1. Financial Management Resources For Students and Teachers Margaret VanGinkel Iowa State University Extension

2. We didn’t just have a perfect storm… …We had a perfect TORNADO!!!  Disaster  Economy  Job Changes  Unexpected income changes

3. The “Paradox of Thrift” (Economic Term) Keeping Up With the Smiths: The fallout from one family’s belt tightening The Smiths cut back on phone service… Many families in the Dallas area, Including the Smiths, above, had to cut back on spending, hurting local businesses. As AT&T lays off 12,000 workers The Smiths also stop eating out… As Applebee’s revenues fall… And its parent company, DineEquity lays off workers The Smiths stop shopping at Brighton Collectibles… Causing job worries for store manager Carol Rice… Who eats out less at BJ’s Brewhouse The Smiths stop getting lattes… As Starbucks closes 28 stores in the Dallas area

4. A “New Normal” Was Inevitable Previous economic trends were unsustainable –“–“Housing (real estate) bubble” (inflated prices) –“–“Credit bubble” (household overspending and reckless lending) –S–Securitization turned toxic (subprime mortgages) –R–Risky pools of derivative securities tied to mortgages (e.g., credit default swaps, credit default obligations) Increased post-crisis government oversight Reaction (over-reaction?) by financial services firms The over-leveraged, debt-driven era of severely under-priced risk is OVER!

5. Four Common Aftermaths of Financial Crisis Deep and prolonged asset market collapses – Housing prices – Stock Market indexes Profound declines in output (deleveraging) High employment (in both public and private sector) Explosion in government debt as tax revenues decline

6. Baby Boomers and Older Gen Xers Especially Affected By the Financial Crisis Fully experienced, not just one asset bubble – BUT TWO – during long stretches of their working lives – “Tech Bubble” and extraordinary run of double-digit stock market returns in the late 1990s – “Housing Bubble” during much of the 2000s Limited recovery time for battered investment Money Magazine (April 2009) “A generation of Americans grew into middle age thinking that they had more wealth than they really did and their future was a lot more secure than it really was.”

7. Five Stages: How people Receive “Bad News” (Elizabeth Kubler-Ross Model) “NORMAL” FUNCTIONING Stages of the Grief Cycle RETURN TO MEANINGFUL LIFE Shock and Denial Avoidance Confusion Fear Numbness Blame Anger Frustration Anxiety Irritation Embarrassment Shame Empowerment Security Self-esteem Meaning Acceptance Exploring options A new plan in place Depression and Detachment Overwhelmed Blahs Lack of energy Helplessness Dialogue and Bargaining Reaching out to others Desire to tell one’s story Struggle to find meaning for what has happened

8. Characteristics of the “New Normal” An extended period of: Slow U.S. economic growth Low single-digit average annual stock returns Stubbornly high unemployment levels Precarious job security (public and private sector) Tightened credit standards for loans Increased household savings and debt repayment Decreased household spending Increased globalization: The world will get even flatter Ultimately, when financial crisis abates, higher inflation (?)

9. Educators Can Help Students Prepare for the New Norm Goal-setting/Planning Employment/Income Spending Plans/Budgeting How/Why spend $ Credit Taxes Home ownership Saving/Investing Retirement planning Health Finance

10. Are You Ready for the New Norm? Resources ISU Extension –4–4H materials: Consumer Savvy, –h–https://www.extension.iastate.edu/store/ListItems.aspx?Categ oryID=14 –h–http://www.extension.org/ - eXtension: family/finances

11. ISU Extension Resources Local Extension Office Resource Management Program Specialists

12. Hotlines - http://www.extension.iastate.edu/hotlines.htm Teen Line- 800-443-8336 Iowa Concern – 800-477-1985 BETS OFF – 800- BETS OFF

13. Budget Basics Online 3- 1 hour session Interactive / or watch recorded sessions

14. Homebuyer Education Course This online course will help you * decide if now is a good time to buy a home, * prepare for the home buying process and * shop for a mortgage that works for you.

15. Topics include: financial basics insurance investing retirement planning planning for life events Money Talk

16. Small Steps to Health & Wealth Online / “Live” Identifies “small steps” that will improve one’s health and finances

17. 1 Communication & Goals 2 Income & Expenses 3 Develop a Spend Plan 4 Debt Repayment Strategies 5 Debt Repayment Plan 6 Build Financial Security 7 Invest for your Future Online / Independent Study Learning Coach Available Receive weekly money tips via e-mail

18. NEFE – High School Financial Planning

19. "Planning to $tay Ahead", a personal financial management class for individuals who have filed for bankruptcy.

20. W ORK P LACE E SSENTIALS © “soft skills” training

21. Other Resources www.njcfe.org – Information on finance www.njcfe.org www.moneytalks4teens.org – University of California www.moneytalks4teens.org http://www.nyse.com/ - New York Stock Exchange – Stock Market game http://www.nyse.com/ Rutgers – free CD with games, see handout http://www.cnpp.usda.gov/USDAFoodPlansCostofFood.htm -USDA Cost of Food Plans http://www.cnpp.usda.gov/USDAFoodPlansCostofFood.htm http://www.aces.edu/ - Money Management Calendars http://www.aces.edu/ http://fefe.arizona.edu/ - Curriculum lesson plans http://fefe.arizona.edu/ http://money.umd.edu/ - Personal finance seminar, usually in May http://money.umd.edu/ www.mymoney.gov – information, resources, tools, Money Smart www.mymoney.gov www.jumpstart.org – Coalition and clearinghouse/Money Smart week www.jumpstart.org www.NYSEMoneysense.com – New – online certification class for young adults www.NYSEMoneysense.com

22. New Economic Patterns Tight Credit Constrained Spending Low Investment Returns Frugality is “IN” Employment uncertain High Unemployment Decreased employee benefits Uncertainty (taxes? Inflation?)

23. Welcome to the “New Normal” In times of crisis and uncertainty, knowledge is POWER!

24. Are You Ready???

25. For more information, contact: Margaret VanGinkel Hotlines Coordinator 10861 Douglas Ave, Suite B Urbandale, Iowa 50322 515-727-0656 E-mail: vangin@iastate.edu