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How To Teach Young Children To Budget?

If you are a parent, then it is very important for you to understand the importance of talking to your children about money early in their life in order to prevent them from making costly financial blunders in their adulthood. There are many instances where you have seen the young people after their graduation move to their parental home and mishandle the cash that they earn. More than 40% of the US graduated students still receive financial assistance from their parents and more than 32% of the young adults aged between 18 and 30 live with their parents. Teaching budgeting early will help children save money in adulthood.

In order to avoid falling into the financial burden at a young age, it is always better for you as a parent to teach your kids about money and the ways to save it at a very early age. Any parent not interested in supporting their children when they reach 28 to 30 years, must start to teach them about money when they are 3 to 4 years old.

Teaching the children about money and the ways it can be utilized will help them become a very good money manager at the college. They will know the importance of paying the bills easily and ensure that their paycheck lasts till they get a new one. They must be taught at the tender age that money is finite and hence needs to spend it carefully.

It is important for the child to experience budgeting lessons and experiences at a young age so that they understand that money is finite. They should be making sure that the child should have to live with the decisions that he or she makes and must not expect their mom or dad to come and bail them out very time. If you are looking at more Lessons In Personal Finance, then do not hesitate to Click On This Link.

As the child gets older, the pocket money that you give will also increase. It is important for the children and the parents to carry out meetings from time to time to discuss on how to allocate the pocket money to cover the child’s expenses.

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The following are some of the ways to teach your child on how to budget.

Persuade teens to find jobs

It is not a bad idea to encourage your teenage kids to find a part time job after school hours to get into the habit of earning. They can learn a lot by doing jobs and this will also give the drive to spend wisely, as it is their hard earned money.

Take them with you while shopping

Take your young children with you when you are going for shopping. Teach them about the ways to shop and make them understand the price differences between a branded product and the local one. Also, explain to them as to why you are buying a particular product. This way they will understand the right concept of shopping and how to save while shopping.

Never bail them out

If your son spends the pocket money you gave for a new pair of jeans, then do not bail him out by giving more money to buy the shirt. This will help them to learn how to live with the money they have.

Importance Of Value Investing

Value investing will soon become the most sought after investment. The global markets are still under the financial suppression that it faced since 2009. It is a wonderful time for growth investing with lower interest rates. The markets have given a reduced premium to all businesses that can grow in this environment. The price to earnings ratio and other traditional value factors has taken a big hit, even after these factors have offered with a decent premium returns in the long run.

The value investors have been the worst hit and they have been kept in the cold winter conditions for long. It has been left cold and dry since the late 90’s. The growth and the value cycles have been on a mean path for about seven to ten years on an average. The growth cycle is in its ninth year running and there is every chance for this cycle to come to a close pretty soon and we will see the value investments soon entering the market environment. There are many value investors waiting for their turn to shine again the market.

As soon as the shift from the growth values to value investments takes place in the marketplace, you will find the slowcoaches of yesterday to become leaders of tomorrow. There is no way one can predict when the cycle change will happen, but there are certain signs that indicate that this paradigm shift is ever so closer.

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If you are interested to know more about the Basic Investment Principles To Keep In Mind, then you will need to Visit This Link.

The following are some of the reasons why many market experts feel that the time for value investments is not far away.

Increased interest rates in the US

The value stocks have been performing better than expected in the recent past after a small rate hike. They have been growing in a pervasive manner and there are no signs of slowing down. It has to be noted that the current scenario has happened in December 2015.

High yield bond markets recovery

The high yield markets have shown very good recovery in the recent past and this is one indication that value investments will be a force to reckon with in the near future.  The value investments are inversely linked to the high yield spreads in the US. The high yield spreads are on a low currently because of the better credit situations in the US. This is a big signal that the worst scenario for the value investments is behind us and it is time to move forward.

Powerful commodity markets

The prices of the commodities are increasing and this is a good sign for value investments. As value outperformance is interlinked with the increasing commodity prices, there is every possibility for value investments to see the hay days once again.

Weakening of the US Dollar

The value of the US dollar is low in the international markets. The value indexes are slanted and dependent on the energy, industries and tech markets. This will provide the value investment companies with an opportunity to earn.

Opaque Ties And Debts In Trump’s Financial Affairs

Trump’s holdings

If you look at the financial state of affairs with respect to the Republican presidential nominee, Donald J Trump, there are debts in double figures and partnerships that are complex. Such data can be found from the Trump Tower located on the Fifth Avenue in the famed streets of Manhattan. The debts are double the amount he can make from his public campaigns. However, as Donald Trump projects himself in the presidential campaign, he is a businessman and he has earned billions of dollars who is not in debt to anyone.

Looking into the real estate holdings of Mr. Trump, however reveals that he owns companies that have a total of $650 million which lies in debt. This is twice the total amount that can be obtained from public filings when he has made a bid for obtaining the presidential position at the White House. Fortunes of Mr. Trump lie also on several financial backers some of whom he has criticized during his campaign. For instance, there is an office building that is on Avenue of Americas whose part owner is Mr. Trump. This building carries a loan of $950 million. One of the lenders is Bank of China against whom Trump has railed against and stated that the bank is an economic enemy of US as well as Goldman Sachs whom he has criticized as the main control point of Hilary Clinton, claiming that the bank has paid her about $675000 in terms of speaking fees. Go Here to check a related article about Hilary and Trump controversies – “Hillary Clinton Criticizes Donald Trump’s Economic Plan“.

