Thursday, December 16, 2010

Social Eating: Are friends costing you too much?

by Rikki Bertagnolli, Office for Financial Success Counselor


After successfully maintaining a monthly budget, I was able to analyze where all my money went. Rent, utilities, insurance and other basic living expenses did not surprise me, but the amount of money I spend on eating out, did. Over a period of two months my largest variable expense was eating out. $5.00 here and $3.50 there really add up throughout the month. When I became more conscious of when I spent that large eating out fund, I found that two main factors were to blame. The two culprits that were to blame were; social eating and lack of time.


The amount of social time spent with friends took place in restaurants, or in a student study lounge were food and beverages were available. Even going to the movies constituted spending money on food.


Busy lifestyles, such as being a full-time student, or having a family with children that do extra-curricular activities, or just working a full time job doesn’t leave much time, more or less the energy, to cook three meals a day at home. This makes the temptation of just rushing through the drive-thru at Taco Bell seem pretty reasonable, if not economical at times.


How do we fix these problems? First of all, when it comes to socializing with friends, try hanging out in a place that isn’t a restaurant. Hanging out with friends doesn’t always have to revolve around food. Grabbing a coffee at Starbucks, or a piece of pizza at the student center with a friend just three times a week can add up to almost $20.00! Most college students hang out with their friends on a daily basis, and if these hangout sessions are costing $3-$5, that’s over $100.00 a month spent on coming up with a common interest to see a friend.


Having a busy lifestyle isn’t something that can just be eliminated in one day. Taking ten minutes every morning to pack a lunch, and a few light snacks can help eliminate the temptation to eat out. Those ten minutes packing up some food from home is less time than a drive thru would take. The $5.00 that you spend on a value meal a McDonalds could buy you a week’s worth of turkey sandwiches and granola bars from the grocery store. Not to mention the nutritional value of most fast food places are absolutely horrible, compared to a nice sack lunch.


Eating out with friends, and indulging yourself at Taco Bell shouldn’t be eliminated completely. Drive thru and food places at student unions wouldn’t exist if millions of people didn’t partake in these activities every day. But for those of us who are conscious of where our money is going, we definitely shouldn’t give into temptation multiple times a day, or even once a day. Eating out once or twice a week is what I have limited myself to, and I am saving quite a bit of money and time. I have also strengthened my friendships, since the time we usually spend stuffing our face with food, is now spent talking and exploring the activities that Columbia has to offer!

Wednesday, December 15, 2010

Before you Buy

Have you been bombarded enough yet?  The holiday season is here and the ads, catalogues, e-mails and store displays are out in full force!  My husband, who comes from a business perspective, would say that that’s good marketing.  Companies need to make money or they go out of business.

I, however, get overwhelmed by all of this sometimes…all of the choices and information.  And then many times my initial reaction is that “yes, I want to buy that”—for my kids, friends or family or even for myself.  And then I stop to think, “Do I really want to spend my money on this?  Do we really need more stuff?  What else could I use the money for?”  Or depending on the source of the ad, my thoughts may be more like, “Is this a ‘real’ company? Is this offer legitimate?”

Adults, youth, and children see and hear media and marketing information every day. Although estimates vary, the average American has 600-625 chances to be exposed to ads each day (including TV, radio, internet, etc.)[1].

So how do consumers make sense of all of the information and decide what is a good deal and what is not?  You do not have to make a purchase at that moment.  Take time to ask questions and get the information you need to make a good choice for yourself and your family.

Here are some tips to keep in mind:

Consumer Tips


         If it sounds too good to be true, it probably is.

         Do not be pressured by salespeople into buying NOW. Investigate before you buy or take time to decide if you even want to buy.

         Do not pay for something that is supposedly "free." If you pay shipping or other fees, that’s not free!

         Do not give your credit card, bank account numbers or calling card to strangers by phone, mail or e-mail unless you placed an order for goods or services.

         Before contributing to charities you are unfamiliar with, check them out with your state charity regulator, such as the Attorney General's office.

         A contract worth signing can wait until you’ve taken the time to understand it.

         Always ask for information about the company and clarification in writing about the product or service and prices.

