“Don’t worry that children never listen to you; worry that they are always watching you.”
– Robert Fulghum
Shawn B. YoungNHSA Parent ConferenceDecember 9th -13th 2011
What do you want to get out of this class?
Most Common Reasons1. Want to “stick to a budget”
2. Want to “save”
3. Want to improve their credit
4. Want to be less stressed about money
Why People Learn1. Repetition (ex. ABCs, 123s)
2. Applicability (ex. Driving)
3. Interest (ex. Favorite movie quotes)
Bootstraps and Head Start
Short-Term Stress Can Affect Learning and Memory
•It has been known that severe stress lasting weeks or months can impair cell communication in the brain’s learning and memory region…
•A new study shows that short-term stress lasting as little as a few hours can impair brain-cell communication as well.
ScienceDaily (Mar. 11. 2008)
Rule #8: Stressed brains don’t learn the same way.
•Your brain is built to deal with stress that lasts about 30 seconds. The brain is not designed for long term stress when you feel like you have no control.
•Stress damages virtually ever kind of cognition that exists. (Memory and executive function, motor skills, immune response, ability to sleep)
John Medina, Brain Rules
Rule #8: Stressed brains don’t learn the same way.
•You have one brain.
•The same brain you have at home is the same brain you have at work or school.
•The stress you are experiencing at home will affect your performance at work, and vice versa.
John Medina, Brain Rules
Money Main Cause of Stress in Americans
•“Most Americans say that money is their primary source of stress, according to a survey by the American Psychological Association.
•The APA found that 75% of Americans consider money their biggest stressor…”
ABC News Radio, 2011
What is Money?1.
2.
3.
4.
5.
6.
7.
What is Money?•Money is simply a tool
What is Credit?1.
2.
3.
4.
5.
6.
7.
What is Credit?•Credit is trust
Available credit
Promise to pay later
What is an Asset?1.
2.
3.
4.
5.
6.
7.
What is an Asset?•An asset is simply something of value to
you
Tangible
Intangible
house
car family
health
1.
1. Azoreg
Asset Building Continuum
Asset Building ContinuumTime
Time
What is a Personal Value?1.
2.
3.
4.
5.
6.
7.
What is a Personal Value?•“Ideals by which you live your life.”
Affection
Growth
Community
1.
1. Frank Wouters
1.
Your Personal Values• Please circle your top ten Values from the
list Achievement Advancement/Promotion Adventure
Affection (love & caring) Arts Problem solving
Change & Variety Relationships Community
Compassion Cooperation Competition
Country Creativity Decisiveness
Democracy Faith Economic Security
Education Effectiveness Efficiency
Ethical practice Excellence Excitement
Fame Financial Gain Friendships
Growth Family Fun
Helping others Public service Health
Independence Influence Harmony
Peace Integrity Intellectual Status
Job security Knowledge Leadership
Location Loyalty Meaningful work
Money Nature Honesty
Personal Development Freedom Physical Challenge
Pleasure Power Authority
Privacy Recognition Religion
Reputation Responsibility Security
Self-Respect Serenity Stability
Status Time Truth
Wealth Wisdom Acceptance
Balance Cleanliness Courage
Commitment Dedication Humor
Consideration Joy Mercy
Fairness Tolerance Patience
Selflessness Flexibility Forgiveness
Kindness Convenience Control
Sobriety Spirituality
Personal Values•List your top five personal values in no
specific order
Personal ValuesTop Five Values
1.
2.
3.
4.
5.
Top Five Values
1.
2.
3.
4.
5.
Are Values Fluid?• Then vs. Now
EducationFunFreedomKindnessCourage
Family Job
Security Health Patience Influence
Personal Behavior•List one personal behavior that supports
each of your above listed values
Personal Value: Health
Personal Behavior: I exercise 3 times a week
Personal Behavior•List one personal behavior that
contradicts each of your above listed values
Personal Value: Health
Personal Behavior: I ate a dozen donuts this morning
WHY ARE WE TALKING ABOUT VALUES?
DESIRED RESULT
BEHAVIORPERSONAL VALUE
Personal Priorities•If you lost your income, what would your
priorities be?List of expenses Your Priorities
Savings
Food/Nutrition
Housing
Medical
Transportation
Health Insurance
Car Insurance
Life Insurance
Clothing
Household Items
Convenience Foods
Entertainment
Other insurance
Grooming & Hygiene
ElectricityWater
Gas
CableInternet
Phone
Taxes
Tithing
Donations
Miscellaneous
Debt
Childcare
Pet Care
Restitution
Education
Child Support
Personal Priorities•What are your top five personal priorities?
