Finance expert shares money tips with students and parents
When Nathan Dungan talks about money on college campuses, the students are all ears.
The family finance guru, with 20-plus years of experience under his belt, is animated and quick to crack a joke. In fact, he even dresses like most of his young audience. On a visit to St. Catherine University in early October, he wore blue jeans and a black sweater — and had successfully engaged the parents in the crowd as well.
“I travel all over North America speaking about [money management], and St. Kate’s is on this like nobody else,” said Dungan, founder and president of Share Save Spend, a Minneapolis-based organization that promotes financial knowledge and self-discipline. “The University is very attuned to the fact that understanding and learning about money is a critical life skill.”
Dungan’s visit — his fourth since 2006 — is part of St. Kate’s money-management initiative, known as “Money Doesn’t Grow on Trees," which is sponsored by GE Money, ING Foundation and TG.
“In this economy, [money management] has gone from a nice thing to do to a must do,” he says. “We really need to be paying attention to this.” There is a direct correlation between a person’s financial literacy and her or his ability to get a job, he adds.
According to Dungan, building healthy money habits involves “taking control of things you can control” and learning how to talk about money.
People typically have a dominant characteristic around money. We’re either savers, sharers or spenders, Dungan suggests, and knowing your “money temperament” is important. Why? Because if having money makes you want to spend it, you can figure out a way or seek help to keep that natural tendency in check.
Not sure if you’re a saver, sharer or spender?
Ask yourself this: Which is easiest for you to do — save your money, share your good fortune or spend it like there’s no tomorrow? (Best to be brutally honest here.)
Next, ask your parents the same question. (Or, if you’re a parent reading this, ask your student.)
That’s right, don’t be afraid to discuss money with your family members. They — as well as the friends you hang out with — can influence the way you currently handle money. “Look at the generations before you,” Dungan says. “Find out what their habits were and how it trickled down to affect you.”
Dungan says 85 percent of parents actively teach their children how to save, but only 34 percent teach them how to pay bills and 27 percent show them how to use a checking account or credit card.
“A lot of bill paying happens online now, and a lot of conversations about money have gone offline,” says Dungan, who grew up learning the ins and outs of money from his parents and the stacks of bills he saw them dealing with each month.
Dungan says we tend to overspend when we
- pay with plastic (debit and credit cards; we spend 10 to 20 percent more when we use our cards instead of cash)
- listen to music (there’s a reason stores pipe in music!)
- buy in bulk
- hit the clearance racks
- shop without a list
If you can avoid doing all or any of the above, you have a better chance of staying within your budget. Dungan says identifying the coveted item as “a want” or “a need” can help curb spending.
“We’re told that wants are needs about 5,000 times a day,” he says of the number of ads we face with each day. In 2007, The New York Times reported that “a person living in a city 30 years ago saw up to 2,000 ad messages a day, compared with up to 5,000 today." Outright advertising is a contributing factor, as are an increase in spam e-mail messages, product placements in TV shows and movies, and Internet ads.
“Ads tell you that what you have isn’t enough,” Dungan says. “They chip away at your self esteem.”
One way to fight this, he says, is to know what your values are — those things that really matter to you. (And a conversation with your parents or your student, can help you better identify these.) Otherwise, says Dungan, “you're up against a consumer culture telling you to spend money you don't have.”
For more money tips from Nathan Dungan, watch his Oct. 2 "From Allowance to Financial Independence" podcast.