Dollars & Sense Blog

There’s something for everyone. News, advice, scholarship information, curriculum – you’ll find it all here. Don’t forget to check back for the latest in personal finance content.

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Spending Your First Bit of Hard-Earned Cash [VIDEO]

Do you remember your first job? Of course you do! But do you remember how you used the money you earned? H&R Block Dollars & Sense asked parents and teens about how much they earned, and if they made smart financial decisions with their earnings. How does your experience compare? Watch the video to hear what people had to say.

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Money Savvy Tips for Planning the Ultimate Vacation

How do we love thee, summer? Let us count the ways: warm weather, no school, no homework and vacations!

But before you pack up a suitcase with bathing suits, sandals and sunscreen, consider this: the average vacation expense per person in the United States is $1,145. Sorry to rain on your seasonably warm and sunny parade.

With Memorial Day right around the corner, this is no reason to stay cooped up at home in front of the AC; just an excuse to get creative and frugal with your vacation plans. Follow these savvy tips to plan the ultimate vacation this summer without breaking the bank:

Create an overall vacation budget

A budget is kind of like the Clarendon filter of money management — that is to say it works every time. Check out how much money you have saved and then determine how much of that you are willing to spend. This should without a doubt be your first step, as it will dictate where you can go and for how long.

Create a food budget and stick to it

Yes, another budget. It’s important to consider this separately because it sometimes gets overlooked — and also because food is sort of essential to keep on living. Meals can be the activities in and of themselves when on vacation, and they can also simply be fuel for a larger activity. Decide how many times you want to eat out so you can afford it. The other meals you can pack up and eat while you explore your new surroundings.

Look for alternative accommodations

Hotels aren’t the only place to lay your head at night. See if a distant relative or long-lost friend lives in area you’re visiting. Hostels and rooms on Airbnb also provide much cheaper options. And last but certainly not least, consider the old tent and sleeping bag. Camping out is a fun way to spend a vacation — and it will make your vacation seem like an adventure!

Keep an eye out for deals

If you’re flying, make sure you use all the tools at your disposal to find the cheapest flight. It’s also possible to find package deals or guided tours that combine all the possible expenses of a trip into one fee. It may seem like a large amount of money up front, but it usually ends up being cheaper than paying for everything separately. Plus, it helps you stick to your budget.

Off-the-grid “staycation”

As much as you may want to travel to a distant land or tropical locale, remember that vacations serve as a great way to spend quality time with family and friends. Exploring a new area that’s close by will still be fun with the right people, and it won’t send you into debt until next summer. Take it a step further and go “off the grid,” and try not to check your social media notifications or check email.

So get out there and make your summer frugal and fun! Before you know it, it’ll be fall, and we’ll be packing our backpacks to heading back to school.

5.19 blog

What Do I Need to Know About Credit Reports?

Credit scores, credit reports, credit bureaus — you hear these terms thrown around on TV commercials, but what do they really mean for you?

Think of it like this: your credit score is kind of like a quick snapshot that shows lenders your financial reliability. It affects your ability to get a loan and determines how much you will have to pay to borrow money.

The most reliable and widely used credit score is the FICO® score. It is used by 90 percent of lenders, so this is the credit score you should always look to pull. FICO scores range from 300-850 — the higher the score the better.

Where can you find your credit score?

That’s where the credit report comes in. The Federal Trade Commission allows every person in the United States one free copy of their credit report every 12 months. That includes one report from each of the three nationwide credit reporting agencies — also called credit bureaus — which are Experian, TransUnion and Equifax.

What’s the difference between the three bureaus?

Each bureau serves the same function (to keep information about your credit history) but they remain independent of each other, sort of as a way to keep the whole process honest. They generally all have the same info on you but not always. That’s why the individual credit scores can differ from one another. You can pull all three reports at once to get the clearest picture of your overall credit health, or you can stagger them over the course of the year to see how your credit score has fluctuated and keep an eye on accuracy.

Where should I pull my credit report?

The only authorized website where you can obtain your free credit report is annualcreditreport.com. Since you will be providing personal data like your social security number, it’s imperative that you use a trusted site for this service and this resource is recommended straight by the US government.