         Hang up when you receive a call offering a fabulous deal over the phone (this is more than likely a scam).

         Guard your social security number. Avoid using it as your driver’s license number and do not carry your card with you in your purse or wallet.

         Con artists look like you and me. Even if they sound like they are your friends, take the time to investigate an offer carefully.


Source: Adapted from Hang Up On Fraud prepared by National Institute for Consumer Education, Eastern Michigan University, 207 Rackham Building, Ypsilanti, Michigan 48197, and Procter, B. and Schuh, W. (2000). University of Missouri Extension Building Strong Families Program, Consumer Beware module.


Tips for Shopping On-line

To determine if an online merchant is reputable and to have a successful shopping experience, look for Web sites that clearly disclose the following information:

         the type of business (e.g., retailer, online auction)

         where it is physically located (address)

         how you can contact the business (e.g., 800 number)

         the cost of products and services

         safeguards for protecting payment information

         the availability of warranties or guarantees

         an estimate of when you will receive an order and a clear explanation of all shipping charges

         a return policy that includes an explanation of how to return an item, get a refund, or make an exchange

Online shoppers can also look for retailers that carry the Better Business Bureau Online Seal. This seal is carried by merchants who follow specific advertising guidelines and agree to submit to binding arbitration to resolve consumer disputes.

Source: Downloaded on December 13, 2010 from


Tips for helping teens be wise consumers


Lucy Schrader
HES Associate State Specialist and
Building Strong Families Program Coordinator
University of Missouri Extension
162 Stanley Hall
Columbia, MO  65211


[1] n.a. (2007). Our rising ad dosage: It’s not as oppressive as some think. Media Matters, 21(3). Retrieved July 25, 2009 from

Friday, December 10, 2010

Your Best Asset

I’m older than most of who read this financial tip and, as I’ve aged, I’ve often been asked about where is the best place to invest?  What is the best investment?


When I was young, nobody seemed to care what I thought about investments. Like most young people, I didn’t have money to invest.  The money I did have I tried to stretch as far as I could because there was not much discretion in my budget, after I paid for food, rent, utilities, and other “must-do” purchases.  Yes, while I was in school, things like cable television began to be marketed but it was much too costly.  The good news is that I could freely dial up through a 300-baud modem and connect to the university computer – if I had a computer.  Yet, the web had not been born and email was a new toy only occasionally enjoyed by a few computer geeks and academics.  Still, as the old Bob Dylan song reminds us, “The Times They Were a Changin’ ”.  They still are.


During these years, I was finishing my doctorate and I admit to taking out a student loan.  Why?  I had a year without university funding and I correctly thought that if I purchased a first generation personal computer it might speed my time toward graduation.  With a computer at home, I could stay up as late as I wanted and work on my dissertation, program in Basic, type my manuscript in Waterloo Script, and complete my data analyses from my tiny, cold upstate New York apartment.  (If you are old enough to know the meaning of Baud or to have used Waterloo Script, you are, like me, one of Methuselah’s siblings.)  Yes, it paid off. I finished my degree and I started work at the University of Missouri within the year.  Yet, I digress…


The best investment you can make is in the only asset over which you have control.  This asset is unique.  No one else has it.  As you invest more in this asset, you never really know how that capital will mix with your past investments and create something entirely unique and highly marketable.  New capital is not simply added to existing capital, it is exponentially multiplied.  The asset is you.  The best investments you can make are investments in yourself.


If you can accept this, what are my tips to you?


First, keep making investments in yourself.  Additional education, coupled with regular doses of exercise, work together to keep your greatest asset prepared for your future. 


Second, do something to get a return on your investments.  If you don’t have a job and you want a job, go find a job.  If you are a student, a good time to do this is during your holiday break.  Do this even if the job is for next summer.  Who would you want to hire, the person who is looking in December for a job in June or the person that shows up discouraged in July, since they have waited past the last minute? If you don’t know what job you want, get some help.  What are your goals? What are your talents? What are your passions in life? What excites you?  Make a list and think of jobs that combine these positive strengths.  Read a book like What Color Is Your Parachute.  Put the suggestions into practice.


