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Category Archives: Budgeting

Teaching Children About Money

If you’ve spent much time on social media, you’re likely aware of the tendency for social media feeds to showcase users at their high points. For example, carefully constructed vacation selfies or clever captions highlighting expensive purchases (Ugh, I just want to bluetooth my iphone7 but I’m not techy enough to figure out BMW’s touchscreen!). Although some adults may be getting better at seeing through others’ (or curtailing their own) humblebrags, regular brags and all of their derivatives, children may still be socialized into thinking mindless consumerism is the norm, especially if their parents involve them in these behaviors.

What children might not realize is that parents are working long hours, or that they are stressed out paying for that consumerism. While the ability to buy on credit has made initial purchases easier, it doesn’t give children the whole picture. They may see big houses full of luxury items, but what they don’t understand is whether or not there’s money in retirement accounts.

The topic of money (other than showing that we have it) is often taboo and something many don’t talk about. But it can be framed as a fairly simple, logical concept, even for younger children. Although parents and children will make financial mistakes, it’s important to take advantage of intentional, teachable moments while children are young. Here’s three basic topics to be aware of.

Wants vs. Needs, Modified

Helping young children understand what is a need and what is a want by discussing the differences. Needs include food, shelter, utilities and clothing. You don’t want to buy your wants at the expense of your needs or of the future. Though easy to use, credit cards shift spending into the future, which can sometimes be a bad financial move.

To make money more concrete than swiping a credit card through a machine or waving a smartphone over a reader, make it a point to use cash once in awhile to demonstrate the value of the dollar.

For example, if a child has been given a dollar or two, let them physically hold it while shopping and talking about prices. Let him or her decide to use the money for a store’s product or opt to keep the cash for a later purchase. If you’re doing a monthly budget at home, involve children enough to understand that the work you’re doing on the computer now is connected to later swiping a card or uses a phone to purchase something.

Just make sure to keep the discussion developmentally appropriate- children shouldn’t be given too much information or worry about their family’s finances, just enough to understand that there’s intentionality behind spending money.

Opportunity Costs

Opportunity costs are the value of something that is lost because you have chosen an alternative course of action. Youngsters can begin to pick up on this as they age. In the cereal aisle of the grocery store (often designed to be extra eye-catching to young children), a parent or caregiver may say, “You can have one thing on the shelf. Pick one but give up the rest.” In a good way, this forces children to weigh their options.

As a child ages, parents can say, “Here’s $2 or here’s $5, but there’s no more.” On the other hand, if a parent gives in to a tantrum at the store, this can reinforce an immediate gratification mindset as well as teach that tantrums or pleading works. The reality, however, is that things cost money and there are tradeoffs.

Pick Your Battles

Taking children shopping can set up difficult situations, but can also get children used to the idea that “you don’t get something every time we go to the store.”

Conversely, times with children in stores become teachable moments. If they bring up the topic, it’s more effective than if the parent does. Rather than saying no, present a choice: You can have this or that, a tradeoff. Take your child’s questions and turn them into something more.

Overall, giving your children “a sense of agency,” a sense they have power and control in making financial decisions, is a positive.

Doggone Expensive

I was sitting in my office thinking about what I could write as a financial tip of the week. It is spring. Many students are graduating and some are receiving graduation presents.  Some are presents that students buy for themselves.  Just yesterday, I visited with my friend’s daughter and three of her friends.  Between them, they had three dogs – two are puppies and the “old” one is turning a year old next month.  The dogs are great fun and the most recent acquisition is a Chesapeake Bay retriever puppy who will be trained to hunt for his owner. I truly understand this, as I purchased a golden retriever for myself, as a present for my successful matriculation form Mizzou 42 years ago.  Her name was Jessica and her photograph still adorns my office, as her love filled my heart during many a day.  She lived with me in Arkansas, Missouri, Nova Scotia, California, and New York, before returning to Missouri shortly before her untimely death.  To her credit, she not only swam in both the Atlantic and Pacific, but she also paddled in the Great Lakes, the Great Salt Lake, and many rivers while perched within my canoe. Truly, Jessica was loved by many who agreed that she should have been awarded a degree from Cornell, when I received mine, as she went to campus most days with me to her be adored by others. Moreover, she costs me a lot of money in care and attention and money was scarce while I was in school!  So, in case you’re thinking about getting a dog, consider what a doggone dog costs, before you make a commitment to join your life with that of your new best friend.