Keep in mind that you can only pull your credit report if you have accumulated enough information. That means you must have at least one account that’s been opened for a minimum of six months and at least one account that has reported to a credit bureau within that timeframe.

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Meet H&R Block Budget Challenge Scholarship Winner: Joseph Cain

Joseph Cain, a student at Paxon School for Advanced Studies, was determined to win a scholarship through the H&R Block Budget Challenge. He had played last year, but this year Cain made sure he paid his bills, stuck to a budget and took the quizzes. The hard work paid off and this year, he won a $20,000 scholarship!

See what he said he learned from the H&R Block Budget Challenge simulation.

Do you think your peers are financially literate?

I definitely don’t think they are. I talk to my friends a lot about finances and they recognize they don’t really know a lot. Recently, my friend blew his car transmission and was talking to his dad about how he was going to pay for it; I asked if they had a certain type of insurance to cover it because it would help fix that. Turns out he’d have to pay a lot less if they did have it.

What kind of financial education or background did you have prior to taking the Budget Challenge?

I had a little because I’ve been participating in Ms. Loggie’s LifeSmarts club since I was a freshman. Also, my dad works in the financial industry so he keeps me knowledgeable on the subject.

Do you talk to your parents about money ever?

I do. My dad and I talk about it sometimes if the conversation comes up. My parents are really informative.

What’s the best piece of financial advice you’ve gotten from your dad?

He’s taught me that it’s really about trying to stay out of debt, but it’s also about managing the risk and reward when spending your money.

 

What did you think when your teacher introduced the H&R Block Budget Challenge simulation to your club?

Originally last year I thought it was interesting. I didn’t think we had any chance of winning a scholarship or grant this year so I wasn’t excited initially. In the end I’m glad we did it!

What was your motivation for participating in the simulation?

My whole class was actually in it together, helping and motivating each other along the way. It was a team effort.
What was the most important thing you learned from the Budget Challenge?

The most important thing I learned is that there’s going to be a lot of unexpected things that happen to you along the way so it’s important to be prepared for any circumstances.

How did you react when you found out you won a scholarship?

The day before I was in position 30 and so I accepted that it was a bit too far off for me to win. But the next morning Ms. Loggie called me and told me to look at the scores. I was really surprised. I kept checking it for the next couple days because I couldn’t believe it!

What are your plans for after high school?

I’m planning on going to University of Central Florida to study political science and then go to law school after that.

How has winning the scholarship impacted your post-grad plans?

It’s a large sum of money and since I plan on doing extra schooling after I get my bachelor’s degree, it’s really going to help me pay for it.

Do you think the skills you learned in the Budget Challenge will be beneficial to your real life?

Absolutely. The simulation is pretty similar to real life. No matter who you ask, they’ll say it’s pretty accurate and can teach you so many lessons.

What advice do you have to other students who might take the Budget Challenge?

You have to be prepared and just look ahead and figure out when you have to pay certain things so you’re never caught off guard with bills.

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Meet H&R Block Budget Challenge Scholarship Winner: Tuffa Said

Through the H&R Block Budget Challenge learning financial literacy is both fun and applicable to real life! If you don’t believe us, just ask Paxon School for Advanced Studies senior Tuffa Said.

By paying his bills on time and being financially savvy, Said climbed to the top of the ranks in the simulation and won a $20,000 college scholarship. He is also part of the Life Smarts club coached by Ms. Kathryn Loggie, which won a $5,000 classroom grant.

Read below to learn more about his experience.

Did you have any knowledge about managing money before participating in the Budget Challenge?

I had a very small amount of financial knowledge before the Budget Challenge. I mostly learned what I knew from the Life Smarts club and my teacher Ms. Loggie.

Do you ever talk to your parents about money? If so, what kind of things do you talk about?

I’ve started to do it more recently. Since I’m going to the university, we talk about tax returns, what forms are required and how to fill out the FAFSA correctly.

Was this your first year participating in the Budget Challenge?

No, I participated last year as well. This year I made sure I paid my auto insurance!

When you started the simulation, did you think you would win?

