Tag Archives: H&R Block. H&R Block Dollars & Sense

2.25-blog

To Venmo, or Not to Venmo: Breaking Down Money Transfer App Technology

As technology continues to make our lives simpler and more organized, it also keeps us better connected to the people around us. This privilege seems more the norm for teens that never experienced life any other way.

The ubiquitous smart phone and its many functions can seem like an unregulated — and perhaps even dangerous — gateway to the vast and abstract entity we call the Internet to a generation that vividly remembers a world where dial up modems dictated the online experience.

The line in the sand seems to be drawn particularly heavy on the topic of money transfer app technology. While Gen Z’ers and the majority of Millennials are very comfortable paying and receiving money via apps that are connected to bank accounts and/or credit cards like Venmo or Square Cash, older generations don’t trust the process, citing potential security hazards.

Are Money Transfer Apps Safe for Teens?

The short answer is yes. But like anything, both online and in the real world, nothing is 100% secure. You could have your account hacked just as easily as you could have your wallet stolen. At least a money transfer app has some safeguards in place to prevent this type of online mugging. The trick is making sure you enable all the security features. Doing that plus watching your transactions closely and keeping the number of connected devices to your account low can mitigate the potential risk.

Which app is the best for my teen?

Depends on the teen. PayPal is a well-established platform that operates with 25 different currencies and utilizes a two-factor authentication system, helping to make it one of the safest. It is essentially an online bank more than a service to strictly route money. Venmo is run by PayPal but is a faster, simpler, more social version. It includes a feed of activity among Venmo users complete with emojis. Teens prefer this platform because of its fun Facebook-like usability. Then there’s Square Cash, which functions in much the same way as Venmo but allows users to receive payments from non-Square Cash users by creating a unique and anonymous $Cashtag.

What about Facebook?

Facebook also provides a money transfer option through its Messenger app, and since many people are already logged on to Facebook over the course of a day, it stands to reason that their version will begin to gain popularity. Facebook is very stringent with its security measures, so there’s not much to worry about in terms of security.

Make sure to weigh out the pro’s and con’s with your teen before they decide to use one of these money transfer services. These services should be used with just as much caution as they would use to protect a wad of money in their back pocket.

2.23-blog

5 Questions to Ask Your Teen before Lending Them Money for a Big-Ticket Item

As children become teenagers and begin growing both physically and mentally, parents begin to find their “little ones” get too big for more than just their clothes. A developing teen with tastes and preferences all their own is a teen who will inevitably want to make bigger, more expensive purchases.

Gone are the days of giving little Billy a $5 bill to spend on comics and candy. Teenaged William is interested in buying a car, and he’s looking to you for financial assistance.

But before you throw a chunk of change right in Billy/William’s lap, it’s important to use this opportunity as a teaching moment. Parents should feel encouraged to lend their kids money and be paid back as part of a financial exercise in credit, lending, and timely payments.

As a parent, you should ask yourself these five questions before lending your teen money for a big-ticket item:

  1. I can’t believe my baby is all grown up!

Technically that’s not a question, but children do grow up fast. Try not to get too emotional… let’s move on to the next question.

  1. Does my teen need this item or is it a luxury good?

While even necessary items can cost a pretty penny, it’s those luxury items teens should really learn to budget for. Responsible adults have to weigh all factors when making purchase decisions, often deciding not to buy a luxury item in favor of necessities.

  1. Will this item help my teen advance their education or career?

If your teen needs an item to advance their education or career, it doesn’t necessarily make it a necessity — luxuries can exist within necessity. But purchases that directly link to income (i.e., car for transportation) or education (i.e., text books) are obligations that should warrant a loan. Just make sure your teen actually uses these items once they’ve been purchased!

  1. Can my teen realistically pay back the loan?

It’s difficult to pay off a loan without an income stream. If your teen doesn’t have a part-time or side job, think about implementing an allowance-for-chores system. This will teach them the value of a dollar. If your teen does have a job, encourage them to start saving some money with each paycheck and begin budgeting for loan payments.

