A new curriculum of merit badges proposes to teach the GSA’s more than 3 million members everything from good credit to budgeting to the ins and outs of savings and investing. In all, there are 13 Girl Scout badges and awards related to financial literacy.

This is exciting news, since this isn’t necessarily knowledge they’re picking up in school: only 7 states require high school students to take personal finance classes as a requirement for graduation.

Providing lessons in economic literacy to learners of all ages creates better informed employees, voters, and peer educators. With the Girl Scouts offering different badges for each age group, members will stay ahead of the curve with multiple chances to gain financial knowledge.

It sure seems like the Girl Scouts of America are following their motto, “be prepared,” so do as the Girl Scouts do and take one of our quizzes to test your economic literacy. Better yet, you could try your hand at running your own business.

FirstJobs.org

If you’ve read a newspaper in the past 3 years, you may have been alarmed at reports of a volatile stock market, high unemployment, and retirement plans in jeopardy. Ever wonder if there’s anything you can do to protect yourself during troubling financial times? There is. And the more you can do to protect yourself from the economic factors outside your control, the better off you’ll be — not only now, but also when the Great Recession is officially behind us.

1. Finish your college degree. What do most people who have survived the recession financially intact have in common? A college degree. According to the Bureau of Labor Statistics, the unemployment rate for people without them (10.7%) is more than double that for those with a bachelor’s or better (4.4%). If you haven’t completed your undergraduate coursework, get it finished now to improve your employment prospects.
2. Cut your living expenses. The more you can do to reduce your monthly living expenses, the better. That might mean carpooling to save on commuter costs, trading in your vehicle for an older model to cut down on your car payments, or even moving to a cheaper apartment. Sounds painful, but once you make a few cuts on your monthly expenditures, the savings add up fast. Just be sure to put it into an emergency fund in an interest-bearing account.
3. Stay employed while job hunting. This one isn’t entirely under your control, but if you’ve contemplated quitting your job — don’t. More hiring managers are enacting “unemployed need not apply” policies. It’s not illegal, even if it doesn’t seem fair. Bottom line: Having a job while job hunting makes you seem more desirable in a competitive applicant pool, so don’t give up on yours, even if you can’t wait to leave.
4. Pay off debt ASAP. If you have any debt with unfixed interest rates — like student loans, credit cards, or a mortgage — refinance to secure the best terms you can. Then pay that debt down as quickly as you can. If interest rates rise, you’ll save a bundle in the long term and you’ll feel the freedom of being debt free.
5. Network when times are good. Having a group of people concerned about your wellbeing means you’ve got a list of people to call if you’re ever out of a job. To take one personal example: A friend of mine was laid off at the beginning of this year. She got home that night and starting calling people she knew in her industry — and one of those calls quickly led to a job offer. You never know until you ask.

The news can seem bleak, but the economy has weathered worse dips before. At the end of the day, economic indicators simply reveal trends by individual consumers. Make the right choices to protect yourself and your family and sooner or later, the economy will recover. It always has.

5MinutesForMom.com

Spinning off Tuesday’s post, the question remains: If you do manage to cut your spending on discretionary purchases, how much money does that help you save every year?

Bills.com has a nifty Ways to Save Money feature that shows you how much your savings can add up if you sock away the money in an interest-bearing account. For example, cutting $5 per week from your grocery bill every week adds up to a savings of $1,300 over five years, assuming a 1 percent rate of return. That’s a fairly simple change that you can make with dramatic long-term results.

One drawback: At the moment, low-risk savings vehicles (like savings accounts and certificates of deposit) are paying peanuts — a fraction of a penny on the dollar in most instances. And Bills.com’s calculator does not allow users to select anything under a 1 percent return, so it may be overestimating how much your savings will compound over time.

But we offer a solution. Punch your estimated savings and the actual rate of return you’re getting in your savings account into our Compound Interest Calculator to play around with more realistic outcomes.

USMint.gov

You’ve seen those commercials on TV that proclaim, “For just 50 cents per day, you can change someone’s life.” And while some of those charities are no doubt worthy, what if the life you could change were your own?

This is not a gimmick. To see how spare change can add up, I was just playing around with Econ4U’s Compound Interest Calculator to see what saving two quarters a day could earn you in the long run. If you sock away 50 cents every day, you’ll have $182.50 at the end of one year. Not bad in itself.

But what if you put that in a basic savings account paying 1 percent in interest?

Well, after five years of continuous saving, you’d have $930. And after a decade? You’re up to a whopping $1,908 — all for saving just 50 cents per day.

No matter how close to the brink you are, just about anyone can scrounge up two quarters by emptying your pockets, keeping an eye on the sidewalk, and checking change-return wells in vending machines. Hey, even the office couch may yield a return.

