations of kids – now adults - believing that refinancing your mortgage every few months to take the equity out to buy more stuff is smart financial planning. Two generations of kids – now adults – thinking that using credit cards to buy-now-pay-later is the American way.
The impact of higher rates is likely to be felt first in the housing market, which has only recently begun to rebound from a deep slump. The rate for a 30-year fixed rate mortgage has risen half a point since December, hitting 5.31 last week, the highest level since last summer.
“Mortgage rates are unlikely to go lower than they are now, and if they go higher, we’re likely to see a reversal of the gains in the housing market,” said Christopher J. Mayer, a professor of finance and economics at Columbia Business School. “It’s a really big risk.” Each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home, according to Mr. Mayer.
The Mortgage Bankers Association expects the rise to continue, with the 30-year mortgage rate going to 5.5 percent by late summer and as high as 6 percent by the end of the year.
For young home buyers today considering 30-year mortgages with a rate of just over 5 percent, it might be hard to conceive of a time like October 1981, when mortgage rates peaked at 18.2 percent. That meant monthly payments of $1,523 then compared with $556 now for a $100,000 loan.
What a culture shift in 30 years.
Another area in which higher rates are likely to affect consumers is credit card use. And last week, the Federal Reserve reported that the average interest rate on credit cards reached 14.26 percent in February, the highest since 2001. That is up from 12.03 percent when rates bottomed in the fourth quarter of 2008 — a jump that amounts to about $200 a year in additional interest payments for the typical American household.
With losses from credit card defaults rising and with capital to back credit cards harder to come by, issuers are likely to increase rates to 16 or 17 percent by the fall, according to Dennis Moroney, a research director at the TowerGroup, a financial research company.
Similarly, many car loans have already become significantly more expensive, with rates at auto finance companies rising to 4.72 percent in February from 3.26 percent in December, according to the Federal Reserve. In 1980, car loan rates were in the 12-13% range and you had to have at least a 20% down payment to finance that car. And... the longest you could finance it was 48 months – no 60, 72 or 84 month financing.
It’s unlikely we will see rates back to the 1980 era – but any sustained period of “high” (you define it) interest rates will be very unsettling to those generations of kids – now adults – who have spent the past three decades enjoying some amazingly favorable interest rates.
Sunday, April 4, 2010
April is Financial Literacy Month!
National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits.
In 2000, The Jumpstart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month and in 2003 the United States Congress showed its support. Senate Resolution 48 and House Resolution 127 asked President George W. Bush to declare April as Financial Literacy for Youth Month. In 2004, April was named National Financial Literacy Month by the passing of Senate Resolution 316 with unanimous consent, championed by Daniel Akaka D-HI.
Many of the country’s financial institutions and nonprofit financial educational organizations and promote the month by holding promotional events and creating educational materials that center around effectively handling money and dealing with debt.
The New Hampshire Jump$tart Coalition’s 10-year effort to build the personal financial management skills of Granite State teenagers have been recognized by Governor John Lynch in a recent proclamation designating April as Financial Literacy for Youth Month.
Governor Lynch acknowledged that “personal financial education is essential for ensuring that the youth of New Hampshire are prepared to manage money and credit wisely and responsibly.” He recognized the “concerned professionals of NH Jump$tart who volunteer their time and energy to promote financial education for New Hampshire’s youth to meet these educational goals.” In proclaiming Financial Literacy for Youth Month, Governor Lynch “call(ed) upon the citizens of this state to encourage and support” the efforts of NH Jump$tart.
During the week of April 5-9, NH Jump$tart volunteers will be meeting with second-graders at select elementary schools throughout the state as part of our “I Can Save!” Tour. During the visits, we will conduct a brief presentation on the differences between needs and wants and will provide each student with a Moonjar moneybox which promotes the concept of save – spend – share.
Our Get 10 Virtual Scavenger Hunt for teenagers concludes this month. Teens who answer all 10 questions in this online quest for knowledge will be eligible to win one of 10 MacBooks that we are giving away! The Quest ends April 10th.
Our LifeSmarts State Champion – Inter-lakes High School from Meredith – travels to Miami Beach representing the Granite State at the LifeSmarts National Championship at the end of April.
Financial education is finally getting some attention. Our children’s future is dependent on their ability to understand the complexity of the modern day financial landscape.
In 2000, The Jumpstart Coalition for Personal Financial Literacy began promoting April as Financial Literacy for Youth Month and in 2003 the United States Congress showed its support. Senate Resolution 48 and House Resolution 127 asked President George W. Bush to declare April as Financial Literacy for Youth Month. In 2004, April was named National Financial Literacy Month by the passing of Senate Resolution 316 with unanimous consent, championed by Daniel Akaka D-HI.
Many of the country’s financial institutions and nonprofit financial educational organizations and promote the month by holding promotional events and creating educational materials that center around effectively handling money and dealing with debt.
The New Hampshire Jump$tart Coalition’s 10-year effort to build the personal financial management skills of Granite State teenagers have been recognized by Governor John Lynch in a recent proclamation designating April as Financial Literacy for Youth Month.
Governor Lynch acknowledged that “personal financial education is essential for ensuring that the youth of New Hampshire are prepared to manage money and credit wisely and responsibly.” He recognized the “concerned professionals of NH Jump$tart who volunteer their time and energy to promote financial education for New Hampshire’s youth to meet these educational goals.” In proclaiming Financial Literacy for Youth Month, Governor Lynch “call(ed) upon the citizens of this state to encourage and support” the efforts of NH Jump$tart.
During the week of April 5-9, NH Jump$tart volunteers will be meeting with second-graders at select elementary schools throughout the state as part of our “I Can Save!” Tour. During the visits, we will conduct a brief presentation on the differences between needs and wants and will provide each student with a Moonjar moneybox which promotes the concept of save – spend – share.
Our Get 10 Virtual Scavenger Hunt for teenagers concludes this month. Teens who answer all 10 questions in this online quest for knowledge will be eligible to win one of 10 MacBooks that we are giving away! The Quest ends April 10th.
Our LifeSmarts State Champion – Inter-lakes High School from Meredith – travels to Miami Beach representing the Granite State at the LifeSmarts National Championship at the end of April.
Financial education is finally getting some attention. Our children’s future is dependent on their ability to understand the complexity of the modern day financial landscape.
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