Top Five Priorities
1.
2.
3.
4.
5.
Top Five Priorities
1.
2.
3.
4.
5.
Wants and Needs•Make a list of your current wants and
needsWant
1.
2.
3.
4.
5.
Need
1.
2.
3.
4.
5.
What is a Need?1.
2.
3.
4.
5.
6.
7.
Wants and Needs•How do you determine what your wants
and needs are?
•What are some influences on determining your wants and needs?
Wants and Needs•What is a need?
Wants and Needs•How do you determine what your wants
and needs are?
“I want a new car.”
“I need a new car.”
Wants and Needs•When a “want” turns into a “need” it adds
stress
“I want new shoes.” “I need new shoes.”
+ stress
The Message in Our Head•Video: Stephen Colbert
The Message in Our Head•Marketing:
•Advertising:
All strategies used to get you to willfully give up your money
One strategy used to get you to willfully give up your money
The Message in Our Head•How much is spent on marketing per
year?
$4 000, 00 0, 000•and they intend to get their money back
0,0
The Message in Our Head•“By the time we reach the age of sixty-six, most of us will have seen
approximately two million television
commercials. Time-wise, that’s the
equivalent of watching eight hours of
ads seven days a week for six straight years.” (Buy-ology, p. 37)
Message in Our Head•Create a want where none existed
•Turn a want into a need
“You know, those shoes are pretty nice, I want them.”
“Those shoes are so nice, I need them for this weekend.”
Message in Our Head• Big Pharma Spends More on Advertising Than
Research and Development
• Estimates are as high as $10 billion spent on advertising all types of food and beverages to America’s children and youth. (Only 5% are for healthy foods/beverages such as dairy products and fruit juice. None are for fruits and vegetables.)
• Kids in the United States see 40,000 commercials each year
3. American Academy of Pediatrics
2. Colorado State University
1. Science Daily, York University
Message in Our Head•Under the age of 8, most kids don’t
understand that commercials are for selling a product.
•Under the age of 6, unable to distinguish program content from commercials.
* American Academy of Pediatrics
Neuromarketing•“…Our irrational minds, flooded with
cultural biases rooted in our tradition, upbringing, and a whole lot of other subconscious factors assert a powerful but hidden influence over the choices we make.” Martin Lindstrom in his book “Buy-ology ”
Neuromarketing•Marketing to the subconscious
Example: At the grocery store
Neuromarketing•Video: Product Placement
The Impact
Personal Values & Self Image
Thought
or Behavior that is not in alignment with Personal Values
Cognitive Dissonance
Cognitive
Dissonance
Justification
Rationalizati
onDenialBlame
Self Imag
e Relief
DESIRED RESULT
BEHAVIOR
PERSONAL VALUE
JustificationRationalizati
onDenialBlame
80% OF SPOUSES LIE ABOUT SPENDING
* Chris Friedrich
Break Time!
“Mother Nature, in her infinite wisdom, has instilled within each of us a powerful biological
instinct to reproduce; this is her way of assuring that the human race, come what may, will never
have any disposable income.” –Dave Barry
What is Income?1.
2.
3.
4.
5.
6.
7.
Income is…• All the resources that an individual
receives.Paycheck Energy
Assistance
FoodAssistance
$20 from Family Member
Income• What is the difference between gross and
net income?
Income• Gross Income: Money before taxes,
deductions and benefits are taken out.
• Net Income: Final amount of money after taxes, deductions and benefits are taken out.
Income• There is a value attached to the taxes,
deductions and benefits that are taken out of your gross income.
Gross Income Value Net Income
Taxes• Taxes are payments made to federal,
state and local governments in return for government provided services.
Taxes• Examples of services provided:
Head Start Police and fire departmentsWater and sewage infrastructuresHighway construction and maintenance HospitalsPublic education
Benefits and Deductions Health Insurance401(k)Stock OptionsFlexible Spending AccountsExpense Accounts
•If our gross income is $1,000, how much can we afford to spend?
•What is it called if we spend (our expenses) more than we make (our income)?
Income
Debt•How is it even possible to spend (our
expenses) more than you make (our income)?