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Real estate affairs

Real estate projects are another grey area in Trump’s financial. There are mortgage structures and ownership issues that are complex and convoluted. He has had a long career in real estate in US as well as in abroad. He claims to have personal wealth that exceeds $10 billion, but how much of that is free for his personal use is debatable. As a presidential candidate, if Trump is selected, his hold over the tax and monetary policy would be considerable. He would also be able to make appointments that will affect his financial empire as well. Legislative issues would be influenced by him considerably, which in turn will impact his net worth in total. He would be able to officially deal with countries with whom he has had business interests.

Disclosures incomplete

There is a large aspect of Mr. Trump’s business dealings that remain mysterious and non transparent. His tax returns and a valuation of his assets had not been allowed by him, which makes things still cloudier. At the time when the campaign started he had submitted a federal financial disclosure form that showed that his businesses owed a total of $315 million to lenders and ties were there with several limited liability companies, about 500. The forms are designed for candidates that have a simpler structure of finances and hence, it did not require him to disclose many of his business activities.

Banks To Reduce Branches

The trend of real estate, banking branches might take a while to go defunct. There had been theses that stated that e-banking would make brick and mortar branches defunct. However, that might be an overrated suggestion as per the current trends. This is as per FDIC’s chief economist who has pointed out that people still walk in even if e-banking initiatives and features have increased.

Banking behavior trends

Banks have increased the use of online tools, but as the trend goes, US customers have not given up on their regular visits to the nearest branches of their banks. The industry has been trying to slim down and reduce costs of operations, but this kind of trend is slowing down this initiative. Most banks have taken up the initiative to reduce the number of branches they operate. It has been reduced by an average of 6% since 2009 when the operations peaked. This is as per data accumulated by Federal Deposit Insurance Corp. Last year there were 93, 283 branches that open which is the lowest level achieved in a decade.

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Analysts however have examined the data that banks have provided and stated that banks need to do more to reduce the pressure that has built on revenue. With low interest rates and demands coming in from regulatory authorities more cost cutting initiatives need to be taken. The number has fallen for FDIC insured banks. The percentage is 25% more than how much industry assets have increased over the same period. There is more room for consolidating branches in the near future.

Bank executives, however are seeing a different picture emerge. They see that the branches are crucial when it comes to getting new customers as well as increasing business opportunities with new ones. As per them, if several branches are closed, it would hurt revenue more than helping to reduce costs of operation. Jonathan Velline, head of the store and ATM strategy in Wells Fargo states that, customers still want to walk in and do most of their transactions and that is going on at a consistent rate even today. This is a view that is shared by many other banks. Many feel that online banking definitely helps to complement traditional banking services, but going digital fully will not serve well as most customer interactions and queries need to be handled face to face.

What other countries are doing

If you look at the US banking scenario, it is in the midst of how developed nations are working towards slimming down operations. This is as per the data published by the International Monetary Fund. More branches have been cut in countries like Canada, France or Germany while other aggressive countries that have lost out branches are Italy, Ireland, Greece and Spain. Find a related Banking Article HereBanking Crisis To One Of The Oldest World Bank. There are other factors that need to be considered as well as there are certain banking behaviors that are unique to different countries. In case of US most customer issue checks and need them to be processed by the branches.

US Economy Is Close To Financial Targets

As per the inflation and job target of the Federal Reserve Board the US economy is close to the targets set. The Feds are hoping that the growth rate will pick up in the remaining months of this year. This was stated by Stanley Fischer, who is the vice chairman of the central bank. The comments were made for the Program on World Economy where Fischer commented that employment has gone up in an impressive manner since the low that the nation experienced from 2010. The unemployment rate has been about five percent for the last year. Find Here an article on What Are The Financial Perks Of Being A Young Person?

Take A Look at what the Feds are saying about the US economy state.

Inflation targets

The core inflation stands at 1.6%, which was for the price index of personal consumption. This expenditure stood at the above mentioned figure for the last 12 months. The rate is close to 2%, which is a target that is set. The Feds had a dual mandate for reaching an inflation rate of 2% and to get employment at sustainable levels along with that. For this kind of trend Fischer voiced optimism. He stated that the growth rates are coming close to targets that are a positive sign for the US economy. The Gross Domestic Product of US is also expected to grow well this financial year that will account the expenses that have gone into the services and finished goods of the economy. The growth in GDP is expected to pick up in the following quarter. Investment will recover from a weak patch with which the year started off this year. It is hopeful that the dollar appreciation will diminish as well.

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Rate hikes

Along with growth in inflation and employment the Feds are hopeful that they will be able to raise the interest rates. The Feds are hoping to raise the rates as the employment is increasing and growth has been modest. The funds rate has not changed till the level has been raised from the near zero to 0.5% which was the rate in December. The increase has been over a decade. The Feds feel that the economy has stayed resilient though there have been negative impact over the last two years.

Influence of other factors

There have been several negative factors that have hindered growth in the US in the last two years. For instance, the debt crisis that came about in Greece or the 20% appreciation that led to the dollar going down for trades. The other factors comprised of slowdown in the growth of China’s economy as well as turbulence that was found in the financial markets in the early part of this year. There were other events that have led to the uncertainties like United Kingdom deciding to leave and not be a part of the European Union. Even with these shocks in the world economy Fischer feels that the US economy has held on and employment had continued to rise.