Change starts with a desire to do things differently; a commitment to learning and practicing some basic financial concepts. We must practice good money habits to truly make a positive financial change. Ironically, it really isn’t that difficult to manage our finances. It’s like tying our shoes, or brushing our teeth. It has nothing to do with how much money we make; rather, it’s what we do with what we have. We should focus on incorporating the right habits and acknowledging what we value most. Take small steps and remember that our decisions can lead to a life-long commitment of positive change. Trying to do it all at once can be very overwhelming and discouraging. Focusing on money too often can also create problems. The goods news is that changes in our behavior can fix our money problems. What we ultimately do with our money is a personal matter. However, by being engaged and committed to improving our finances, we feel measurably better about our future, attitudes, jobs, and stress levels. Financial literacy is more than just managing your checkbook–it’s learning all aspects of personal finances like budgeting, saving, and even using debt responsibly. Lacking these basic money skills can lead to poor decisions with destructive consequences. Through change, we can head down a path towards financial security. Ask yourself: “Do I feel good about my finances?” “Am I happy with the choices that I have  been making with my money?” “Is my financial plan working for me?” If you answered “no” to any of these questions, then it’s time to make changes. We need to be open and honest with ourselves on a regular basis, or everything will stay the same. If we aren’t happy and feel stressed, why stay on the same course?


The word addiction when it comes to finances is not used to often. But when related to your buying habits and the problems that persist because of it there is a time to reflect on your needs vs. wants when it comes to stuff. When you analyze your finances and a disproportionate percent of your income goes towards floating your lifestyle instead of providing the necessities of everyday living and forming a solid retirement and college savings plan than you should consider deeper reflection on what is important to you when it comes to money and spending it.




  • Stuff needs to be stored, and as your pile of stuff grows, you will need an ever larger space to store it. That will likely see you looking to buy a bigger house every few years, with all of the expenses that come with it1
  • Stuff is a capital trap – it ties up your money, but generally provides no financial benefit1
  • Any money that goes into stuff, is money that is not going into productive investments1
  • While stuff can make you more comfortable, only income producing or growth oriented investments can improve your station in life1
  • During times of financial turmoil, you may become obsessed with protecting and maintaining your stuff, which is not at all what you need to focus on1
  • Stuff has a way of eating up time, so that you have less of it to spend on more productive activities1




1 – (7) End Any Addiction to Stuff That You May Have


The costs of going to college is rising, so much as 8.3% last year or about $5,200 more. States have cut funding for higher education by almost 11% last year, as well as, parental contributions have decreased by 10% covering on average, 27% of their child’s tuition. This is due to in part because of the 2008 financial crisis, but it also does not help that overall the cost of college has increased by almost six-times since the 1980s. By these statistics alone and the fact that the average student is coming out of school $38,000 in debt means that you should consider everything you can while in school to keep that down, considering that on average a college graduate is landing a job that pay’s $50,000 a year, which could keep your student debt looming for years.

There are many experiences to be had while in college, but one of them that students seem to put off until junior or senior year is getting a job. But there are many benefits to getting a job while in school that will pay off in the long run. As discussed above it will help you pay off your debt quicker, or if it is a minimum wage job it could help reduce the stress of monthly family contributions to pay for living expenses, or save up for summer trips, or a car. As well, working while in school provides valuable job experiences. Why wait until senior year to start knocking off the 1,000 Starbucks runs, or creating spread sheets, start your experience now and look for a company you can grow with to not only experience real world situations, but also build up your role over four years of school.

While school can sometimes be enough to fill up your plate when it comes to your free time, college is structured much differently than high school, in such a way where you have a lot more flexibility with your schedule and can set it up in a way where you can still work a few days a week or certain hours every day. There are many companies out there that are looking for young talent to handle social media, technology, design and an array of skills that millennials are inherently well versed in, so approach a company with a desire to give them a disproportionate amount of value and you will receive a great experience and grow your career at the same time. Having that job and managing your schedule properly will create great management skills that will benefit you throughout your career.

Many students find that in taking on a part-time job while in school your grades rise, because just like high school, when you had your schedule filled with sports, and clubs you only had a set time to accomplish school work, as well as, kept to a higher standard and already in the mindset to get work done. Finally, when working full-time many companies will offer benefits such as a 401k plan, health insurance, and tuition assistance while attending college. There are many reasons to consider working while in school, but the best thing to do is start early and work hard, define your future do not wait for college to be over to say – hey, should probably throw together a resume – the entire purpose of school is to prepare yourself for your future so why wait?