To begin, and shortly after the puppy has licked your face multiple times, there are initial costs.  If you are purchasing a pedigree dog, depending on the breed and local market, a dog can cost from $200 to close to $2,000.  (Don’t make fun of that high figure.  That is about what my son, the finance professor, and his wife spent on their dog, a Golden Doodle, during my son’s last year of graduate school!)

Other than acquisition costs, you may choose (or be required) to have the pet neutered.  This may cost you $200-$400. An initial medical exam will typically be $60-$80, a collar with a walking leash $25-$30, a training leash is another $15, a shipping/travel/sleeping crate will come in under $100, and the cost of signing up for a training class $150. (The training class is for you.  It keeps you disciplined to work with your dog so you can be proud of her when she is the star of the class.)  Taken together, the initial costs, at the low-end, is $750 upward to over $2,500.  The following site estimates the first year costs of owning a dog: .

Next, the dog will live with you for twelve to fifteen years!  These years cost money, in addition to the one-time costs. Annual costs for food for a dog will range from $120 – $360 per year, depending on the size of the dog and the quality of the diet. Annual medical exams, vaccinations, and emergency visits to the veterinarian will run from $200 to some unbelievably large number if your dog is an extreme health risk and requires surgery or overnight stays in the doggie hospital.  Of course, you will want your dog to look good and to have some dog toys.  If you only buy 3 tennis balls a month from Amazon, they will cost you $45 for the year and monthly grooming could run to $200 for the year.  Doggy treats, depending on your preferred doggy diet, will cost at least $5 per month or $60 a year.  If you chose to purchase pet insurance that will be over $200 per year and, of course, we’ll throw in another $50 per year to cover miscellaneous expenses like repairing your friend’s door when your lovelorn puppy decides to scratch her way back to your welcoming arms when you leave her there, while you go to the movie. Of course, you can’t go on vacation without taking the dog.  If you do, you will need from $40 to $100 per day in kennel expenses.  In addition, many landlords will not allow pets.  If they do, they might require a second month’s rent as a dog damage deposit. (It always took me a while longer to find a place to live that allowed pets.)

Given the above and one week of kennel, a dog has an annual cost of from $755 to $1,465, perhaps much more. If we assume you will own the dog for 12 years, when you decide to buy that dog, you’ve made an immediate financial commitment of from $8,300 (for the economy model) to over $16,000 (for a dog tinged in gold with health issues).  Of course, at the end of the dog’s life, there may be heroic measures you wish to purchase to keep your friend at your side.  You may even consider going into debt. I recommend that you consider what actions you will take, should this occur, before it occurs! This eventuality puts additional pressure on your emergency fund.

Finally, I wouldn’t give anything in exchange for those years I had with Jessica. Many called her my first wife, as she went many places with me and always helped me meet people and make friends. A dog adds much to life, but a dog is a huge commitment and a large expense.  The total commitment to training, caring, and loving a pet is a big decision.  It is a decision to spend thousands of dollars which cannot be spent on tickets to events, cars, houses, books, food, or anything else you might want. Yet, coming home to that wagging tail and those “so happy to see you” eyes can be worth every penny it costs. Just make sure that those wags fit in with your vision of financial success, before you visit the breeder or your local Humane Society.

Use Spring Cleaning to Air Out Your Finances

Many people engage in spring cleaning to clean out the clutter that has accumulated during the winter months. This is a good time to air out your finances as well. If you have had some major life events since the last time you examined your financial life, you might discover some dusty financial accounts that you had forgotten about.

As people age, checking and savings accounts may accumulate. One of the first tasks involved with moving to a new location is to set up accounts with local financial institutions; however, people often forget to close down the accounts at the place they moved away from. Similarly, married couples often open new joint checking and savings accounts, but they may leave old accounts from their single years open. Savers interested in the highest interest rates move their money around as they chase after the highest yielding accounts. They may also leave their old accounts open either due to neglect or on the chance that the account may again be an interest rate leader.

The accumulation of dusty accounts happens with retirement accounts as well. Employees will change jobs and often leave their 401(k) or 403(b) with their former employer. Employees that are quickly climbing the corporate ladders between companies may find themselves with several retirement accounts, each having different rules and investment options. Keeping tabs on each of these accounts and maintaining an overall picture can be daunting.

What are some of the problems with leaving accounts open? First, it makes recordkeeping much more complicated. Receiving multiple statements in the mail at the end of each quarter or month can strain simple recordkeeping systems, especially if the accounts hold negligible amounts of money. Furthermore, multiple accounts can cause headaches at tax time. If you receive an interest statement showing that you earned $25 in interest after you’ve filed your tax return, you will have to amend your return with the complicated and costly 1040X. The $25 interest may cost you upwards of $150 in additional tax preparation fees. Second, you may be charged inactivity fees if your account shows no activity. These fees, ranging from $5 to $10 per month, may slowly eat away at your account balance, until your account turns negative. Thirdly, it may cause headaches for your heirs. If you have a hard time keeping track of your accounts, imagine what your heirs will feel as they try to untangle your financial situation.