Debt•What are some of the major causes of
debt? Credit CardsMortgagesCar LoansHealth CostsStudent Loans
Consumer Debt•As of September 2011 Americans
amassed
$2, 000, 00 0, 0002,5in personal consumer debt*
*Federal Reserve
4
Consumer Debt•Amount of credit card debt:
$749,100,000,000
*Federal Reserve
Consumer Debt•609.8 million credit cards in US
•Average credit card debt per household with credit card: $15,799
•Average APR on credit card with balance on it: 13.10% as of May 2011
*Federal Reserve
Consumer Debt•Amount of student loan debt:
$958,402,279,543
*Fastweb and FinAid
Consumer Debt•The amount of student loans taken out in
2010 was over $100 billion.
• For the first time ever total loans outstanding will exceed $1 trillion this year.
*Federal Reserve*US Department of Education
Consumer Debt•The amount of mortgage debt: $10,300,000,ooo,ooo
*Bureau of Economic Analysis
In Summary•Marketers spent:
•Consumer’s DEBT:
$400,000,000,000.00
$2,452,000,000,000.00
US National Debt• The outstanding Public Debt as of November 21st
2011:
$15,054,572,978,153.34
•The National Debt has continued to increase an average of $3.99 billion per day since 2007
*National Debt Clock
US National Debt•The estimated population of the US is 311,713,697 so each citizen’s share of this debt is $48,296.15
• Number of US Income Taxpayers is 112,583,135 making the share of debt rise to $133,719.61
*US Census*National Debt Clock
That’s a serious amount of debt…
Financial Stress•Video: Stress
Financial Stress•Finances play one of the biggest roles in a
person’s day-to-day stress.
•Stress, as it turns out, is one of the biggest factors in a person’s health.
•And health is one of the largest burdens on personal finances!
Money Main Cause of Stress in Americans
•“Most Americans say that money is their primary source of stress, according to a survey by the American Psychological Association.
•The APA found that 75% of Americans consider money their biggest stressor…”
ABC News Radio, 2011
Divorce
•A 2009 study found that couples who reported disagreeing about finances once a week were over 30% more likely to get a divorce than couples who reported disagreeing about finances a few times a month.
Jeffery Dew, Utah State University
Domestic Violence
•“An abuser will often restrict a victim’s outlets, forbidding the victim to maintain outside employment, friends or family ties.
•Abusers also limit a survivor's options by not allowing access to checking accounts, credit cards or other sources of money or financial independence.”
The National Center for Victims of Crime
Domestic Violence
•The survey polled 672 domestic violence shelters across the US. The top attributers to the rise in abuse were:
73% financial issues48% job loss62% stress
Mary Kay Truth About Abuse Survey 2011
Financial Stress• Unhealthy Coping Behaviors
• Less Money for Self-Care
• Lost Sleep
• Unhealthy Emotions
Acute vs. Chronic Stress• Acute Stress: is experienced in response
to an immediate perceived threat, either physical, emotional or psychological.
Stress and the Body• Stress causes the body to release the
hormones Adrenaline and Cortisol and other stress related hormones.
Stress and the Body• Increased levels of Cortisol, Adrenaline
and other hormones produce:
An increased heart rateQuickened breathing rateHigher blood pressure
Acute vs. Chronic Stress• Chronic Stress: is a state of ongoing
physiological arousal.
• Over time this can wear down our bodies and cause us to become ill, either physically or emotionally.
• We were built to handle acute stress, not chronic stress.
Stress and the Body• The CDC estimates that 80% of all
medical expenditures are stress-related.
Study Links Medical Costs and Personal Bankruptcy
•“Harvard researchers say 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems – and 78% of those filers had insurance.”
Bloomberg Businessweek, 7-4-09
Spending and Stress• Researchers say that it takes as little as
2.5 seconds to make a purchasing decision.
•“When we first decide to buy something, the brain cells that release dopamine secrete a burst of good feeling and this dopamine rush fuels our instinct to keep shopping even when our rational minds tell us we’ve had enough.” *Michael Lindstrom
*Moneywise, 2010
Short vs. Long Term
Short Term
Long Term
dopamine
cortisol
Stress• What is stress?
1.
2.
3.
4.
5.
6.
Stress• What causes stress?
1.
2.
3.
4.
5.
6.
How Stress is Defined and Measured:• Aroused physiological response to stress
• Stressor must be “perceived” as aversive
• Person must not feel in control of stressor
*John Medina
Stress• Is the physical and psychological product
of not accepting the perceived current situation or moment as it is.