Student loans have become more and more of a problem over the years. Students are becoming dependent on larger loan amounts to cover their tuition with ever rising costs to attend college. 70% of graduates are now leaving school with debt, owing an average of almost $38,000, a difference of almost $30,000 when comparing it to the average debt that baby boomers had coming out of school. Not to mention those who decide to continue their education looking at even more substantial amounts of debt coming out of graduate school.


Realizing the magnitude of taking on student loan debt:


  1. In total student loan debt in the United States exceeds $1.4 Trillion a number that is close to the GDP of Belize which has a population of close to 400,000 people. By just that one number alone you can tell that becoming part of that ever-growing debt system you can potentially keep paying on student loans for a major portion of your life. You need to analyze the potential impact it can have on you starting a fruitful career. A lot of what your post graduate years will depend on is where you live or where you plan on living, because the living costs will be much different in Los Angeles, California than they would be in Des Moines, Iowa. There is always going to be a risk in taking a student loan, but if necessary then you need to make sure to go over the small things that could derail your long-term plan (such as living expenses, transportation, years spent in college, gpa, scholarship opportunities) all of which take on a bigger role when combined.


  1. This is not just a millennial problem. Increasing student loan debt has effected parents and grandparents as well. Over 33% of student loan debt is held by people 40 years and older. More than 80% of seniors who are in default incurred their debt for their own educations. One thing that is apparent when it comes to student loans is that the families that are taking them out are doing enough to receive the aid, but usually do not do enough to discuss the responsibilities and setting up a proper plan to pay back the student loans.


  1. “The national student loan default rate, 11.8 percent a year ago, stands at 11.3 percent. It is one of the most closely watched metrics in higher education because schools with default rates of 30 percent or more run the risk of losing access to federal student aid.” The fact is that colleges run like a business and they are willing to taking on defaulting student loan debt, but if a 30% rate was reached especially by a larger school the financial impact could reach much greater than to the school just losing federal support, they will affect careers, jobs, students’ futures and the surrounding economy those people would ultimately feed into and contribute to, which could create ruins to areas of our nation. We see many schools that struggle to get federal support and the impact that it has on the surrounding community, which is devastating.


  1. We can appreciate the scope of the problem by considering a hypothetical recent college graduate who earns $50,000 per year but, for the first five years of her career, foregoes contributions to her 401(k) plan at a rate of, say, 4 percent of salary. During this period she also misses out on a dollar-for-dollar employer match on those contributions. If we assume she would have earned an average annual return of 6 percent on her investment, she will have lost $245,000 of potential retirement wealth by the time she reaches the normal Social Security retirement age of 67.



For many people college is a big step and can cause a great financial burden, but know with the proper planning and understanding of the undertaking you can keep on track to being financial secure and having a college degree.





Charitable Gifting Through Life Insurance

Many people don’t realize that using life insurance can make a powerful impact in the planning needs of your favorite charities. The “leverage” that can be used to make gifts allows the amount of the policy’s death benefit to usually far exceed the premiums that were paid into the policy, while still keeping things very flexible. There are many simple ways to use life insurance in charitable gifting:

  1. You can gift a policy’s dividends to a charity, such as a dividend-paying whole life policy
  2. Change your current beneficiary to a charity
  3. Gift a policy that is no longer needed to a charity
  4. A common plan is to buy a new policy with the charity being a full, or partial beneficiary, and making gifts to pay the premiums.
  5. Buy a large life insurance policy to back a future donation, because of the lower costs of the premiums vs. the amount of the death benefit.
  6. Gift a highly appreciated asset to a charity for tax benefits, and purchase a life insurance to replace its value for your heirs.

An example:

Jane is 70, and has a $200,000 C.D. at the bank. She doesn’t need the money, but wants to create a meaningful endowment to her favorite charity. However, she also wants her children to inherit the $200k at her death. Jane purchases a cash value life insurance policy with a

$475,000 death benefit, and names her charity as a beneficiary for a portion of the policy proceeds ($275k), and her children ($200k). Incidentally, if Jane needs the money or changes her mind, she still has access to her cash values in the policy. Also, the policy can be further designed to include a chronic illness benefit (similar to long term care) or critical illness protection (cancer, heart, stroke, Alzheimer’s, etc.)

The above example is just one of many different ways to plan for charitable gifting using life insurance. There is also potential income, estate, gift, and capital gains benefits that can be provided. Life insurance can be a tremendous tool for many charitable gifting programs, and makes a wonderful, powerful impact. When designing a life insurance policy, make sure to use a knowledgeable professional, and consult with your trusted tax advisor for tax benefits.

Pat Moran is an experienced financial professional, and recognized as a leading financial educator for the American Financial Literacy Institute. Pat specializes in many aspects of financial education, and conservative solutions for helping people to invest and protect their money. He can be reached at (602) 571-1035