So, what to do: As the earth renews itself this spring, take some time to shake out the dust and breathe new life into your financial plans. Step back and examine your entire financial situation. Are you meeting the goals you’ve set for yourself financially? If you haven’t set any goals, now might be a good time to set some after you’ve organized your financial life. If you have multiple old checking and saving accounts, decide if you really need them and close the unneeded accounts. Consolidate your accounts so that your financial situation becomes less stressful and easier to manage. If you have multiple retirement accounts, you might want to consider rolling them into your current employer’s retirement plan or into your own retirement account at an independent financial institution. Take some time to review your will and other end-of-life documents. If situations have changed since the last time you updated the documents, draft and sign new documents reflecting your current situation.

Taking care of these details now will likely make the financial aspect of your life less stressful for you throughout the year.

Grocery Savings

By Dr. Rebecca J. Travnichek, AFC®

You don’t have to be an extreme couponer to save money on your groceries. Here are nine things you can do each month to save your family $200/month.

  1. Make a list and stick to it! Planning meals in advance and making your grocery list before you go grocery shopping will help you to not give in to temptation and buy impulse items. Research has found that unplanned grocery purchases can add an extra 20% to your grocery bill. Monthly savings = $50.
  2. Paper or plastic? Not bags as you may be thinking. I am talking about cash or credit. If you are going to buy groceries on credit, be sure to use a card that works for you. By this I mean use one with cash back, rewards, and instant discounts. However, if you rack up interest charges by not paying it off each month, you lose any savings it provided you. Monthly savings = $15.
  3. Snip ‘n’ Save. Yes, coupons can save you money. Spend no more than 10-15 minutes a week thumbing through weekly ads for coupons or cruise websites like Only use coupons on items your family needs. Buying just because you have the coupon doesn’t save you anything. Monthly savings = $15.
  4. Cash incentive. Research has shown that consumers who shop with cash only, spend 12%-18% less than those who shop with credit cards. So leave the cards at home and take only what you have budgeted for groceries in cash. Monthly savings = $40.
  5. Shop around. While looking for coupons in the weekly ads, be sure to check the prices for the items on your grocery list. Or better yet, use the grocery ads to plan your meals in order to take advantage of grocery sales. However, driving to 10 different stores may end up costing you more. Monthly savings = $25.
  6. Try generic. I know. Some of you may be thinking, I hate generic! However, store-brand products have improved over time. Oftentimes generic products are made by brand-name manufacturers and they may cost 20% less. Give generics a try the next time you go to the store. Monthly savings = $20.
  7. Avoid gimmick pricing. I bet all of you have seen the “10 for $10” sales or something similar in the stores. Don’t fall for this. Be a smart consumer and check the prices are on similar products, they may be cheaper. Besides, you may not be able to use the items before they expire. Monthly savings = $5.
  8. Pricey things come in small packages. Tiny bags are cute. But you are almost always better off to purchase the larger package sizes and divvy them up yourself. Use the nutrition label for correct portion sizes. Monthly savings = $20.
  9. Time is money. Convenience foods may save you time, but they also cost you more money than buying fresh, unprepared items. For example, a bag of pre-cut salad vs. buying a head of lettuce and your choice of veggies. The fresh lettuce and veggies will feed more family members over a longer period. Monthly savings = $10.

Apply all nine tips shared for reducing your grocery bill and keep $200 each month in your pocket to use for your family’s financial goals.

For more information on ways to save money on your groceries and other household expenses, check out the websites below:

Dr. Rebecca J. Travnichek, AFC®
Family Financial Education Specialist
University of Missouri Extension – Camden County

Is it Better to Use a Debit Card or a Credit Card for Purchases? Consider the Differences in Customer Liability Before Deciding

By Jesse B. Jurgenson

Whether it is better to use a debit card linked directly to a consumer’s checking account or a traditional credit card for most purchases is a common question that I have received over the last decade. It has mostly came from individuals whose concern lies not as much with their ability to pay for the purchases (low or interrupted income) as it does with a desire to make the most of the present consumer protection laws and continue down the path to meet their own long-term financial goals.