Stress• How can a realistic picture and
understanding of money and finances help alleviate stress?
“The biggest part of successful stress management involves
getting control back into your life.”
* John Medina
Opportunity Cost• What is opportunity cost?
Opportunity Cost
The $15 spent on pizza can no longer be used for credit card bill
• Example:
Opportunity Cost
$15 Loss of payment
Late charges
Interest feespizza
Asset Building ContinuumTime
Time
Time• What is time value?
Time• “Time Value” means how much time it
takes to accumulate money.
Time Value
$500 $10 50 hours
• Example: You make $10/hour and rent costs $500
Exercise• Apply the concept of “time value” to one
of your expenses.
Time Value• “Time Value” can also include the
opportunity cost of the things you are giving up.
• Example: In order to earn more income you are giving up time spent with your family.
Making Change•“If we keep doing the same thing we’ve
always done, we can expect to get the same things we’ve always got.”
•Definition of Insanity: doing the same thing over and over and expecting different results.
Stages of Change1. Pre-contemplation
2. Contemplation
3. Planning (Learning)
4. Action
5. Maintenance
6. Relapse
Credit and Risk Management
Savings• What does it mean to save?
Savings is…• An increase in resources kept through
time
Consumption is…• The usage of resources
Dissaving is…• the consumption of assets!
Financial Management • Video: SNL
“Control is a powerful influence on the perception of stress.”
* John Medina
The Spending Momenttm
“The Spending Moment”•Your actions will reflect exactly what your
values are in that particular moment
= Fun = Cleanliness
“The Spending Moment”•Requiring yourself to ask for a receipt will
make you aware in that moment that you are willfully allowing money to leave your possession
The money isn’t getting up and walking away by itself
“The Spending Moment”•Once you are conscious of your spending,
you can begin to determine if your spending is in alignment with your values.
•Once you are conscious of your spending, you can begin to modify that behavior.
Budget• What is a budget?
1.
2.
3.
4.
5.
6.
Budget• A budget is simply a plan.
• Plans are important in pursuing goals. May Budget
Rent $475Electricity $30Utilities $45Car Insurance $120Health Insurance $150Cell Phone $50Internet $30Groceries $350
ToolsEnvelope
Spending JournalDATE ITEM or PAYMENT METHOD
06/01 RentSoda @ convenience store
$350$.79
Check, Credit CardCash, Money Order
Income and Time Value
Income Source
Gross
(Total amount)
Taxes, Insurance & Benefits
Net
(Gross minus taxes, etc.)T.V.
1.
2.
3.
Expenses and Time ValueExpenses Expected Actual Difference T.V.
Savings/Investments
Food
Housing
Medical
Transportation
Health Insurance
Car Insurance
Life Insurance
Clothing
Household Items
Convenience Foods
Entertainment
Other insurance
Grooming/Hygiene
Electricity
Water
Gas
Cable
Internet
Phone
Taxes
Tithing
Donations
Debt
Childcare
Pet care
Child Support
Restitution
BudgetIncome Source
Gross(Total amount)
Taxes, Insurance & Benefits Net(Gross minus taxes, etc.) T.V.
1.
2.
3.
Expenses Expected Actual Difference T.V.
Savings/Investments
Food
Housing
Medical
Transportation
Health Insurance
Car Insurance
Life Insurance
Clothing
Household Items
Convenience Foods
Entertainment
Other insurance
Grooming/Hygiene
Electricity
Water
Gas
Cable
Internet
Phone
Taxes
Tithing
Donations
Debt
Childcare
Pet care
Child Support
Restitution
Stay Connected •Bootstraps website:
www.bootstrapseducation.org Shawn’s Blog Schedule of courses For Graduates page
Stay Connected •Bootstraps Facebook Page
Updated 5 times a week with interesting videos, articles, links, pictures and polls
Stay Connected •Bootstraps YouTube Channel
Stay Connected •Bootstraps Newsletter
Monthly newsletter with program updates as well as interesting or informative articles relating to issues discussed in the program.
To sign up email: [email protected]
Improving your financial position will come from the
creation and maintenance of ASSETS and not merely and
increase in income.
Financial Stress•Finances play one of the biggest roles in a
person’s day-to-day stress.
•Stress, as it turns out, is one of the biggest factors in a person’s health.
•And health is one of the largest burdens on personal finances!
Bootstraps, Head Start and You
Any questions or comments?