At first I was really determined to win. Then, in the middle I realized that the bills were starting to appear and that kind of threw me of. I really couldn’t believe it when I saw that I was winning toward the end of the simulation!

What would you say was the biggest thing you learned by participating in the Budget Challenge?

To pay my auto insurance on time! But fortunately, I don’t pay auto insurance in real life, my parents pay it for me.

How have you taken the financial skills you learned and applied them to your real life?

I’ve encouraged my parents to pay their bills on time! It also helped to ensure that I don’t go into credit card debt.

Where do you plan on continuing your education?

I plan on going to the University of North Florida to study electrical engineering.

How has the scholarship changed your financial outlook when it comes to college?

The scholarship will help me focus on my schoolwork rather than having to worry about how I’m going to pay for school.

Now that you’re a financial whiz, do you plan on passing along your wisdom to your friends?

No! I want to keep it all to myself (laughs).

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Meet H&R Block Budget Challenge Classroom Grant Winner: Ms. Kathryn Loggie

Teachers often work double-duty to make sure teens are well-equipped with the knowledge they need to succeed. One example is Paxon School for Advanced Studies teacher Kathryn Loggie.

In addition to teaching grades 9-12 journalism and computer science, Loggie is the supervisor for an after school club called LifeSmarts, where students learn about life skills, including finance. It was in this class that Loggie introduced her students to the H&R Block Budget Challenge. Because of her efforts three students walked away with $20,000 scholarships and Loggie won a classroom grant! See what she had to say about the program.

Do you think the students in your community are well-versed in money management?

Definitely not. Teens today need to know about credit, credit cards and how easy it is to get into debt. Students preparing for college need to know about student loans, how they’re going to pay them back, and the implications of not paying them back.

How did you find out about the H&R Block Budget Challenge?

I got an email last year about it that sounded intriguing. Finance is a subject we’ve been covering in the LifeSmarts club for a number of years. We thought we’d give it a try and we did OK the first year. I was disappointed none of my students last year won scholarships, but we made up for it this year!

How did your students enjoy the simulation?

They really enjoyed it. They liked having that persona in the simulation where they had to guess what they were going to do and spend their money on. A lot of students would say, “Can you believe my person spent that much on entertainment?!”

Have you found that your students have more financial-related conversations after taking the Budget Challenge?

Absolutely. The students can conduct an intelligent conversation on personal finance with anyone now. Sometimes we have guest speakers come in and I tell them that the students really understand it at a high level and don’t need to talk down to them.

As a teacher, what did you enjoy about the simulation?

The quizzes were great. Some of them were very difficult, but we worked through the quizzes and the students really learned from them.

How did you react when you found out your class had multiple winners?

I had students who participated both years, but as far as getting to the top, I don’t know if we even thought that was possible given the number of students who participated in the Budget Challenge. We were so pleasantly surprised when we had three individual scholarship winners!

Would you recommend the Budget Challenge to other teachers? Why?

Just look at the benefits in terms of the scholarships and grant money—that alone is enough to participate. We’ve gotten a lot of publicity at the district level about this too. I’ve even gotten emails from parents asking how they can get their son or daughter involved. It’s well worthwhile!

What do you plan to use the grant money on?

I would like to take the students on field trips, like to the Jacksonville branch of the Atlanta Federal Reserve Bank. I’ll probably also use it to buy additional resource materials for the students.

4.26-blog

5 Ways to Use Your Tax Refund Wisely

Tax season gets a bum rap.

While tax day is often associated with having to pay the government, most people actually will receive a check compensating for money they’ve overpaid in taxes throughout the previous year. In 2015, the average refund was $2,893.

Adults usually direct this tax refund toward boring stuff like bills, but teens are free to spend this lump sum of money as they please, right? This is a free country, so technically, yes; but we suggest applying a bit of wisdom when it comes to your refund check.

But before you can start planning what you’ll do with your sweet, sweet cash, you should first know if filing a tax return is even necessary. Once you’ve got that straightened out, follow these five suggestions on how to use your tax refund wisely:

  1. Save for college

Nearly 70 percent of students are taking out loans to pay for college, and on average those loans amount to $33,000 per student. When you account for the interest, many people continue paying off student loans well into their thirties. By starting your own savings now, you could avoid or diminish the realities of this inconvenient, postgraduate truth. 