As they say, a penny saved is a penny earned — and with compound interest working for you, that makes nothing but sense.

SciencePhoto.com

Labor Day marks the unofficial end of summer, and for many teens and young adults, it also means the conclusion of the worst summer for finding seasonal employment in decades.

Our affiliate, the Employment Policies Institute (EPI), has released an analysis of new Census Bureau data showing unemployment among people ages 16 to 19 at or above 20 percent in 35 states through July 2011. Seven states and the District of Columbia were even worse, averaging more than 30 percent. (That should come as no surprise for anyone who spent the summer fruitlessly job seeking.)

In a press release, we delivered the grim news:

“The nation’s teens have just experienced their third summer in a row with an unemployment rate above 20 percent,” said Michael Saltsman, research fellow at the Employment Policies Institute. “As a result, thousands have missed out on the valuable career experience that comes from an entry-level job.”

Unfortunately, just because the school year is starting doesn’t mean that the job outlook is improving for students looking for after-school work. Wage mandates that were theoretically designed to help less-experienced workers earn more money have backfired, locking teenagers out from jobs and making the employment-seeking environment even more hostile to unskilled workers. Lawmakers need to reconsider the broad effects of minimum-wage laws and evaluate how they have affected the very constituents that needed the most help.

PawprintsCrossStitch.com

Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

First, we should start by mentioning that yes, you can buy a house with less than 20 percent down. The question is, Is it financially wise? There are some substantial benefits to a large down payment, so be informed and proceed knowing the following facts.

1. You will avoid private mortgage insurance (PMI). If you buy a house with a down payment under 20 percent, you will pay PMI until the loan-to-value ratio hits 80 percent. According to the Mortgage Bankers Association of America, that fee is typically .5 percent of the loan per year (so $1,500 per year on a $300,000 loan).
2. You can get better interest rates. According to Bankrate.com as of today, if you wanted to get a 30-year mortgage for $300,000 in the D.C. metropolitan area, the best interest rate is 4.125 percent with 20 percent down. But if you put only 5 percent down, that rate goes up to 4.25 percent. It doesn’t sound like much of a difference, but over 30 years, it amounts to an extra $7,873 in interest you will need to pony up to the bank.
3. Your offer will be more attractive. In the event of a bidding war — particularly over a short sale or foreclosure, where the bank gets to choose the bidder — having a “clean” offer is a huge benefit. Being able to provide a large down payment in cash could mean the difference between getting your dream home and continuing your search.
4. You start off with more equity. Think about it this way: With 20 percent down, you already have a decent amount of equity in your house. If you put only 5 percent down, any downward fluctuation in the real-estate market could put you underwater so that you owe more than the house is worth.
5. You demonstrate good financial discipline. Homeownership is not typically less expensive than renting, and expenses will always pop up. Having the discipline to save up 20 percent of a home’s value shows that you know how to save and can handle budgeting for the unexpected.

Kaiser Family Foundation

The New York Times yesterday published a review of the Kaiser Family Foundation’s analysis of health-insurance premiums across the nation on its Prescriptions blog, which covers health-care issues. However, there is an economic fallacy lurking in its analysis worth pointing out.

The blog says:

If you live in Massachusetts or Vermont, the average monthly premium topped $400 a month in 2010, compared with just $136 a month in Alabama. The average across the country was $215 per month.

The authors of the analysis point out that some expensive states have higher insurance premiums because they make it easier for people with potentially expensive pre-existing conditions to get coverage.

The authors believe that the new federal health care law will probably reduce the variation in premiums, although they note that a state’s cost of living and overall cost of health care also contribute to the differences in premiums.

While it’s true that the Affordable Care Act will make premiums more uniform regardless of where you live, that idea is misleading. They’ll be more uniformly high — and covered up by subsidies for households between 133% and 400% of the poverty level, which puts the financial burden squarely on taxpayers. Additionally, the new law glosses over the reasons that certain states’ premiums are higher than average, like existing mandates for guaranteed coverage.

All of which leads us to question: “affordable care” for whom?

PerfectWeddingMag.com

If you’ve followed the conventional wisdom of making a budget to live within your means, you may think you can just kick back and reap the benefits, right? Not exactly.

There are a number of life changes that will require you to tweak or even completely redo your budget. Here are a few of the most important changes you can make to ensure your budget can adapt to major life events.