  1. Can I establish a payment process that will actually teach my teen something?

The point of the parent/child money-lending exercise is two-fold: it gives teens a taste of adulthood while introducing them to all the intricacies of money management. The exact process you set up for your teen is up to you. Will you set a payment due date? Will you add interest? It’s all up to you. Remember not to distort the reality of the process though, which can provide your teen a false sense of potential consequences.

2.11-blgo

Valentine’s Day by the Numbers

When throwing around the term “Hallmark holidays,” one’s thoughts will almost certainly land on Valentine’s Day — and for good reason.

With an estimated $19 billion spent in Valentine’s Day retail sales in the United States in 2015, according to the National Retail Federation, it’s understandable if people struggle to find a true meaning in the holiday when it clearly serves as a reliable, if not lucrative, revenue stream for many businesses.

The average person spent $142.31 on gifts in 2015. More alarming for the parents out there, the Valentine’s Day commercial machine is likely targeting teens. According to a survey conducted by the National Retail Federation, more than half (54.9%) of Americans 18 years or younger planned to celebrate Valentine’s Day in 2015. That same survey concluded that on average, men will spend $190.53. For young, impressionable teenage boys who can be blinded by love and pressured by expectations of chivalry, they might find cupid’s arrow ripping a gaping hole in their pockets.

With that in mind, let your teens know an expression of love is not limited to traditional gifts. If they don’t see it that way, here are some numbers you can lay on them so they can at least figure out how to budget for the occasion.

Here are the top five traditional Valentine’s Day gifts and what they cost Americans in 2015*:

  1. Candy: 52.3% plan on buying, $23.86 average cost of purchase, net average in spent billions = $1.690
  1. Flowers: 37.8% plan on buying, $41.55 average cost of purchase, net average in spent billions = $2.093
  1. Jewelry: 21.1% plan on buying, $172.83 average cost of purchase, net average in spent billions = $4.832
  1. Greeting cards: 51.4% plan on buying, $15.32 average cost of purchase, net average in spent billions = $1.047
  1. A night out: 35.1% plan on buying, $77.77 average cost of purchase, net average in spent billions = $3.630

Let’s celebrate the true reason for this holiday’s existence, and not get caught up in the consumerism. After all, true love comes from the heart — not from a store.

For suggestions on affordable ways to say “I love you” this Valentine’s Day, follow our H&R Block Dollars & Sense blog for an upcoming post later this week.

*Source: https://nrf.com/sites/default/files/NRF%20Valentine%27s%20Day%202015.pdf

2.9-blog

Valentine’s Day Gifts Ideas for the Frugal Lover in Your Life

Valentine’s Day is a celebration of love – be it blossoming love, long-term committed love or even the hope of newfound love. For businesses selling Valentine’s Day gifts, the day is more about the love of money.

In 2015, retail sales linked to the February 14th holiday approached $19 billion, according to the National Retail Federation. That number may seem bloated, but when you consider more than half of Americans in 2015 (58.7%) said they would buy gifts for other family members in addition to that special someone, while more than a fifth (21.2%) said they would also buy gifts for their pets, it starts to add up.

Traditional Valentine’s Day gifts like flowers or candy are coincidentally marked up during the time around the holiday. Now that you’re armed with the 2015 financial figures surrounding these staples (hyperlink to previous article, V-Day, Part 1), your teen could save a lot of money (and potentially earn some serious brownie points) by relying on some creativity and thoughtfulness when it comes time to choose a gift.

Here are three takes on classic Valentine’s Day gifts that will save you some cash without skimping on romance:

  1. Make your own card

A greeting card is nothing more than a generic expression of feelings, written by a stranger for nobody in particular, yet intended for anyone and everyone. Not exactly a testament of love. Teens can take this opportunity to write something meaningful to the person or people they care about and design it using whatever artistic skills they possess. (A few crayons can go a long way!) The point isn’t to make a card that Hallmark would sell — it’s about finding inspiration from your Valentine and creating something original specifically for him or her. An honest, heartfelt card makes for an impressed Valentine.