  1. Pay down debt

The average U.S. household carries $15,762 in credit card debt. While you shouldn’t have nearly that much as a teen, you’d be surprised how quickly it can pile up. If you have a credit card with even a small amount of debt, using your refund check to pay it off is a smart move. Not only does it help you prevent the dreaded black hole of debt, it also improves your credit score — win-win.

  1. Start an emergency fund

The definition of an emergency is a serious, unexpected situation, which is why you ought to plan for one ahead of time. If you don’t have money saved, the effects of a serious emergency (e.g., a medical emergency) can be compounded. Only 51 percent of Americans have enough cash in their emergency accounts to clear themselves of credit card debt. Be like the other 49 percent.

  1. Buy something useful

This may come as a shock, but when you move out of your parents’ house you lose the use of all their things. From food to paper towels, these are things you’ll need to budget for as an adult. Even more pressing is the fact that items you need like cars and computers tend to need repairs and you’ll have to cover the costs. Use your refund check now to upgrade any item you simply will be lost without.

  1. Invest

What’s the only thing better than having money? Making more money with it! Investing is no doubt complicated, but there are very safe ways to invest money. Not only will it boost your bank account, it will also prevent you from spending it frivolously.

For more info on jumpstarting a better tomorrow with your refund check, read this post from H&R Block Talk.

4.19-blog

Can You Pass This Financial Literacy Quiz?

Think you know everything about how to manage money successfully? For example, do you know the difference between different types of bank accounts? What about the fees associated with a credit card? Take this financial literacy quiz and prove it!

Q1: Uh oh, you forget to pay your cell phone bill and get a late notice. What kind of repercussions can you likely expect?

  • A. Your phone will be shut off
  • B. You’ll be charged a late fee
  • C. Your next bill will be double the price

Q2: Which type of account allows you to make an unlimited number of withdrawals without a fee?

  • A. Certificate of deposit
  • B. Checking account
  • C. Savings account

Q3: Your auto insurance plan has a $600 deductible. Driving home from work, you get into an accident and cause $800 worth of damage to your car and $1,500 to the other person’s car. How much of the cost do you have to cover?

  • A. $200
  • B. $1,700
  • C. $600

Q4: Which of the following is incorrect about using an ATM?

  • A. ATMs are usually open 24 hours a day.
  • B. You can get information about your account at an ATM machine.
  • C. You can get cash anywhere in the world without a fee.

Q5: What does APR stand for?

  • A. Annual Perpetual Rate
  • B. Annual Percentage Rate
  • C. Annuity Per Refund

Q6: How much should be in your emergency fund?

  • A. $1,000
  • B. Two months worth of rent or mortgage payments
  • C. Six months worth of living expenses

Q7: What is the recommended max percentage of your take-home income you should spend on monthly housing expenses?

  • A. 30 percent
  • B. 45 percent
  • C. 50 percent

Q8: You earn $8 an hour at your job at the mall and worked 11 hours this pay period. When you get your check, you notice it’s less than the $88 you expected. Why is that?

  • A. Your employer has the right to withhold money from your paycheck at will.
  • B. The store you work at is allowed to take money out at will.
  • C. State and federal taxes have been taken out of your paycheck.

Q9: Student loan borrowing is at an all-time high, and so is the default rate on making student loan payments. What kind of relief should you expect on your student loans if you file for bankruptcy?

  • A. Significant relief—all debts are wiped clean so you can have a fresh start.
  • B. Moderate relief—usually payments and amount owed are adjusted to match your ability to pay.
  • C. No relief—it’s extremely rare to get any relief for student loans from bankruptcy

Q10: What does a FICO score determine?

  • A. Your credit rating
  • B. Your interest rate
  • C. The fee you will be charged when taking out a loan

Check your answers below! How’d you do? Do you need to brush up on your financial literacy knowledge or do you have what it takes to have a successful financial future? Let us know in the comments section.

 

 

 

Answers:

  1. B
  2. B
  3. C
  4. C
  5. B
  6. C
  7. A
  8. C
  9. C
  10. A