Third, along with your inventory of yourself, write a resume targeted to the job you want. Have others read your resume.  Make changes.  Have others read it again.  Make more changes. If you need help writing a professional resume, get some help.  It will be time and money well spent.  If your resume does not reflect the skills you need to achieve your goals, work on your skills and experiences….even if you have to pay for them or not be paid to receive them.   Make yourself the person you want to see in the mirror.


The younger you are, one of the best suggestions I have is to call people who are successful in the line of work you want to enter and ask them if you can interview them about their work.  You may be surprised that many professionals welcome the opportunity to help young people and most successful people like to talk about themselves!  When you go to the interview, dress for the job you want, make sure you have your resume, and be prepared for the interview.  (For a list of suggested questions, please see the attachment to this email.)  It often happens that the interview of them turns into an interview of you.  If the interview doesn’t turn toward you, do not despair.  Just go to the next interview, the next interview, and the next interview, until you find your mentor.  Yes, it is ok for you to ask them what you could do to make yourself more attractive as an employee.  You will be surprised at how more mature” people want to help young people WHO WANT TO BE HELPED!  (Have you ever thrown a life preserver to someone who wasn’t asking for help?  Me neither.)


Finally, and as I finished typing the preceding paragraph on December 9th, a student knocked on my door.  He handed me his semester paper.  It was due on November 17th.  Yesterday, another student handed in an earlier assignment.  It was due on September 8th!  Of course, this reminds us that the market looks for signals of the quality of the human capital we have built. No one is guaranteed passage on the road to financial success.  The ditches of that road are filled with those that have tried and failed.  Others have taken different roads to various destinations and everyone is free to change the road they are on.  Whatever road you choose, however, travel it well.  And, along the way, take time to enjoy the passage of time.


Happy Holidays.

Thursday, December 2, 2010

The Cost of Overscheduling our Kids

As I was contemplating ideas for the Financial Tip this week I came across an article on KSL News titled “Are we overscheduling our kids?” by Nadine Wimmer.  At first I didn’t expect it to have anything to do with finances, but was interested in the topic as this is a discussion my wife and I have on a regular basis (we both feel strongly that we want our kids to enjoy their childhood and not be overscheduled).  When I got into the article, though, I found it has very strong financial undertones. 


The story follows the Nelson family – mom, dad and six children.  “The Nelsons' daily routine gets them heading out the door for 6:45 a.m. cheerleading practice. At 7:30, the trip to different schools for different kids begins, which includes a range of AP classes, pre-college classes and preschool.


“Add in full-time work for mom and dad on different days.


“After school, several kids take soccer, one has concert choir, one has dance classes, one has sewing classes. They're even trying to get the baby of the family signed up for swimming lessons.”


The Nelson’s don’t share how much they are spending on all those lessons (but it’s got to be a few hundred dollars for all those different lessons), but share some additional costs:

·         $720 a month in gas running around to all the different lessons and to work

·         $80 a month in snacks and drinks at the gas station

·         $240 a month on fast food (it’s difficult to cook at home when you are running around so much)

Three of the children had this to say about the schedule:

"It's really stressful at times." – Breann

"It's really overwhelming." – Hannah

"It's just frustrating because I need help with my homework and my mom is usually at work or running people somewhere." – Chloe

We lived in Korea for a year and saw some of those children starting at 5:30 in the morning and being scheduled for one thing after another (school, Tae-Kwon-Do, after school English, math and science classes, then a few hours of homework each night).  Many of them were sad and stressed out, and really just wanted more time at home.

If you find that your budget is strapped or you don’t have enough time as a family, take a look at your schedule.  Are there some things you can cut?  Looking back on my childhood some of my fondest memories are of simple things we did as a family – going camping, going to the zoo, having a family movie night with popcorn, or doing any number of other simple things.  We took swimming lessons in the summer, but we would all go together and got to enjoy that time as a family. 

The Nelson family could probably easily cut their gas bill in half and cut way back on the amount spent on snacks, drinks and fast food.

Read the full article here:

Ryan H. Law, M.S., AFC

Department of Personal Financial Planning

Office for Financial Success Director

University of Missouri Center on Economic Education Director