  1. Flowers that last forever

Fragrant bouquets of colorful blossoms are undeniably alluring, but they cannot last forever. At some point, the flowers will wilt and your Valentine will throw them away in the trash. Seems like a harsh ending for a symbolic gesture, even if it is unintentional. One way to avoid that is by making a bouquet of origami flowers. Take an afternoon to learn how to origami, then find some brightly colored paper, or better yet, a magazine or other item that holds significance, and use that to create paper flowers. The time and effort put into this gift will surely be noticed, and unlike real flowers, stand the test of time, sending a reminder of your love indefinitely. Now that’s a symbolic gesture you can work with!

  1. Dinner date

For teens, a dinner out at a restaurant is almost a Valentine’s Day requirement. It’s common teen knowledge that to qualify as an official date, there must be a destination. There’s no way around that. Teens can score big savings on dinner or other events by using services like Groupon or Living Social. If they already bought some deals they haven’t cashed in on yet, then of course this is the perfect occasion. Or maybe you have some Groupon deals of your own just sitting around waiting to be used that you could throw your teen’s way. Then, when they get married years later, you can say that you paid for their first Valentine’s Day date, giving you material to torment your children forevermore.

2.4blog

Meet H&R Block Budget Challenge Scholarship Winner: Angela Lin

If at first you don’t succeed, try, try again! That’s the motto Clements High School senior Angela Lin lives by. She participated in the H&R Block Budget Challenge last year and was determined to win this year. All of her hard work paid off, and she earned a $20,000 college scholarship and learned some useful financial skills along the way. We chatted with Angela to find out what she did differently this time around that made her so successful as well as what she thought of the program overall.

How did you feel when you started the Budget Challenge this year versus when you started your first year?

I was like “I understand this!” In the beginning of the first year I participated, I didn’t take it as seriously because I had no knowledge of personal finance. But halfway through the first year, I saw my rank go up, so I took it more seriously.

Do you see a need for financial literacy education among teens your age?

Oh my gosh, yes; that is a 1,000% yes. My high school is pretty diverse, and we have people that come from all incomes, but the amount of people who spend their money like there’s no tomorrow is shocking.

With so many people in debt in America, I believe financial literacy is really important to teach people how to make their money work for them. With the help of financial literacy and planning your budget, you’re able to make sure you never go in debt and don’t buy things with money you don’t have.

Did you talk about money with your parents when you were younger?

The first time I got exposed to the financial world was through my father when I was in elementary or middle school. My parents came from Taiwan and my mother’s English is not that good and sometimes needs help paying the bills and understanding what things mean.

My dad is currently a professor overseas and my brother got into stocks recently. My oldest brother, who is in business school, will also sometimes teach me about money. But what really got me motivated in business and finances is my teacher Mr. Eppes. He made it sound so fun.

What was your reaction when you found out you won a scholarship?

My heart rate shot up 120%. I couldn’t believe it! I kept refreshing the webpage.

What was your parents’ reaction when you told them you won a scholarship?

My mom squealed she was so excited! It’s taking away some of the burden on her, being the only parent I have here in the U.S. and with two other kids in college. She’s really grateful for this program. But even if you don’t win in this simulation, you win in real life by learning important financial skills.

How has this scholarship changed your post-graduation plans?

I’ve always planned on going to college, but this scholarship will help me put less emphasis on trying to work a 40-hour job during college to pay for my tuition. It’ll minimize the amount of student debt so I can utilize my time better.

What advice would you give to other students participating in the Budget Challenge?

You have to have self-confidence and motivate yourself because if you don’t have those, you’re not going to push yourself to try to succeed.

Do you think you learned financial skills in the Budget Challenge that will help you in the real world?

Yes. Another 1,000% yes. The Budget Challenge actually pushed me to research and calculate and start a budget. It made me get into the habit of making a budget in terms of planning, bills and shopping. It’s a tremendous help. I’ve learned more in the last two years that I participated in the Budget Challenge than I have in my whole life.

Learning financial literacy is fun with the H&R Block Budget Challenge. Registration for 2016-2017 simulations opens in March. For more information on how to get involved, visit HRBDS.org.