Assuming that you are one of the estimated 62% of the population who do not carry a balance on a credit card by paying the amount owed in full each and every month by the due date[1] and show financial maturity by not spending beyond your true financial ability, choosing between using a debit card or a credit card for most purchases may come down to a “what is in it for me?” question.

Some benefits of using a debit/ATM card are:

  • Saving yourself from yourself. A debit card increases the chances you will stay within budget since you are limited by the balance available in your account which lowers the risk of accumulating debt.
  • Access to your own money. Easily get cash from cash machines or cash back from purchases.
  • A built-in password. Having a Personal Identification Number (PIN) is an extra layer of security if the debit card is lost or stolen.
  • Ease of transactions. Debit cards are certainly safer and more convenient than carrying cash or checks and are accepted at a large majority of retailers.

A few benefits of using a traditional credit card are:

  • Credit reporting. Credit card activity is commonly reported to the credit bureaus and work to build a positive credit history (assuming you make at least the minimum payment by the due date) which will come in handy when you look to borrow money for larger purchases such as a house or a new-to-you vehicle. Generally speaking, debit card activity is not reported to the credit reporting agencies.
  • Universal acceptance. On top of being accepted at a large majority of merchants, certain transactions such as renting a car or hotel room require a credit card rather than a debit card to protect the merchant against damage you may cause to the vehicle or room.
  • Rewards and perks. Many credit cards offer benefits that you don’t see with debit cards such as cash back, airline miles, extended warranties, rental car insurance, travel insurance, purchase protection, roadside assistance, specific store discounts, or exclusive coupons.

However, there is one other difference between the two payment options that you may also want to consider. The concern over identity theft, unauthorized purchases, and retailer errors have garnered national and worldwide news recently with the massive payment data breaches from corporations such as Target[2] and The Home Depot[3]. Having shopped at both of those retailers during the suspected vulnerable times, I decided it was best for me to be proactive in protecting myself. I requested a new account number from my financial institution in addition to performing due diligence on my monthly statement. I was fortunate to not run into any issues, but what if an unauthorized payment had been made on my account and I had not noticed? Let us explore how the existing consumer protection laws, the Fair Credit Billing Act (FCBA)[4] and the Electronic Funds Transfer Act (EFTA)[5] may factor into making a decision to use the product that is best for you and your household.

Credit Card Loss or Fraudulent Charges[6]

Under the FCBA, your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable for unauthorized use. This means that if the thief uses your card by phone or the Internet, you have no liability[7].

Call the card issuer as soon as you realize your card has been lost or stolen. Many companies have toll-free numbers and 24 hour service to deal with this. Once you report the loss or theft, the law says you have no additional responsibility for charges you didn’t make[8]; in any case, your liability for each card lost or stolen is $50. If you suspect that the card was used fraudulently, you may have to sign a statement under oath that you didn’t make the purchases in question

ATM or Debit Card Loss or Fraudulent Transfers

If you report an ATM or debit card missing before someone uses it, the EFTA says you are not responsible for any unauthorized transactions. If someone uses your ATM or debit card before you report it lost or stolen, your liability depends on how quickly you report it:

If you report: Your maximum loss:
Before any unauthorized charges are made. $0
Within 2 business days after you learn about the loss or theft. $50
More than 2 business days after you learn about the loss or theft, but less than 60 calendar days after your statement is sent to you, $500
More than 60 calendar days after your statement is sent to you. All the money taken from
your ATM/debit card account, and possibly more; for example, money in accounts linked to your debit account.

If someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you. If you can convince the bank that your notification failure was due to extenuating circumstances, it must extend the notification timeline for a “reasonable period6.”

Under the EFTA, a bank has 10 business days to investigate the matter (20 business days if your account is new) and report back to you with its results. If the bank needs additional time, it may, under certain circumstances, temporarily give you some or all of the disputed amount until it finishes its investigation[9].


The consumer protections currently provided by the EFTA and FCBA are very similar for both credit cards and ATM/debit cards as long as an individual notices the disputed item and informs their bank, credit union, or credit card issuer within a very short amount of time. Where we start to see a difference are when someone may not be spending the time to inspect their account transactions. The potential for unlimited loss is present with an ATM/debit card where that potential is not present with a credit card transaction. If you are an individual who uses a debit card for most purchases and does not keep a careful watch over their account transactions on a regular basis, you are increasing your risk of potentially losing money to errors and fraud.

Guest contributor Jesse Jurgenson is an AFCPE Accredited Financial Counselor and past Financial Counseling Supervisor with an NFCC certified non-profit family service organization. He is also a current Ph.D. student and Graduate Instructor in the Personal Financial Planning Department.