• You get a raise. You may be tempted to spend a chunk of that money on a bigger apartment or a fancy new car, but resist. If you allow your expenses to expand every time your income increases, you’re not any more secure financially than you were before the raise. Keep your monthly expenses the same, though, and your savings accounts will reap the benefits.
• You lose your job. When your paycheck evaporates, it’s time to tap into your nest egg. However, maintaining your previous lifestyle without an income is a fast way to deplete your emergency fund. What you need now is a [blank]-hit-the-fan budget. Strip down your spending to stay current on the essentials for survival (housing, utilities, food) and any debt obligations (student loans, minimum credit-card payments, and other loans) to keep your credit in good standing.
• You get married. When you legally become a two-income household, the IRS starts looking at your earnings in a new light. Sit down with your new spouse to make sure you’re paying the correct amount in taxes every payday to avoid an unhappy wedding gift from the taxman next April 15.
• You have a baby. Not a newsflash: Kids are hardly cheap. The Department of Agriculture calculates it costs $226,920 to raise a baby to adulthood. However, the early years need not be the most expensive. An infant doesn’t need dozens of toys, books, or expensive outfits (especially considering she will outgrow all of the above at record speed), and as long as it’s safe, he won’t care how much you spent on his nursery furniture. Resist the urge to splurge gratuitously on your new arrival. And here are some important other financial milestones to hit before Junior arrives.

MSNBC.com

Last weekend, D.C. Mayor Vincent Gray granted an audience to high-school and college students in the Nation’s Capital to discuss the high teen-unemployment rate. At the beginning of the summer, the Bureau of Labor Statistics reported that teen unemployment had skyrocketed, with half the states showing unemployment rates above 25 percent. Even more depressing, the jobless rate for minority teenagers is 42.1 percent nationwide.

The D.C. government attempted to pre-empt this trend by spending more than $20 million to place 14,000 District youths in jobs at government agencies and local businesses. Still, many young people were left disgruntled at the reality of being unemployed for the summer, leading one 17-year-old to tell The Washington Post: “I think it’s not anyone’s fault. We need to go out there and get jobs, but at the same time, they could come to our schools and make it easier for us to sign up.”

However, we feel that sentiment misses a key economic point. With such a high teen-unemployment rate, the demand for summer jobs has clearly outstripped the supply. Teens who wish to work must show some initiative in pursuing the jobs that do exist, and lawmakers could rethink minimum-wage policies that tie employers’ hands in hiring less-experienced workers such as the young people who attended this town-hall meeting.

Beyond that, there are plenty of ways that teens can stay busy and earn money outside of traditional employment. If you’re looking to drum up a little extra cash before school is back in session, check out our tips post here.

RetireSensibly.com

Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

CDs, money markets, and Roths — oh my. The world of saving for the future is an alphabet soup, but we’ve put together this handy glossary for helping you figure out where you should stash your cash for a rainy day.

1. Savings and checking accounts. A savings account is probably the very first account you ever opened — perhaps back when going to the bank meant a free lollipop. These linked accounts are the simplest way to put away money and have access to it when you need it. Just make sure you’re not accidentally draining it by paying overdraft or ATM fees.
2. Online money market account (MMA). If you would like to make better interest on your money than what your savings account is offering, consider an online money market account. Online banks can pay a higher interest rate on savings because of a lack of overhead (you can check yields here). However, transferring money to your checking account can take 3 days and you may be limited to a certain number of debits per month, so it’s not the best place for a true emergency fund that could save your hide in a crisis.
3. Certificate of deposit (CD). A CD is a perfect option if you have cash you won’t need for a few years (like for a down payment) and want it to grow with very little risk. Bankrate reports that 3-year CDs are currently paying between 1.5 and 1.9 percent in interest, many with no minimum deposit. However, if you withdraw that money before the CD matures, you’ll pay a penalty that will cancel out whatever you’ve earned in interest.
4. 401(k) and 403(b) plans. These common retirement account is available through many employers: 401(k)s through companies and 403(b)s through nonprofit groups. If you get a company match or are looking to pay less in taxes, it is your best bet for saving for your golden years. You can deduct any money that you contribute to it and pay taxes when you withdraw it in retirement. Also, a company match is free money that your workplace is trying to put in your pocket, so take them up on that benefit!
5. Traditional and Roth individual retirement accounts (IRAs). A traditional IRA is similar to a 401(k) in that you can contribute pre-tax dollars to it (up to $5,000 per year). But you can open it yourself at a bank of your choosing in any year in which you earn income. If you are not offered a company match or you think there’s a chance taxes on retirees will be higher in the future than they are now, the Roth IRA is a better bet. You fund it with post-tax earnings so you do not get the tax savings now, but the money can grow and you won’t have to pay taxes on it again in the future. And remember: They earlier you start contributing, the more your money can grow.

Still undecided about how best to save? Check out our features on retirement savings and starting an emergency fund.