Let’s face it, financial planning can seem complex and a bit scary. The problem is you were probably never taught how to manage your money. Some parents don’t teach children about money because they think they shouldn’t talk about money with children, don’t have the time, or think they don’t have enough money. Parents should take the time to teach children about money regardless of income and should start when children are young. Studies show that high school seniors nation wide averaged 52% when tested on personal financial basics, Rhode Island students did worse than average with 48.8%. Positive credit history helps to achieve your dreams, like owning your own home while a poor credit report can close doors — to mortgages, financing your own business, and even to getting a job.

My guest in studio was Jim Hedemark, the founder and executive director of  the Rhode Island Jump$tart Coalition, the local chapter of the Nationwide  Coalition dedicated to increasing the personal financial literacy of youth and other vulnerable populations in Rhode Island, and he offered some startling statistics:

Credit decisions made early in life can cost or save a person up to $250,000 in interest fees over a lifetime.

In 2005, savings rates dipped to minus .5%, something that hasn’t happened since the Great Depression in 1932 and 1933.  A negative savings rate means that Americans spent all of their disposable income and dipped into past savings or increased their borrowing.

People in the 18 to 24 age bracket spend nearly 30% of their monthly income just on debt repayment – double the % spent in 1992.

$500 is the average increase in consumer prices absorbed by U.S. families as a result of bad debt losses.

 

To raise awareness among teens and young adults about the importance of credit smarts, The Rhode Island Jump$tart Coalition has partnered with the US Treasury Department, and the American Banker’s Association to help promote Get Smart About Credit Day on Thursday, October 19, 2006. On this date, bankers will help teach students how to budget, use credit cards responsibly, and build a positive credit history so they can make smart choices later in life. To date, The A.B.A.E.F. programs have helped more than 1.5 million young adults.
Dan Iannicola Jr., Deputy Assistant Secretary for Financial Education
U.S. Department of the Treasury, who has the distinct honor of having the longest title of anyone I have ever interviewed! joined us by telephone to tell us about what his office does, Mr. Iannicola advises the Assistant Secretary of Financial Institutions on matters pertaining to financial education, including the development, analysis and execution of policy. Since joining Treasury, Mr. Iannicola along with his staff, have pursued an aggressive agenda advancing the cause of financial education by traveling across America to assist local programs, testifying before Congress on the subject and leading a group of 20 agencies to coordinate the federal effort on financial education.

The Rhode Island Jump$tart Coalition was founded in May of 2004.The coalition convenes stakeholder forums (the financial literacy roundtable), supports educators through best-practice continuing education opportunities (Financial $marts for Students Educators’ Conference), provides student-based activities (March Smartness: the RI LifeSmarts competition) and conducts awareness campaigns (April is Financial Literacy Month as per Gubernatorial & Legislative proclamations). 

This Week’s Real Estate Insight: For some people the American Dream of owning their own home is just that, a dream, because they were never taught how to properly manage their money. The benefits of teaching our young people good money habits make it well worth the effort, Children who are not taught these lessons pay the consequences for a life-time.

For more information on this week’s guests:
Rhode Island Jump$tart Coalition
http://www.rijumpstart.org/

American Banker’s Association
http://www.aba.com/Consumer+Connection/getsmartaboutcredit.htm

U.S. Department of Treasury Education Office
http://www.ustreas.gov/education/

As you think about marketing your house, one of your greatest assets may be in your own backyard—one of the best ways to increase a home’s resale value is to revamp the landscape. You will not only attract more buyers and get a quicker sale but probably get a boost in your sale price as well. Consumers value a landscaped home up to 11.3 percent higher than its base price, according to a Clemson University and University of Michigan study, and landscapes that are not as nice as others in the neighborhood are 8 percent to 10 percent lower.

If you spend 5 percent of the value of your home on landscaping, wisely, you might get 150 percent or more of your money back: For a $500,000 home, on which you spend $25,000 to spruce it up, even a modest gain of 7.5 percent would put $12,500 of profit. If your home’s landscaping is on the low end for the area and you’re putting it on par with your neighbors, you could be looking at a 15 percent rise.

These days you’ll want to consider hardscapes such as gorgeous walkways, sweeping arches, full kitchen areas and barbecue pits, elongated patios and decks, elaborate backyard retreats and gazebos,. A perfect yard may look beautifully simple, but a thousand factors contribute to it, from hiring landscape architects and designers, dealing with contractors and knowing what to plant and making sure your costs don’t spiral out of control. To sort out the complexities I brought back Landscape architect Katherine Field to offer her Insights. Here are some of the things Kate and I discussed:

Curb Appeal:  First impressions, as anyone in the dating game will tell you, are key. So before you start designing that luxurious backyard koi pond, get the front of your house in order: mowing, weeding, trimming shrubs, putting in fresh sod if you need to. If you have a budget, it’s important to focus your landscaping around key areas, Something that’s going to be viewed a lot — like the front of the house.

Hardscapes: When the basics are done, you can start getting serious. The hot new trend: beautiful pathways made of brick or concrete pavers, winding from the street to the front door. Make the path slightly staggered or curved to give it some character. Place a wooden pergola, or archway, over the path to define an entranceway. Flank the path with Mediterranean-style pots featuring flowering container plants. Low-maintenance plant material is best. Buyers want the yard to look great, but they don’t want it to be labor-intensive.

The Year Round Garden: By smart planting and giving color to the yard year-round, you’ve instantly set your home apart from most others in the neighborhood, which will probably be leafless and drab in the winter months. Ideas for year-round color, which are good for most areas of the country: flowering shrubs such as viburnums with their colored berries or trees with colored bark such as coral bark Japanese maples. Ornamental grasses, including fountain grass and maiden grass, are hardy through different seasons — as well as easy to maintain. And always remember to match the plants to the home. Pansies and petunias may be perfect for a cottage-style house, but not for one that’s sleek and contemporary.

Trees: Your most valuable asset is your trees. You buy a tree for $20 when you first put it in, and immediately it starts to rise in value, it’s one of the few things that appreciates over time. The Council of Tree and Landscape Appraisers says a mature tree can have an appraised value of $1,000 to $10,000.

Outdoor Spaces: Some buyers have had to settle for less space than they would’ve liked in today’s market. The solution to the problem: Extend your living space outdoors. Deck and patio additions are the natural way to extend one’s living space outside, and decks bring one of the highest cost recoupings of any home project (76%), according to Remodeling Magazine’s “Cost vs. Value Report.” (An indoor sunroom, by contrast, gets you only 60% of your dollars back.) Redwood or cedar is still a high-end choice, although more recycled plastics that look like wood are being used for long life.

Tips for the do it yourselfer: If you’re putting in significant hardscapes, make sure of a few things: Don’t damage the root systems of major trees in your yard, which could potentially cost you thousands of dollars.  Also, find out whether you might be about to dig into any utilities. Hit a gas line or TV cables and you could be liable for repair costs — if you don’t check with the local public service commission.

This Week’s Real Estate Insight:
The advantages of a professionally installed and maintained landscape go beyond “curb appeal” and head straight for the bottom line. A well-designed landscape has been proven to increase the sale price by over 10%. Maybe money does grow on trees!